A decision from a British Virgin Islands court could potentially limit efforts to recover funds for defrauded customers of the now defunct Bernard L. Madoff Investment Securities Inc. (“BLMIS”) as well as for other BVI-domiciled funds. Irving Picard, BLMIS’s liquidating trustee, commenced a series of clawback lawsuits against customers he deemed “net winners” in Madoff’s Ponzi scheme. One of the theories underlying many of Picard’s lawsuits – and a common theme in Ponzi scheme cases – is that amounts recovered by investors in excess of amounts they deposited are “fictitious profits” for which the investors did not provide value. Under theories of actual and constructive fraudulent transfer, Picard has embarked on a clawback campaign against all net winners.
A decision from a British Virgin Islands court could potentially limit efforts to recover funds for defrauded customers of the now defunct Bernard L. Madoff Investment Securities Inc. (“BLMIS”) as well as for other BVI-domiciled funds. Irving Picard, BLMIS’s liquidating trustee, commenced a series of clawback lawsuits against customers he deemed “net winners” in Madoff’s Ponzi scheme. One of the theories underlying many of Picard’s lawsuits – and a common theme in Ponzi scheme cases – is that amounts recovered by investors in excess of amounts they deposited are “fictitious profits” for which the investors did not provide value. Under theories of actual and constructive fraudulent transfer, Picard has embarked on a clawback campaign against all net winners.
A decision from a British Virgin Islands court could potentially limit efforts to recover funds for defrauded customers of the now defunct Bernard L. Madoff Investment Securities Inc. (“BLMIS”) as well as for other BVI-domiciled funds. Irving Picard, BLMIS’s liquidating trustee, commenced a series of clawback lawsuits against customers he deemed “net winners” in Madoff’s Ponzi scheme. One of the theories underlying many of Picard’s lawsuits – and a common theme in Ponzi scheme cases – is that amounts recovered by investors in excess of amounts they deposited are “fictitious profits” for which the investors did not provide value. Under theories of actual and constructive fraudulent transfer, Picard has embarked on a clawback campaign against all net winners.