January 4, 2012
By: Brenna Working
Andrew Madoff, son of Ponzi scheme artist Bernard Madoff, now faces a $198 million lawsuit, thanks to the decision of a bankruptcy judge in a Manhattan Bankruptcy Court, according to Bloomberg News. The decision illustrates the power the bankruptcy court has to rule on those who have sought its protection.
In Andrew Madoff’s case, the situation worked like this: he filed a claim against his father’s bankruptcy estate in the fallout around the collapse of the Madoff Ponzi scheme. Because he filed that claim in bankruptcy court, he automatically gave the court the power to rule on the claim.
The bankruptcy judge involved handed down his original decision in October of 2011, but Andrew Madoff reportedly appealed the decision to let the suit go forward, insisting that permitting the suit could open the door to expanding the liability of others facing similarly large bankruptcy cases.
But the bankruptcy judge’s new ruling cites a Supreme Court decision, indicating that the young Madoff has no legal basis to appeal to a decision to a higher court. Further, according to the decision, Madoff submitted to the bankruptcy court’s authority when he submitted his original claim in that venue.
Even though the bankruptcy court has permitted the lawsuit to go forward, there is some dispute as to whether the lawsuit has a decent chance of succeeding. While lawyers on both sides of the issue apparently have plenty to say on the issue, those representing Andrew Madoff have allegedly insisted that he has no liability for the $198 million, because he had no knowledge of his father’s schemes.
And yet another contributor to this issue, another U.S. District Judge, has faulted the bringer of the lawsuit, Irving Picard, for attempting to keep the lawsuit bound to the bankruptcy court when it involved issues beyond those addressed in bankruptcy law.
Picard’s original complaint asserted that members of the Madoff family who held senior positions at the Madoff firm were aware of the fraudulent activity going on, profited from it, and should therefore be responsible for compensating the victims.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.