A federal judge gave a huge blow to the ongoing worldwide hunt for billions of dollars that Bernard Madoff took from its investors, saying payments to specific individuals outside the United States can’t be recovered.
Jed S. Rakoff, a judge overseeing the case, in the U.S. District Court of Manhattan recently ruled that the U.S. Bankruptcy Code won’t give allow Irving Picard, a trustee from Madoff’s firm, to order the money back on foreign entities received from Madoff.
The court ruling is a win for those who didn’t make direct investment with Madoff but utilized feeder funds, which gathered cash form investors and then given to Madoff. Madoff made a payout in which was later disclosed to be fake returns to feeder funds. The money was then distributed to individual investors.
Picard not only made use of the feeder funds to retract the money they directly received from Madoff, but he also filed a suit against investors of the feeder funds. It’s the latter group that led to Rakoff’s court ruling.
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