Nov. 7 (Bloomberg) -- Fairfield Greenwich Group, the biggest operator of “feeder funds” that channeled money into Bernard Madoff’s Ponzi scheme, agreed to a settlement that may pay defrauded investors as much as $80.3 million.
The deal, to be funded by Fairfield Greenwich founder Walter Noel and other individuals associated with the firm, resolves claims by a class of investors who lost money to Madoff’s fraud, according to documents filed yesterday in federal court in Manhattan. Fairfield Greenwich placed about $7 billion with Madoff’s firm, Bernard L. Madoff Investment Securities LLC.
The settlement, which needs a judge’s approval before taking effect, provides $50.3 million to the class, which will get an additional $30 million if that money isn’t used to resolve other legal claims. A provision in the agreement allows Fairfield Greenwich to cancel the settlement if too many investors opt out of the deal to pursue individual claims.
Last year, a bankruptcy judge approved a $212 million settlement between the trustee liquidating Madoff’s defunct firm and Greenwich Sentry LP and Greenwich Sentry Partners LP, two bankrupt funds related to Fairfield Greenwich.
“This is an excellent result for the defrauded investors in the largest group of Madoff ‘feeder funds,’” David Barrett, a lawyer at Boies, Schiller & Flexner LLP and co-lead counsel to the investor class, said in an e-mailed statement. The investors continue to pursue claims in the case against Citco Group Ltd. and PricewaterhouseCoopers LLP, according to Barrett.
The case is Anwar v. Fairfield Greenwich Group Ltd., 09-cv-118, U.S. District Court, Southern District of New York (Manhattan).
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