The liquidator of Bernard Madoff's firm, Irving Picard, reached a settlement with more than a dozen funds associated with hedge-fund firm Tremont Group Holdings Inc. by accepting a cash payment of more than $1 billion.
The liquidator of Bernard Madoff’s firm, Irving Picard, reached a settlement with more than a dozen funds associated with hedge-fund firm Tremont Group Holdings Inc. by accepting a cash payment of more than $1 billion.
Among the parties settling were Oppenheimer Acquisition Corp., an affiliate of the Oppenheimer mutual funds that bought Tremont, and Oppenheimer’s parents, MassMutual Holding LLC and Massachusetts Mutual Life Insurance Co., the trustee said in a statement today. As part of the deal, the Tremont funds will be allowed to make claims on the Madoff estate of about $3 billion.
Picard sued Tremont and related entities for $2.1 billion, saying they ignored warnings that Madoff could be running a Ponzi scheme and profited from it, according to a complaint unsealed in March. The payment from Tremont, the second-biggest so-called feeder into Madoff’s multibillion-dollar fraud, will add to the $2.6 billion in the fund for Madoff customers, Picard said today.
While the trustee believes he would prevail at trial, “he also recognizes the benefits of avoiding protracted litigation,” said Marc Powers, a lawyer for Picard.
The $3 billion in claims on the Madoff estate allowed to Tremont will give its investors “the potential to recover a substantial portion of their losses incurred as a result of Madoff’s fraud,” said Montieth Illingworth, a spokesman for the hedge fund firm, in an e-mailed statement.
Fairfield Deals
The settlement follows two deals in May with funds related to the Fairfield Greenwich Group, the biggest feeder fund in Madoff’s Ponzi scheme. In those agreements, Picard dropped efforts to collect about $4 billion in transfers, and the funds in return reduced their claims on the bankrupt Madoff estate.
Picard’s biggest settlement was his $5 billion share of a deal with the estate of Jeffry Picower, among the larger individual investors with Madoff. Counting that money, which is tied up in a court challenge, he said in the statement he has raised more than $8.6 billion, or almost half of the $17.3 billion in principal lost by Madoff customers who filed claims.
--Bloomberg News--