Merkin’s N.Y. Madoff Settlement Not a Done Deal

from Bloomberg Business Week:

Madoff Trustee Sues New York to Stop Merkin Settlement

The liquidator of Bernard Madoff’s estate seeks to stop New York Attorney General Eric Schneiderman from completing a $410 million settlement with a former Madoff investor (J. Ezra Merkin) that the trustee said might leave little for customers of the convicted Ponzi scheme mastermind.

… “Merkin’s money is not limitless, and with the prospect of over $400 million depleted through the settlement, the trustee is concerned that little or nothing will be left for BLMIS customers,” Irving Picard, the trustee liquidating Madoff’s brokerage, said yesterday in a bankruptcy court filing in Manhattan.

Asking the federal judge in Manhattan to impose a preliminary injunction against Schneiderman, using bankruptcy law, he said, “If other attorneys general around the country could simply walk into state courts and secure settlements as the NYAG did, the BLMIS estate would be decimated, with residents of various states favored.”