Imagine a day in the not-so-distant future, when SIPC Trustee Irving Picard finds himself in the unusual position of having to wrap up his work in connection with liquidating Bernie Madoff's investment firm - all because legal fees had effectively consumed the corpus of this bankrupt entity.

A gross distortion?  Perhaps.  But consider this:  Bankruptcy Judge Lifland signed off on Mr. Picard's request for $5,010 in average daily compensation for himself - for work covering the 4 months ended 5/31/10.  The judge also approved another $283,179.45 a day for his law firm, Baker & Hostetler.  Ten other law firms in the U.S. and abroad will split $3 million. 

Some victims called the fees excessive, arguing that Mr. Picard had a conflict of interest because he's paid by SIPC while making decisions on insurance payments the group must make to Madoff victims.  The judge rejected these objections, as well objections on 3 previous occasions.  [WSJ, 9/15]