Defendants in more than 400 lawsuits related to the collapse of Bernard L. Madoff’s Ponzi scheme have sought to move their cases from bankruptcy court to district court, most asking U.S. District Judge Jed Rakoff to assess demands for return of money by the Madoff trustee.
Madoff trustee Irving Picard has filed more than 1,050 lawsuits to try to recoup money he alleges was stolen from the con man’s other customers, according to a bankruptcy court filing in Manhattan yesterday. Rakoff’s handling of Picard’s $1 billion lawsuit against the New York Mets owners, which the judge cut to $386 million, spurred defendants in more than 30 other cases to ask Rakoff to assess their liabilities too, court documents show.
The number of suits awaiting attention from Rakoff and other district judges were published as part of a notice to defendants that Rakoff had set an April 2 deadline for requests to take more Madoff suits. Mets owners Fred Wilpon and Saul Katz are due to go to trial on March 19 in Rakoff’s Manhattan court.
Bank defendants in Picard’s bankruptcy court suits, including JPMorgan Chase & Co., have asked district judges to decide whether Picard, a New York lawyer, has the right to sue them, and for how much. They say that Picard is straining the limits of the law as he tries to grab back money for victims of Madoff’s fraud. Some of them have won initial victories.
The Madoff trustee currently is appealing district court decisions that knocked out about $30 billion of his claims against banks. Rakoff has also disallowed most of a $59 billion suit that was based on racketeering law.
The Mets case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at email@example.com.