Second Circuit Decision Allowing Madoff Trustee to Claw Back Billions from Overseas Becomes Final as Supreme Court Denies Review

On June 1, 2020, the Supreme Court of the United States sided with the trustee of Bernard Madoff’s now-defunct investment firm by denying a petition for a writ of certiorari filed by major investors that placed funds with Madoff through offshore funds. As Law360 reports, the multi-billion-dollar case had “been closely watched by foreign financial institutions.” The investors had sought the Supreme Court’s review of a decision of the U.S. Court of Appeals for the Second Circuit that allowed the trustee to claw back funds transferred by the Madoff firm’s foreign feeder funds even though those funds are overseas. The investors asserted, with the support of the governments of the Cayman Islands and the British Virgin Islands, that the Second Circuit’s decision was wrong and threatened international discord. The Supreme Court invited the U.S. government to express its views. The government advised the Court that the decision in favor of the Madoff trustee was correct. The Supreme Court’s denial of certiorari allows the trustee to proceed with actions to recoup billions of dollars from the investors and thus to increase the funds available to compensate victims of Madoff’s scheme. Robbins Russell represents the trustee along with Baker & Hostetler LLP and Windels Marx Lane & Mittendorf LLP. Robbins Russell partner Roy Englert argued the case in the Second Circuit, and Global Restructuring Review last year recognized our client’s victory as the “Most Significant Restructuring or Insolvency-Related Litigation” of the year worldwide.

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