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Anna Nicole Smith, Bernie Madoff Meet In Bankruptcy Court

April 16, 2012
[ by Melanie Gretchen ] Hundreds of Bernie Madoff cases pending in Bankruptcy Court have been challenged by defendants seeking to have the cases moved to U.S. district court.  In an order published Friday, U.S. District Judge Jed Rakoff said he will review the request, and will do so in the context of a recent U.S. Supreme Court decision. That decision, involving the estate of former Playboy model Anna Nicole Smith, limited the power of the bankruptcy judges to review claims.  Smith, who died of a drug overdose in 2007, had waged a long legal battle to get part of the fortune left by her late Texas oil baron husband, J. Howard Marshall, whom she had married in 1994 when she was 26 and he was 89. Judge Rakoff said he will review how that decision affects cases brought by the trustee, Irving Picard, against people he believes benefited improperly from Madoff's fraud. Rakoff consolidated 341 cases in his order and gave the defendants until 6/11/12 to appoint lead counsel to argue on their behalf.  He scheduled oral argument for 6/18. Picard, who filed his cases in bankruptcy court, says he has recoveries and settlement agreements totaling $9.068 billion, but $6.4 billion of that is unavailable due to appeals and reserves. Picard says Madoff defrauded customers of about $20 billion. The case: SIPC v. Bernard L. Madoff Investment Securities LLC, U.S. District Court for the Southern District of New York, No. 12-mc-0115. For further details, go to [Reuters, 4/13/12].