The man chasing money for the victims of Bernard Madoff's
investment scheme is demanding $1.3 billion from a network of
investment firms and banks, including a unit of Swiss bank European
Financial Group S.A.
Trustee Irving Picard, who is responsible for recovering money
for Mr. Madoff's investors, targeted European Financial Group for
$354 million in lawsuits filed Wednesday in U.S. Bankruptcy Court
in Manhattan, saying the bank took in money through some of the
funds that fueled Mr. Madoff's $50 billion Ponzi scheme until its
collapsed in late 2008.
A representative from EFG Bank didn't respond to a request for
comment.
Mr. Picard filed a dozen other lawsuits Wednesday against
financial institutions that took in money before the scandal's
collapse. Royal Bank of Canada (RY, RY.T) was targeted for $105
million, while a former unit of Franco-Belgian bank Dexia Group
(DEXB.BT) should pay $81 million to the recovery effort, according
to the lawsuits.
Another lawsuit was filed against a unit of Swiss private bank
Lombard Odier to recover $179 million. A Cayman Island subsidiary
of Netherlands-based ABN AMRO Bank N.V. was sued for $122
million.
Several lawsuits targeted individuals and entities that were
close to disgraced hedge-fund manager Walter Noel and his Fairfield
Greenwich Group.
One lawsuit attempting to recover $127 million was filed against
three Cayman Island entities controlled by Andres Piedrahita, Mr.
Noel's son-in-law, according to the lawsuit. Another $24 million
lawsuit was filed against Mr. Noel's family trust and named his
four daughters.
Fairfield Greenwich Group's funds fueled Mr. Madoff's scheme for
years by feeding money into his brokerage business.
Last year, the Fairfield liquidators reached a deal with Mr.
Picard to resolve claims against each other and agreed to jointly
pursue the fund owners, including Mr. Noel. Under the settlement,
anywhere from 40% to 85% of the redemption payments clawed back
from Fairfield funds' investors are earmarked for the estate's
creditors.
Wednesday's lawsuits were filed just shy of the one-year
anniversary of a bankruptcy judge's conditional approval of that
settlement, which blocks defendants from claiming that the one-year
statute of limitations on those lawsuits had passed, according to
Amanda Remus, a spokeswoman for Mr. Picard.
The deal with Mr. Picard provided the framework to resolve much
of the litigation involving the network of other feeder funds that
funneled money to Mr. Madoff. It also allows the investors in the
Fairfield funds, who were indirectly invested with Mr. Madoff but
who can't make claims with Mr. Picard, to recover up to $160
million. In return, the Fairfield funds paid $70 million to Mr.
Picard and gave up their claims to $1 billion lost by its
investors.
Since being named the trustee to Mr. Madoff's estate, Mr. Picard
has filed more than 1,000 lawsuits and has recovered at least $11
billion of more than $17 billion of capital believed to be lost in
the Madoff fraud.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com.)
Write to Katy Stech at katherine.stech@dowjones.com.