A Manhattan bankruptcy judge will consider a settlement Tuesday that raises millions of dollars for Bernard Madoff‘s cheated investors.
Under the deal, real-estate developer Edward Blumenfeld, as well as his family and company, will return $32.75 million in cash that they received from investing with Mr. Madoff before the 2008 collapse of his Ponzi scheme.
They’ll also surrender $29.35 million in claims against Mr. Madoff’s investment firm.
The settlement, the product of multiple mediation sessions, resolves litigation that trustee Irving Picard brought in December 2010 to recover $88 million that Mr. Blumenfeld and the other defendants received from Mr. Madoff in the six years before his arrest, including $27 million in false profits. The lawsuit also sought to knock out the claims the defendants brought against Mr. Madoff’s firm.
Mr. Blumenfeld and his fellow defendants disputed the lawsuit and denied that they received the payments from Mr. Madoff’s investment firm with any knowledge or suspicion of fraud.
Mr. Picard, who is overseeing the liquidation of Mr. Madoff’s firm, says the deal will avoid the need for costly and time-consuming litigation.
Mr. Picard has recovered or struck deals to recover more than $9.8 billion of the $17.3 billion in principal that Mr. Madoff was convicted of stealing from investors. More than half of the recovered funds have been returned to investors.