Wednesday, July 20, 2011

Madoff Trustee Ditches Some Claims Against UBS

The liquidator of Bernard L. Madoff’s firm dropped non-bankruptcy claims against UBS in a $2.6 billion lawsuit and intends to demand only money taken out of the Ponzi scheme before the confidence man’s 2008 arrest according to those fine folks at Bloomberg.

U.S. District Judge Colleen McMahon in Manhattan, who is reviewing the case, noted trustee Irving Picard’s “amendment of rights” in a letter to both sides’ lawyers filed yesterday in court. She asked them to clarify by July 22 what claims remain and what funds Picard is trying to recoup relying solely on “garden variety bankruptcy” principles.

Picard’s recovery for investors will shrink if he drops non-bankruptcy claims for damages in other cases. A $1 billion suit against the New York Mets’ owners uses common-law claims to demand the return of $700 million in principal. His lawsuit against JPMorgan Chase & Co. (JPM) asks for $19 billion in damages, equal to all money lost in the fraud…..

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