from Wall Street Journal (subscription required):
The trustee seeking to recover assets for victims of Bernard Madoff’s fraud can continue to pursue claims against family members of Los Angeles money manager Stanley Chais and related entities, a federal judge has ruled.
… Mr. Picard has alleged that Mr. Chais’s daughter and two sons, as well as trusts created for his family’s benefit, knew or should have known Mr. Madoff was engaged in a fraud and that they failed to conduct reasonable due diligence.
“The trustee may or may not prove the requisite facts to establish the elements of his claims after discovery and a trial on the merits,” U.S. Bankruptcy Judge Burton R. Lifland said. “Nevertheless, the trustee’s claims have been adequately pled.”