Madoff trustee reaches $277 million accord with money manager's family

Reuters News
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Posted: Oct 28, 2016 11:24 AM

(Reuters) - The court-appointed trustee liquidating Bernard Madoff's firm said on Friday he has reached a settlement with the family of late Beverly Hills money manager Stanley Chais that will provide more than $277 million to victims of Madoff's Ponzi scheme.

Irving Picard, the trustee, said victims will receive $232 million of cash, and the rights to $30.7 million of assets that are expected to be sold.

Picard also said a $15 million restitution fund supervised by the office of California Attorney General Kamala Harris will pay claims by investors in partnerships related to Chais and the state.

The accord requires approval by U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, who is overseeing the liquidation of Bernard L. Madoff Investment Securities LLC.

Chais, who died in September 2010 at the age of 84, once handled investments for elite Hollywood clients such as Oscar-winning director Steven Spielberg.

He had been accused in a 2009 U.S. Securities and Exchange Commission lawsuit of funneling nearly $1 billion of client money to Madoff, a close friend since the 1960s, while ignoring red flags that the swindler's seemingly steady returns were bogus.

U.S. regulators accused Chais of pocketing $270 million of improper fees, and said he and his family withdrew $546 million more than they invested with Madoff.

Chais maintained at the time that he was also a Madoff victim and had lost nearly all of his own money.

Madoff, 78, is serving a 150-year prison term.

(Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe and Steve Orlofsky)