Another offshore fund that pumped investor cash into Bernard Madoff’s record Ponzi scheme settled a lawsuit over the case, agreeing to put up $140 million to help repay his victims.
The accord with Plaza Investments International Ltd. will boost total recoveries to more than $10.8 billion, the trustee unwinding Madoff’s scheme said Friday in a statement.
The trustee, Irving Picard, has sued dozens of offshore investment funds, claiming they ignored red flags in exchange for Madoff’s high returns. Picard is permitted under U.S. law to sue for return of the funds’ withdrawals.
The settlement with Plaza, based in the British Virgin Islands, and its investment manager, Notz Stucki Management (Bermuda) Ltd., will go up for approval in U.S. Bankruptcy Court in Manhattan July 29.
Picard, of Baker & Hostetler LLP in New York, reached similar deals this month with Ariel Fund Ltd. and Gabriel Capital LP, which also funneled money to Madoff.
The trustee has distributed more than $7.6 billion to victims since Madoff’s New York-based investment advisory firm collapsed in December 2008. The fraud erased $17.5 billion in principal, including billions of dollars invested indirectly through so-called feeder funds.
Much of the cash was raised through lawsuits Picard filed against former customers who profited from Madoff’s fraud by withdrawing more from their accounts than they put in.
Madoff pleaded guilty and is serving a 150-year prison sentence.
The case is Picard v. Plaza Investments International Ltd., 10-04284, U.S. Bankruptcy Court, Southern District of New York (Manhattan).