District Court Ruling Could Significantly Limit Madoff Trustee's

On September 27, 2011, U.S. District Judge Jed S. Rakoff issued an important ruling in the action commenced by Irving Picard ("Trustee"), trustee for Bernard L. Madoff Securities LLC ("Madoff"), against a group of individuals and investment entities affiliated with the New York Mets (collectively, "Defendants"). Picard v. Katz, No. 11 Civ. 3605 (S.D.N.Y. Sept. 27, 2011).

Judge Rakoff dismissed nine of the 11 counts against Defendants, leaving only the Trustee's claim to void actual fraudulent transfers as a possible avenue of recovery against the Defendants.¹ The ruling limits the Trustee's possible recovery to those transfers that occurred within two years before the Madoff bankruptcy rather than the six-year reach-back allowed under New York state law and, if upheld on appeal, would extinguish billions of dollars of claims held by the estate.²