The bankruptcy trustee in the Bernard Madoff case plans to send out checks totaling $505 million to victims of the Ponzi scheme, an amount that will bring the total reimbursement so far to $5.4 billion, according to court papers filed Wednesday.
Irving Picard, the trustee handling the Madoff bankruptcy proceeding, plans to send out the cash distribution -- the third so far in the case -- soon after a hearing in March.
"Returning the maximum amount of funds stolen in the Madoff Ponzi scheme to their rightful owners remains our mission, and the third interim distribution of recovered money signals ongoing momentum in our efforts," Picard said in a statement.
An estimated $17.3 billion was lost by customers in Madoff's worldwide fraud. So far, Picard has recovered $9.3 billion, or about 53 percent of the original losses. In two prior payouts, Picard distributed about $4.1 billion to 2,178 accounts. The Securities Investor Protection Corporation, the nonprofit investor-protection agency involved in the case, has committed $806 million as well, Picard noted.
Because of the two earlier disbursements and SIPC payments, more than 1,100 claims to funds will be satisfied in full, assuming the third round of payments goes out as planned, Picard said.
The average payment in the latest planned round would be about $458,000, with the largest being $115 million, or 4.7 cents on the dollar, Picard said. Once the new payments are done, customers would on average have recouped about 43 cents on the dollar of their losses.
After Madoff's operation went bust in December 2008, Picard and his law firm staff at Baker & Hostetler filed thousands of lawsuits to claw back money Madoff had paid to himself, his family and other investors. Among those investors were the owners of the New York Mets, who last March settled a lawsuit filed by Picard. Under the intricate math of that settlement, the team owners will get a credit toward the $162 million they owe the trustee. Their balance stands at about $90 million, and as each disbursement by Picard is made that amount will fall.
Because of other litigation, some of which reached the U.S. Supreme Court, Picard had to delay paying out large sums of cash to victims. But when those cases were resolved in his favor, Picard said he felt free to make larger distributions.