[ by Melanie Gretchen ]

Bernie Madoff's fraud victims will get their due, in the form of (a much-awaited) recovery of stolen funds.  Irving Picard, the trustee liquidating the imprisoned swindler's firm, has recovered $9.15 billion, or 53% of the $17.3 billion he believes was lost in Madoff's Ponzi scheme.  This month, the latest distribution of $2.48 billion brings the total amount victims have received to about $3.63 billion, including sums committed by the SIPC, which helps customers of failed brokerages.

Former clients can look forward to checks ranging from $1,784 to $526.9 million, mailed on Wednesday to 1,230 former customers of Bernard L. Madoff Investment Securities LLC, according to Mr. Picard.  U.S. Bankruptcy Judge Burton Lifland in Manhattan authorized the latest distribution last month following 2 legal victories for the trustee:

• In June, the U.S. Supreme Court let stand a lower court decision that endorsed Picard's methods for calculating losses.
• In July, a former Madoff customer dropped a court challenge to a $7.2 billion forfeiture by the estate of Madoff investor Jeffry Picower – $5 billion of which would go to the Madoff firm's estate, and the rest to the U.S. government.

What's Taking So Long. So far, further distribution has been impeded by:

• some Madoff victims pursuing their own cases to recover more money, for which the trustee is holding some funds in reserve
• court decisions which have limited his claims against banks such as JPMorgan Chase & Co that did business with Madoff
• the volatility of the Madoff market, according to Joseph Sarachek, managing director of claims trading at CRT Capital Group LLC, a Stamford, Connecticut-based broker-dealer. The market for trading claims on potential recoveries from Madoff's estate will adjust for the distribution, Mr. Sarachek said. Claims that recently traded at around 69¢ on the dollar will likely soon trade in the 30s.

"The real question is when people think the next distribution will be."

The case: Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court, Southern District of New York, No. 08-ap-01789.

For further details, go to [Reuters, 9/20/12].