The SIPA trustee for the liquidation of Bernard Madoff’s firm, along with his counsel, is seeking approval for fees of $48.1 million for the period October 1, 2011 to January 31, 2012.
Meanwhile, the trustee is seeking to block a settlement between the New York Attorney General and a former Madoff investor.
For the roughly four-month period, the application – which is the ninth of its kind made by the trustee to a US Bankruptcy Court in New York – seeks approval for fees covering 134,431 hours of legal, professional and paraprofessional services, charged at $357.86 per hour.
This hourly rate includes a 10 per cent public interest discount, resulting in an overall reduction of $5.3 million. The law firm Baker Hostetler and the SIPA trustee, Irving Picard, also wrote off $1.9 million of fees and expenses of around $438,740, according to a statement.
The fees are not deducted from any recovered funds from Madoff’s fraud scheme, but, once approved, will be covered by the Securities Investor Protection Corporation – which the statement highlighted was funded by the securities industry.
So far, the trustee has recovered or reached agreements to recover “$9.1 billion, representing approximately 53 per cent of the approximately $17.3 billion in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims,” spokesperson Amanda Remus said.
More than $1.1 billion has now been distributed to aid defrauded BLMIS customers, Remus said, including an advance from the SIPC to help customers receive money for their allowed claims. The trustee also recently filed a motion in the US Bankruptcy Court for the Southern District of New York seeking approval for a second distribution, of between around $1.5 billion and $2.4 billion (view here).
The court hearing for approval of the fee schedule is set for August 29, 2012.
In related news, the trustee is also trying to prevent the New York Attorney General from settling with a former Madoff investor, saying it would diminish the pool of assets left to customers of Bernard L Madoff Investment Securities.
The matter relates to the Merkin funds, which invested in Madoff’s company, and against which the trustee has a proceeding trying to recover over $500 million, according to a court filing.
However, Attorney General Eric Schneiderman, successor of Andrew Cuomo, announced a $410 million settlement with the Merkin parties in June. This would, the trustee said, go to “select investors” in the Merkin funds ahead of all BLMIS customers - leaving a reduced pool from which to make equitable and pro rata distributions.