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NEW YORK — (Mealey’s) Two feeder funds of Bernard L. Madoff Investment Securities LLC (BLMIS) will pay nearly $500 million to settle all claims associated with their role in Madoff’s massive Ponzi scheme, according to court documents filed Monday in New York federal bankruptcy court (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, No. 08-01789, [Irving H. Picard v. HSBC Bank PLC, et al., No. 09-1364] S.D. N.Y. Bkcy.).
According to a motion for entry of judgment filed by BLMIS liquidation trustee Irving H. Picard in the U.S. Bankruptcy Court for the Southern District of New York, the settlement with feeder funds Herald Fund SPC and Primeo Fund will benefit the BLMIS customer fund by nearly $497 million, pushing the total amount recovered by Picard during the liquidation proceedings to more than $10 billion.
Under the terms of the settlement, the money will be placed in the BLMIS customer fund, and the Herald Fund will receive nearly $1.6 billion in the liquidation, which entitles Herald to “catch-up payments from the four interim distributions to BLMIS victims to date.”
“Out of these catch-up payments, the first approximately $497 million will be used to pay the amount owed by Herald Fund to the BLMIS Customer Fund. As of approval of settlement, Herald Fund SPC becomes an allowed claimant and will receive further distributions along with all other BLMIS customers with allowed claims not yet fully satisfied,” Picard says.
Both feeder funds are in bankruptcy proceedings in the Cayman Islands, and both deposited more in BLMIS than they withdrew before BLMIS’s bankruptcy was announced, according to Picard’s press release announcing the settlement.
Additional terms of the settlement include:
Picard is represented by Marc E. Hirschfield and Oren Warshavsky of Baker & Hostetler in New York.
Herald Fund appeared pro se.
Primeo Fund is represented by Gary S. Lee of Morrison & Foerster in New York.
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