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Judge allows approval for Madoff's bankruptcy
By Tom Hays |
April 13, 2009, Monday
|
Print Edition
Print Edition
A JUDGE has given investors a green light to go after Bernard Madoff's personal property by forcing the disgraced financier into bankruptcy.
In a ruling in federal court on Friday, United States District Judge Louis L. Stanton lifted a temporary order barring involuntary bankruptcy for Madoff while the government continues its pursuit of his ill-gotten gains.
Victims of the massive fraud would benefit from a bankruptcy court's "orderly and equitable administration of his individual estate," the judge wrote.
Madoff, 70, pleaded guilty last month to federal charges that he cheated investors of billions of dollars over several decades with a gigantic pyramid scheme that paid longtime investors with money from new investors. He is jailed, awaiting a June sentencing for charges that carry a sentence of up to 150 years in prison.
The ruling on Friday came after a small group of investors had requested the court's permission more than a week ago to directly pursue Madoff's personal assets in bankruptcy court. ''Their lawyers argued that without it, those assets might land in the US Treasury rather than their pockets.''
In court papers filed earlier last week, authorities sought to assure the judge that any proceeds recovered in the case would go to the victims.
The Securities and Exchange Commission argued bankruptcy would create unnecessary confusion and cause costly and potentially wasteful litigation. Prosecutors also weighed in, claiming such a proceeding might delay recovery of funds.
The judge found that personal bankruptcy would be the best and only avenue to allow victims to go after "assets which are not the proceeds of his crime or forfeitable ... property."
In a ruling in federal court on Friday, United States District Judge Louis L. Stanton lifted a temporary order barring involuntary bankruptcy for Madoff while the government continues its pursuit of his ill-gotten gains.
Victims of the massive fraud would benefit from a bankruptcy court's "orderly and equitable administration of his individual estate," the judge wrote.
Madoff, 70, pleaded guilty last month to federal charges that he cheated investors of billions of dollars over several decades with a gigantic pyramid scheme that paid longtime investors with money from new investors. He is jailed, awaiting a June sentencing for charges that carry a sentence of up to 150 years in prison.
The ruling on Friday came after a small group of investors had requested the court's permission more than a week ago to directly pursue Madoff's personal assets in bankruptcy court. ''Their lawyers argued that without it, those assets might land in the US Treasury rather than their pockets.''
In court papers filed earlier last week, authorities sought to assure the judge that any proceeds recovered in the case would go to the victims.
The Securities and Exchange Commission argued bankruptcy would create unnecessary confusion and cause costly and potentially wasteful litigation. Prosecutors also weighed in, claiming such a proceeding might delay recovery of funds.
The judge found that personal bankruptcy would be the best and only avenue to allow victims to go after "assets which are not the proceeds of his crime or forfeitable ... property."
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