NEW YORK -- (Mealey's) The bankruptcy trustee for the investment company once run by convicted Ponzi scheme operator Bernard L. Madoff has secured $550 million in a settlement with the family of one of Madoff's earliest investors, according to a motion for entry of order filed Dec. 8 in a New York federal bankruptcy court (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC [In re Bernard L. Madoff], No. 08-1789, S.D. N.Y. Bkcy.).
The motion was filed by Bernard L. Madoff Investment Securities LLC (BLMIS) trustee Irving H. Picard in the U.S. Bankruptcy Court for the Southern District of New York.
Under the terms of the settlement with the family of BLMIS investor Carl Shapiro, which is subject to court approval, the family has agreed to pay $550 million to settle the claims, $38 million of which will be paid by Shapiro's son-in-law in connection with his role with Madoff feeder fund Cohmad Securities Corp.
Picard further states in the motion that the Shapiro family has also agreed to settle a civil forfeiture suit with the U.S. Department of Justice for $75 million.
Picard filed the suit in the Bankruptcy Court stating claims under Sections 544(b), 547, 548 and 550 of the Bankruptcy Code and Sections 270-281 of the New York Debtor and Creditor Law.
[Editor's Note: Full coverage will be in the December issue of the LexisNexis Financial Services Litigation Report. In the meantime, the motion for entry of order is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #88-101221-028B. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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