The Boston Globe today has a story about the attempt by Irving Picard to recover as much money as he can from Madoff investors who made huge sums of money to return to Madoff victims who lost money.
The story focuses on Carl Shapiro, the 97-year-old Boston businessman who made somewhere around $1 billion off his long term “investments” with Madoff. Shapiro, who gave much of those “earnings” away through his foundation, whcich was also a big Madoff winner, stands to lose a good portion of that $1 billion.
But the Globe also goes into detail about the fight between Picard, the trustee for the Madoff estate, and those who are trying to both hold onto and recover money.
On the one hand, reports the Globe:
At issue in the latest court ruling was a seemingly simple matter that has enraged many Madoff victims: The way officials determine how much money victims actually lost to Madoff.
US Bankruptcy Judge Burton R. Lifland sided with the trustee in the case, Irving Picard, who is charged with recovering as much money as possible for victims. Picard argued in a motion that investors can claim only the amount they first invested with Madoff, minus any funds they withdrew over the years.
A group of former Madoff clients, including Shapiro, argued to the judge that this method is unfair; that they instead should be able to claim as losses the amounts on their last account statements – balances that Madoff made up.
Shapiro, a Madoff friend and client for more than 40 years, has acknowledged that he and his family have withdrawn more from their Madoff accounts than they deposited. The ruling further bolsters Picard’s efforts to get that money back, to be distributed to other victims.
Picard is arguing as well that those like the now deceased Jeffry Picower should have known better when they were receiving returns of up to 950 percent on their investments.
On the other hand, those who lost their investments with Madoff are getting restless as to when they might see some of ther money returned.
Says the Globe:
The issue of valuing accounts has become a bloody battle. Some angry victims, fighting for the $500,000 maximum claim available from the Securities Investor Protection Corp., have alleged that Picard and SIPC are treating them unfairly, and acting too slowly.
A group called the Madoff Coalition for Investor Protection issued a statement criticizing SIPC and called on Congress to step into the fight.
At the end of 2008, Madoff customers believed they had a combined $65 billion in their accounts. As of last month, Picard’s office had received 12,047 claims; so far, 1,936 have been allowed, and $650 million committed to victims.
Hat Tip Chronicle of Philanthropy.