Madoff Investor Group Wants to Have Releases VoidedJun 25, 2009 | Parker Waichman LLP
A group of Bernard Madoff's victims who waived some of their rights in order to receive accelerated payments from the trustee liquidating his assets are having second thoughts. According to Bloomberg.com, they are asking a federal bankruptcy judge to invalidate the releases they signed so that they can seek more money if it is found that the trustee miscalculated their claims.
According to Bloomberg.com, this is the same group of Madoff victims who sued the trustee earlier this month in an attempt to force him to recalculate reimbursements. As we reported previously, trustee Irving Picard is currently calculating an investor’s loss as the difference between the total amount a customer paid into the scam and the total amount withdrawn before it collapsed. This group has argued that investors should receive credit for the full value of the securities shown on the last account statements they received before Madoff’s arrest. If they win, the amount due to each defrauded Madoff investor will substantially increase.
But a recalculation won't help Madoff's investors who sought accelerated payments, most of whom did so because they were in dire financial circumstances, Bloomberg.com said. In order to qualify for those accelerated payments, they had to sign releases barring them from seeking more money if Picard recalculated losses. They are asking that the released they signed be voided.
Madoff pleaded guilty to 11 criminal charges last March, including securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission. At the time of his plea, Madoff publicly admitted he had run a Ponzi scheme.
Madoff is being detained at the Manhattan Correctional Center in New York City, where he is awaiting sentencing scheduled for later this month. He faces as much as 150 years in prison. However, it was recently learned that Madoff’s defense attorney has written the judge scheduled for the sentencing, urging a 12-year-sentence. According to the Associated Press, attorney Ira Sorkin wrote that such a sentence - which many of Madoff’s defrauded clients would likely consider too lenient - would acknowledge Madoff’s voluntary surrender late last year.