Bankruptcy trustee expects to OK Madoff claims

The trustee in the Bernard Madoff bankruptcy case said he expects to approve $100 million in claims by Memorial Day for victims of the investment scheme, and continues to pursue nearly $11 billion in additional funds from some Madoff customers to redistribute to others who lost money.

Irving H. Picard, the trustee charged with recouping assets on behalf of Madoff victims, said in a conference call with reporters that he has received 8,848 customer claims to date. His office has so far identified $1 billion in assets that can be returned to victims and has filed six lawsuits seeking to recover $10.1 billion. The trustee this week sued philanthropist Jeffry M. Picower and hedge fund Harley International Ltd. for the return of more than $7 billion.

“At least $5 billion of this amount was fictitious profit from the Ponzi scheme,” according to the complaint. Out of $12 billion customers withdrew from Madoff's firm last year, about half was taken out in the 90 days before his arrest and the firm's bankruptcy. Picard is pursuing those funds, for return to other clients.

Picard said his office is involved in negotiations with a number of people and entities, from which he expects "significant settlements" in the coming weeks. Picard said he is in talks with some people who have not yet received a so-called clawback letter requesting a return of funds.

About 233 clawback letters were sent out several weeks ago, demanding the return of funds. Most of the letters, Picard said, went to Madoff family members and employees of the firm and their relatives. Another group of letter went to "feeder" funds - hedge funds that packaged large sums of money from investors and sent them to Madoff to invest. One of those was Tremont Group Holdings Inc., a Rye, N.Y., hedge fund group owned by Springfield insurer Massachusetts Mutual Life Insurance Co. Tremont lost $3.3 billion to Madoff.
(By Beth Healy, Globe staff)