The liquidator of Bernard Madoff’s firm appealed a court ruling that tossed most of his $59 billion in claims against UniCredit SpA (UCG), Sonja Kohn and other defendants, following earlier appeals seeking to recover about $30 billion in damages from banks.
Madoff trustee Irving Picard’s notice of appeal and document record were transmitted today to U.S. District Court in Manhattan by a U.S. appeals court, according to filings. U.S. District Judge Jed Rakoff on Feb. 21 dismissed Picard’s claims under the racketeering statute, which allows for triple damages, saying he couldn’t prove his allegations.
Picard now has $90 billion in claims before the appeals court, out of about $100 billion he had demanded in more than 1,000 suits to gather money for customers with Madoff Ponzi scheme losses. Rakoff and another district judge, Colleen McMahon, dismissed the $90 billion in claims in Picard’s suits against banks including JPMorgan Chase & Co., HSBC Holdings Plc, UBS AG and UniCredit, which is a defendant in the HSBC case as well as the Kohn suit.
In his written opinion on the UniCredit racketeering case, Rakoff said Picard made a “casual assertion” that the defendants “fed, perpetuated and profited from” Madoff’s Ponzi scheme, and failed to show a direct relationship between the alleged criminal acts and resulting injuries to the con man’s customers.
Rakoff also dismissed common-law claims including unjust enrichment and conversion. He directed that the remaining claims be returned to bankruptcy court.
Marco Schnabl, a lawyer for UniCredit, declined to comment on the appeal. Picard said in his filing that he won’t appeal if Rakoff’s ruling in the racketeering case isn’t final yet.
UniCredit, based in Milan, and other defendants are trying to move the diminished Kohn and HSBC cases back to district court again, saying that Rakoff’s rulings in the Mets owners’ case raise new issues about how much profit and principal the trustee can claw back and what he is required to prove.
Madoff, 73, is serving a 150-year sentence in a federal prison in North Carolina for running a Ponzi scheme that defrauded investors of an estimated $20 billion in principal. Picard and his law firm, Baker & Hostetler LLP, have charged about $273 million for their work on the Madoff estate so far.
The case is Picard v. Kohn, 11-CV-1181, U.S. District Court, Southern District of New York (Manhattan).