Progress on Madoff recovery lawsuits

Bloomberg News / July 22, 2009

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NEW YORK - The trustee liquidating Bernard Madoff’s business told a judge he is in settlement talks with three Fairfield Greenwich Group hedge funds accused of taking $3.54 billion in fake profit from the conman’s fraud.

Trustee Irving Picard said he is in similar talks with two funds run by Bermuda-based Kingate Management Ltd., accused of withdrawing $255 million in fake profit from Madoff’s investment advisory business before his Dec. 11 arrest.

US Bankruptcy Judge Burton Lifland in New York this week granted Picard’s request to give the Fairfield and Kingate funds extensions until Sept. 21 and July 27, respectively, to respond to the lawsuits.

The extensions will let them “continue ongoing settlement discussions,’’ Picard said in a filing.

Picard, a lawyer with Baker & Hostetler LLP, sued Fairfield Sentry, Greenwich Sentry, and Greenwich Sentry Partners in May, over claims they received “unrealistically high’’ returns on their investments. He also sued Kingate Global Fund and Kingate Euro Fund in April, accusing the Madoff “feeder funds’’ of withdrawing $255 million from Madoff’s firm within 90 days of the arrest.

Picard is seeking about $14.5 billion in damages from some of Madoff’s biggest investors.