On Monday, the U.S. Supreme Court refused to take up an appeal brought by Irving Picard, the court-appointed bankruptcy trustee charged with recovering assets on behalf of Madoff’s bankruptcy estate and distributing them to victims of Madoff’s massive Ponzi scheme.
Picard’s appeal sought to revive a lawsuit that had been dismissed by two District Courts and the Second Circuit Court of Appeals seeking billions of dollars from large financial institutions, including HSBC, UBS, and JP Morgan. The lawsuits alleged a variety of state common-law claims, including claims for fraud, unjust enrichment and conversion, among others. The lower courts held that Picard did not have standing to bring these state law claims on behalf of the Madoff bankruptcy estate—only individual claim holders could bring these cases under state law.
Before denying Picard petition for certiorari, the Supreme Court invited the U.S. Solicitor General to file a brief expressing the views of the United States about the issues presented in the appeal. The Solicitor General’s brief, submitted several weeks ago, urged the Supreme Court to leave in place the lower court decisions as correctly decided.
The Supreme Court’s decision not to consider Picard’s appeal of this lawsuit does not mean that the Madoff bankruptcy estate’s efforts to recover funds from banks are over. Picard intends to continue pursuing various bankruptcy claims totaling approximately $3.5 billion against many of the same international financial institution defendants, including UBS and HSBC, which Picard alleges facilitated Madoff’s fraud.