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Madoff victims' trustee reaches $1-billion settlement with liquidators of three 'feeder funds'

May 09, 2011|Reuters

New York — The trustee seeking money on behalf of Bernard Madoff's victims announced on Monday a $1-billion settlement with liquidators for three large "feeder funds," boosting payouts to the swindler's former customers.

Irving Picard said the agreement reduces the claims that the Fairfield funds, which had been affiliated with Fairfield Greenwich Group, have against a fund he administers for former Madoff customers. The claims will be reduced to about $230 million from $1.2 billion, he said.

Picard said the liquidators also agreed to pay $70 million to the customer fund and to stop pursuing their own claims against Fairfield's owners and management. The trustee is seeking money for former customers of Bernard L. Madoff Investment Securities.

"The trustee is confident that combining forces with the joint liquidators enables the potential recovery of billions in additional dollars for the ultimate benefit of" Madoff victims, Picard's lawyer, David Sheehan, said in a statement.

Last week, Picard asked U.S. Bankruptcy Judge Burton Lifland for permission to put $2.6 billion of recovered money into the customer fund and pay an initial $272 million to former Madoff customers whose claims he approved.

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