Irving Picard, the court-appointed receiver in the Bernard Madoff case, is under legal siege north and south. A British Virgin Islands court dealt a potentially major blow to Picard's efforts to recover assets. In a preliminary ruling, the court ruled that the liquidators of Fairfield Greenwich Group's Fairfield Sentry fund, the largest Madoff feeder fund, could not proceed with clawback lawsuits against investors who withdrew more than they invested. "It is not open to Sentry to now seek to recover the price it paid for the shares of redeeming investors simply because it calculated [their worth] upon information that has subsequently proved unreliable for reasons unconnected with any of the redeemers," the judge wrote. The Fairfield Sentry liquidators are working with Picard following a settlement with him earlier this year. The BVI ruling, which is likely to be appealed, will not affect those settlements, the Financial Times reports. Nor does the ruling affect the liquidators' clawback lawsuits filed in New York. But there is a challenge to Picard's efforts in that city, as well. JPMorgan Chase, Madoff's primary banker during his decades of Ponzi scheming, has asked a judge to dismiss Picard's $19 billion lawsuit against it, calling his argument "clearly wrong." In a filing last week, JPMorgan said it was "settled law" that a bankruptcy trustee cannot make claims on behalf of creditors, and that his "argument is so clearly wrong that the trustee did not even make it to" U.S. District Judge Jed Rakoff, who is overseeing Picard's lawsuit against HSBC Holdings. Rakoff in July ruled that Picard can't sue that bank on behalf of Madoff clients by alleging that HSBC failed to detect the fraud. "There is a massive gap between the trustee's blustering accusations and the facts that he has actually alleged to support them," JPMorgan wrote. "The trustee's damages claims demand the absurd inference that JPMorgan deliberately joined with Bernard Madoff in a doomed-to-fail Ponzi scheme so that it could earn conventional banking fees." Picard's spokeswoman responded that "the trustee and his counsel remain confident in our position." http://www.finalternatives.com/node/18117
Good! Picard's actions are like a reverse Ponzi to pay lawyers,etc, way beyond losses and make a name for himself. He's got a bit of larceny in himself, too!