Kleinberg, Kaplan, Wolff & Cohen attorneys David Parker and Matthew Gold are part of the legal team that won an important victory in the United States Court of Appeals for the Second Circuit for former customers of Bernard Madoff Securities.
The Second Circuit’s ruling sharply restricts the remedies available to Irving Picard, the Madoff Securities trustee, in his efforts to recover funds from innocent former Madoff Securities customers. Picard had sought to disallow payments made during the six years before the beginning of the Madoff Securities liquidation proceedings, and this ruling limits him to a two year period. The result is a major victory for innocent former customers, including clients of Kleinberg Kaplan, and a significant precedent restricting clawback actions in bankruptcy cases.
Circuit Judge Barrington Parker, writing for the three-judge panel, stated that the decision protects the expectation of finality of securities transactions: “Congress provided that, for a very
broad range of securities‐related transfers, the interest in finality is sufficiently important that they cannot be avoided by a bankruptcy trustee at all, except as actual fraudulent transfers [made within the two year period].”