New York Securities Lawyer Blog
On November 5, 2012, Irving H. Picard (“Trustee”), the Trustee for the liquidation proceeding of Bernard L. Madoff Investment Securities LLC (“BLMIS”), filed an Eighth Interim Report (“Eighth Interim Report”) pursuant to Securities and Investor Protection Act and the Claims Procedures Order rendered by Judge Burton R. Lifland in the United States Bankruptcy Court for the Southern District of New York on December 23, 2008. The Eighth Interim Report apprised the Court of any and all updates to the various aspects of the overall bankruptcy of BLMIS, including, but not limited to the payments of Securities Investor Protection Corporation (“SIPC”) customer claims, as well as an update regarding the clawback adversary proceedings. See Eighth Interim Report here. Pursuant to the Eighth Interim Report, as of September 30, 2012, the cost of liquidating the BLMIS bankruptcy proceeding has climbed to nearly $682 million. The Trustee stated that of the $3.7 billion lost as result of Madoff’s Ponzi scheme, the Trustee has recovered $9.2 billion, which is over fifty percent (50%) of the currently estimated principal lost in the Ponzi scheme by BLMIS customers who filed customer claim forms with SIPC. SIPC has also paid out an additional $1.4 billion. Recently, the Trustee made a second interim distribution to BLMIS customer by distributing approximately $2.5 billion. One section of the interim report described the Trustee’s Ninth Application for Allowance of Interim Compensation for Services Rendered and Reimbursement of Actual and Necessary Expenses Incurred from October 1, 2011 through January 31, 2012. During that time period, Baker & Hostetler incurred legal fees in the amount of $48,107,863.80 and the Trustee was personally compensated in the amount of $536,583.00. Moreover, Baker & Hostetler sought reimbursement for expenses incurred in the amount of $6,149,828.34. Judge Lifland granted this Interim Fee Application on August 30, 2012. According to the Eighth Interim Report, from December 2008 through September 30, 2012, Baker & Hostetler LLP, including the Trustee, has incurred legal fees in the amount of $352,541,178.94 and expenses in the amount of $8,055,060.11. As of September 30, 2012, the cost of liquidating the BLMIS bankruptcy proceeding has climbed to nearly $682 million. Many victims and others believe that the immensely high legal fees and expenses incurred by the Trustee’s counsel present a blatant conflict of interest, and should raise the question of whether the Trustee’s efforts are truly in the best interest of the BLMIS estate, or whether his efforts are meant to prolong the process in an attempt to line his own pockets while potentially violating the due process rights of the Madoff victims. Lax & Neville LLP effectively assists investors, on both a regional and national level, that may have suffered losses as a result of their broker dealer’s breaches of fiduciary duties and/or disregard for their investment interests, including losses suffered in Ponzi Schemes. Please contact our team of securities fraud attorneys for a consultation at (212) 696-1999.