AU.S. Appeals Court has provided renewed hope for the Trustee
tasked with recovering billions of dollars for victims of Bernie
Madoff’s massive Ponzi Scheme, ruling that a district court
applied an incorrect (and more difficult) standard in preventing
the Trustee from recovering subsequent recipients of transfers from
the now-defunct investment company. In Picard v. Citibank
 20-01333, Second U.S. Circuit Court of Appeals
(Manhattan), published on August 30, 2021, the Second Circuit
revived two lawsuits filed by Trustee Irving
Picard1 against various recipients of allegedly
fraudulent transfers from Madoff’s firm after concluding that
the district court erred in applying a stricter pleading standard.
The decision promises to have sweeping ramifications going forward
and further increases the possibility that Madoff’s victims
could recover 100% of their losses through the Trustee’s

Following Madoff’s arrest, the Securities Investor
Protection Corporation moved under its authority pursuant to the
Securities Investor Protection Act (SIPA) to appoint Picard as a
trustee to liquidate Madoff’s investment firm. Since his
appointment, Picard has filed hundreds of “recovery
actions” against dozens of defendants, who are
“subsequent transferee” defendants under Section 550 of
the Bankruptcy Code. The Picard decision is critical, resulting in
over seven dozen such cases, totaling many billions of dollars that
previously would have been…

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