The Supreme Court Refusal to Review the Method of Computing "Winners" and "Losers" in Madoff Cases Creates More Joy for the Wilpons - Installment 80
Michael Kline writes:
On June 25, 2012, the Securities Investor Protection Corporation issued a press release reporting and applauding the Supreme Court’s refusal to review the net equity calculation formula used by Irving H. Picard, the Trustee in the Madoff liquidation. The consequence is that his method of calculating “winners” and “losers,” which was also adopted by Federal District Court Judge Jed S. Rakoff and others in various cases in the Madoff bankruptcy proceedings, will stand.
The effect of the Supreme Court refusal will be to decrease substantially the aggregate number of claimants and amounts of claims against the pool of money that has already been recovered, and may be recoverable in the future, by Picard in the Madoff cases. The Supreme Court refusal should also accelerate the distribution of the substantial funds already collected by Picard.
As discussed in Installments 78 and 79 of this blog series, another effect will be to enhance greatly the financial position of the Wilpon-Katz-Mets individual, business, family trust and charitable interests (collectively, the “Wilpons”), who were former defendants of Picard in their celebrated but now-settled case. The Wilpons will be able to receive almost immediate gratification for their recent settlement by having Picard reduce their aggregate deferred settlement payments of $162 million through offset of the allocable share of distributions that would have otherwise been received by some of the Wilpons, based upon the $178 million of their claims that Picard has allowed.
As also discussed in Installment 79, Picard will now also be continuing his appeal in the Second Circuit Court of Appeals, which, to the extent successful, would further benefit the Wilpons.
(Michael J. Kline, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office, and is a past Chair of the firm's Corporate Department. He concentrates his practice in the areas of corporate, securities, and health law, and frequently writes and speaks on topics such as corporate compliance, governance and business and nonprofit law and ethics.)
[To be continued in Installment 81]