On the day the news broke, I received a call from the Securities Investor Protection Corporation (SIPC) and was asked to serve as SIPA Trustee for the liquidation of Bernard L. Madoff Recovery Initiative’s Distributions Exceed All Prior Ponzi Recovery Efforts Just a few months ago – within days of the eighth anniversary of the revelation that Bernard Madoff’s vaunted investment prowess was, in fact, the largest Ponzi scheme in history – we announced our plans for the eighth interim distribution of recovered funds to the victims of the Madoff fraud.
As of August 25, 2017: In the SIPA Liquidation of BLMIS, unresolved matters remain that require court determination. In addition, 51 claims have been “deemed determined pending litigation” and the SIPA Trustee must establish sufficient reserves to ensure that he would be able to make all pro rata distributions to date to all potentially eligible claimants, whether or not their claims are allowed at the time of distribution.
The United States Court of Appeals for the Sixth Circuit, applying Michigan law, has held that an insured vs.
insured exclusion bars coverage for a claim against an insured company’s former officers assigned during bankruptcy to a liquidating trust., 2017 WL 2641085 (6th Cir. The insured, a holding company, owned community banks in seventeen states. As part of its bankruptcy plan, the company, as debtor in possession, assigned all of its causes of action to a liquidating trust, which in turn asserted a claim against former company officers for mismanagement.
The company’s D&O insurer denied coverage based on exclusion for “any claim made against an Insured Person …