Picard Cannot Make It So: Madoff Trustee’s Recoveries Curtailed Again

In a client advisory sent by our office a few months ago, we described a decision in the Madoff saga in which the District Court for the Southern District of New York (the Court) closed off a potential avenue of significant recovery for the Madoff Trustee (the Trustee) and the Ponzi scheme victims by denying the Trustee standing to pursue certain claims against feeder funds – firms that sent investors' funds to Madoff and that failed to detect the fraud. Now, not only has another judge reinforced that decision (see Picard v. JP Morgan Chase and UBS AG, et al., Decision and Order Granting Defendants' Motion to Dismiss Certain Common Law Claims, No. 11-civ-913, Docket #70 (S.D.N.Y. Oct. 31, 2011)) by holding that the Trustee does not have standing to sue the big bank defendants for amounts in excess of $20 billion, but in another decision, the Court has once again curtailed the possible recovery by the Trustee, thus once more holding steadfastly to the law rather than