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Madoff investors challenge deadline

February 11, 2009
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NEW YORK - Some investors who withdrew money from alleged swindler Bernard L. Madoff's Investment Securities before it failed are trying to protect themselves in case they are forced to return the funds.

They are asking that they be exempt from a July deadline a court-appointed trustee has set for investors who wish to claim losses in Madoff's scheme.

In a filing yesterday in US Bankruptcy Court in Manhattan, the Lucerne Foundation, Collingwood Enterprises, and Douglas Rimsky asked that the deadline be pushed back.

While those investors don't have claims now, they could be entitled to a claim should trustee Irving Picard sue them. Picard can seek a clawback if he believes there was a preferential payment or fraudulent transfer.

Madoff, who was charged with securities fraud in December, yesterday partially settled a suit by the US Securities and Exchange Commission. He said he wouldn't challenge the SEC allegations when the judge in that case determines the penalty.

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