Irving Picard, trustee for the liquidation of Bernie Madoff’s firm, announced Thursday that he had reached a $1 billion settlement with Madoff “feeder funds.”
Picard, working for the Securities Investor Protection Act (SIPA) liquidation of Bernard L. Madoff Investment Securities, said he has reached a settlement with more than a dozen domestic and foreign investment funds and their affiliates.
The settlement needs approval of the U.S. Bankruptcy Court for the Southern District of New York. A hearing on the matter is scheduled for Sept. 13.
He also settled with a former chief executive associated with Tremont Group Holdings, the multibillion-dollar money-management company and operator of the second-largest Madoff “feeder fund” group, the Rye Select and Tremont families of funds.
At the same time, at the behest of Rep. Scott Garrett, R-N.J., chairman of the House Financial Services Subcommittee on Capital Markets, the Government Accountability Office has said that it will conduct a comprehensive evaluation of the actions of the Securities Investor Protection Corp. (SIPC), Picard; and the Securities and Exchange Commission’s involvement and oversight of the liquidation.
According to a release announcing the settlement, the deal also includes three co-defendants named in the suit, filed on Dec. 7, 2010: Oppenheimer Acquisition Corp., an affiliate of the Oppenheimer family of mutual funds which acquired Tremont Group in 2001, and Oppenheimer’s parent corporations, MassMutual Holding and the Massachusetts Mutual Life Insurance Co.
As part of the settlement agreement, the release states that defendants will deliver cash payments into escrow totaling more than $1 billion, which will ultimately be placed into the Customer Fund and distributed, pro rata, to Madoff customers with allowed claims.