$7.2 Billion Settlement Reached with Picower Estate in Madoff Fraud. That's a very impressive headline. But I challenge you to look behind the headlines, behind the big numbers. Friends have been calling me and my family all day saying "wow: isn't this great ... you're going to get money back." Well, the truth is that only a small fraction of investors will ever see a dime of that money. For starters, the Trustee has been largely quiet about how any recovered funds will be distributed. But let's put that aside for a moment. Any monies recovered will go only to a select few (15% of claimants). Those invested with feeder funds, fund of funds, union pension, or other retirement plans, will not see a penny. Nor will those who according to the Trustee's definition of "net equity," a unique "cash-in/cash-out definition, have a 'negative net equity." His definition has been challenged by a number of lawyers representing victims of the worst financial crime in American history. The Federal Bankruptcy judge, Judge Burton Lifland, ruled in Mr. Picard's favor last year (not surprising since Judge Lifland has, not once, ever ruled against Mr. Picard). Briefs have been submitted and oral arguments are slated for first quarter next year in the 2d Circuit Court of Appeals here in New York city.
Don't get me wrong, this is a great achievement for the Trustee, and yes, there are some victims who will recoup money; maybe it's "many" but I can assure you it is far from most.
