- Last Updated: 12:22 AM, June 26, 2012
- Posted: 11:56 PM, June 25, 2012
Talk about a summer bonus!
Bernie Madoff’s investors could finally see fat checks after the US Supreme Court yesterday greenlighted the bankruptcy trustee’s plan for calculating payouts to victims of the huge Ponzi scheme.
The court declined to hear an appeal by lawyers opposing Madoff trustee Irving Picard’s method for determining victims’ losses — a decision that frees up as much as $2.3 billion for burned investors, based on The Post’s calculations.
Picard said that only investors who withdrew less than they invested with Madoff should be entitled to a slice of the recovery pot. He went after so-called net winners who he said took out more than they put into the scheme.
But some investors argued that his loss formula should be based on their final account statements from Madoff — even if those turned out to be bogus.
By declining to review the case, the high court sided with Picard and the lower-court decisions that have upheld his method.
Picard claimed victory yesterday and promised to follow up with another round of distributions. But he stopped short of giving any details about how much might be available in the next round.
According the trustee’s website, $6.5 billion of the total $9.1 billion recovered so far is “unavailable” due to appeals and reserves. Subtract the $344 million that Picard distributed in the first round, and that leaves $2.3 billion.
Assuming the same 1,230 accounts that received checks in the last go-round, the average payout is in the ballpark of $1.8 million.
A spokeswoman for Picard declined to comment on the funds available for distribution or the number of accounts that could be eligible.
What’s more, Picard said $5 billion from a settlement with Madoff’s deceased pal Jeffry Picower could be freed up by a July 16 deadline, if there are no additional objections to that settlement. That would swell the average check to $5.9 million.
According to the trustee’s website, Picard has approved 2,434 claims, which would cut the amount of the average distributions in half.
Picard has doled out just $344 million since he was appointed the trustee in 2009, while his law firm has reaped $554 million in fees over the same period. That has led to skepticism among some Madoff victims.
“It’s certainly in his [Picard’s] interest to drag this out for as long as he can milk it and make money,” said a 68-year-old Great Neck resident, who lost $5.6 million to Madoff and asked to remain unnamed. “I think all the victims would like to have a clearer handle as to when these distributions will be made.”