Madoff

In what may be the beginning of the final chapter of more than a decade of litigation involving efforts to recover $41 million of the fictitious profits paid to certain investors in Bernard Madoff’s defunct brokerage firm as part of the largest Ponzi scheme in history, the U.S. Supreme Court on May 3, 2021, denied a petition to review a 2020 decision by a three-judge panel of the U.S. Court of Appeals for the Second Circuit. The decision held that the investors did not have a defense to avoidance and recovery on the basis that they received the payments “for value.” See Picard v. Gettinger (In re Bernard L. Madoff Investment Securities LLC), 976 F.3d 184 (2d Cir. 2020), cert. denied sub nom. Gettinger v. Picard, No. 20-1382, 2021 WL 1725218 (U.S. May 3, 2021).

In particular, the Second Circuit panel ruled that the investors could not rely on a Bankruptcy Code provision insulating good-faith transferees from avoidance liability because that…

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