March 26 (Bloomberg) -- The liquidators of M-Invest Ltd., a so-called feeder fund for Bernard Madoff’s bankrupt investment firm, dropped a lawsuit accusing Ernst & Young LLP of negligence, malpractice and breach of contract.
The liquidators said in documents filed in New York State Supreme Court in December that they were suing the New York-based accounting firm over audits of M-Invest’s annual financial statements from 2003 to 2007 and seeking $900 million in damages. Ernst & Young said the suit was without merit.
The plaintiffs discontinued the action, according to a court document filed March 23. No reason was given. Scott M. Berman, an attorney for the liquidators, and Charlie Perkins, a spokesman for Ernst & Young, declined to comment on the filing in a telephone interview.
Union Bancaire Privee, a private Swiss bank that set up M-Invest, a Cayman Islands corporation, to invest money with Madoff, agreed to pay as much as $500 million in December 2010 to settle claims by Irving Picard, the trustee liquidating Madoff’s firm.
The agreement ended claims against Union Bancaire, which was accused of accused of profiting from Madoff’s Ponzi scheme. Union Bancaire and M-Invest didn’t admit any liability, according to the agreement.
Madoff, 73, is serving a 150-year sentence in a federal prison in North Carolina after admitting to directing the biggest Ponzi scheme in history. The Securities Investor Protection Corp. has said that investors in so-called feeder funds aren’t customers of Madoff’s firm and can’t make claims on the estate of the bankrupt brokerage.
The case is M-Invest Ltd. v. Ernst & Young LLP, 653353/2011, New York State Supreme Court (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York at email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org