The U.S. Supreme Court asked the Trump administration for advice on an effort by the liquidator of Bernard Madoff’s firm to recoup $3 billion that was transferred overseas.
The justices are considering whether to hear an appeal by investors who say trustee Irving Picard is impermissibly trying to apply U.S. bankruptcy law to foreign transactions. A federal appeals court let Picard sue the investors.
The case affects foreign customers of Fairfield Greenwich Group and other offshore feeder funds that channeled investors’ money to Bernard L. Madoff Investment Securities LLC. The investors include Koch Industries, whose chairman and chief executive officer, Charles Koch, is a major Republican patron.
The investors allegedly withdrew more money than they put in before Madoff’s Ponzi scheme collapsed in 2008.
Picard told the Supreme Court he’s seeking $3 billion after reaching an $860 million settlement earlier this year with a pair of offshore funds, Kingate Global Fund Ltd. and Kingate Euro Fund Ltd.
The money is the biggest remaining pot of cash being sought by Picard as he tries to compensate customers who lost $19 billion in principal after Madoff’s arrest. So far Picard has recovered more than $14 billion and distributed more than $12 billion to victims -- significantly more than many predicted a decade ago.
The Supreme Court directed its request to U.S. Solicitor General Noel Francisco, the Trump administration’s top courtroom lawyer.
Madoff, 81, is serving a 150-year sentence in a federal prison in North Carolina.
The case is HSBC v. Picard, 19-277.
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