It's been a tough few months for Irving Picard , the trustee who has been trying to recover funds for victims of Bernie Madoff's $65 billion ponzi scheme. To date, Picard has recovered more than $10 billion for victims - but he has now hit a serious roadblock in his search for more funds: Judge Rakoff.
Federal Judge Rakoff has thrown out the majority of claims by Picard who sought to recover around $1 billion from the owners of the New York Mets baseball team.
Among its most significant provisions, Judge Rakoff's ruling shortened the period during which Picard can attempt to recover investors' withdrawal of money from six years prior to the bankruptcy of Mr. Madoff's firm-- to a two-year window.
The Wall Street Journal notes that it is the biggest legal blow for Picard in the three years since he started trying to recover funds for Madoff's victims, as it will significantly reduce the amount of money Picard can recover and individual investors will eventually receive - both in the Mets case and potentially in other cases filed by Picard too.
Judge Rakoff is fast turning into a nemesis for Irving Picard: in the past few months, district judges - namely Judge Rakoff - have accepted demands by people Picard is suing, to move their cases out of bankruptcy court, which is a friendlier environment for the Madoff trustee, the WSJ notes.
From the Wall Street Journal:
"In recent months, judges had begun to express skepticism about the broad and aggressive claims filed by Mr. Picard. The trustee has sued individuals and institutions for nearly $100 billion, including fees and damages, in hopes of recovering as much as possible. He is likely to have a harder time reaching the types of settlements, on favorable terms, that fueled his initial success, including the $7.2 billion settlement reached with the estate of Jeffry Picower, a Madoff associate, in December, lawyers say."
It is somewhat difficult to disagree with a comment posted by one Wall Street Journal reader:
"A disgusting ruling - which preserves ill gotten gains. This will only teach people that they can get away with a Ponzi scheme if it's structured right - get all your profits out and pay your cronies/family before the two year window."