Madoff trustee Irving Picard just raised $212 million for victims of Bernie Madoff's Ponzi scheme, courtesy of Madoff's largest so-called feeder funds.   The settlement with 2 bankrupt feeder funds related to the Fairfield Greenwich Group was was approved by Judge Burton Lifland in U.S. Bankruptcy Court.  

Mr. Picard made changes to the deal after investors in Fairfield Sentry Ltd., a related fund, objected to the settlement, which is part of a total $4 billion deal with funds related to the Fairfield Greenwich Group.  According to court papers, Picard agreed to the following:

• Fairfield Sentry Ltd investors can sue fund managers to try to recoup their losses. 
• Picard will drop claims of $212 million against the Greenwich Sentry LP and Greenwich Sentry Partners LP funds. 
• These funds, in return, will reduce their claims against the Madoff bankruptcy estate and sign over claims they had made against Fairfield Greenwich Group.
• Greenwich Sentry will cut its claim against the Madoff estate to $35mn, from more than $140mn;  the other fund’s claim will drop to about $2mn from $2.5mn.

Last month, Picard said he'd end his effort to collect $3.8bn that 3 offshore Fairfield funds allegedly withdrew from the Madoff firm in the final 6 years of the fraud - while the offshore funds agreed to cut their claims on the Madoff estate.  Fairfield Greenwich Group, founded by Walter Noel, invested about $7 billion with Madoff.

The main case is SIPC v. Bernard L. Madoff Investment Securities LLC, 08-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).     [Bloomberg, 6/28/11]]