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Boies Schiller's $3.5 Billion Suit Joins Madoff Litigation Scrum
By Andrew Longstreth
June 11, 2009
At the D&O Diary blog, Kevin LaCroix keeps a list of Madoff-related complaints. In a recent post, he notes that the list, which runs 18 pages, shows how diverse and far-flung the litigation spawned from the scandal has become.
The most recent suit--at least that we know of--is a class action filed by Boies, Schiller & Flexner in New York federal court Wednesday against, among others, Madoff-feeder fund Kingate Management Ltd. and its directors for $3.5 billion. (Boies, Schiller is already serving as co-lead counsel in a Madoff suit against Fairfield Greenwich Group.) Here's the suit and a story from Bloomberg. The five name plaintiffs underscore the global reach of Madoff's fraud. Alvaro Castillo is an individual living in Switzerland; Wall Street Securities is a Panamanian corporation; BFF Trust was formed under the Commonwealth of the Bahamas; Criterium Capital Funds is a Netherlands Antilles private limited liability company; and Banca Arner is a Swiss corporation.
The allegations are familiar--that Kingate did not adequately perform due diligence into Madoff's operation. "Defendants in fact did not properly vet or monitor Madoff and, instead, falsely reported steadily increasing account value to plaintiffs while paying themselves hundreds of millions of dollars in fees based on those fictitious amounts," the complaint alleges. "As a result, defendants are responsible for plaintiffs' massive losses."
This isn't the first time Kingate has been hit with a suit over its investments with Madoff. The liquidator of Madoff's firm, Irving Picard of Baker & Hostetler, sued the firm in April, and an investor filed a derivative complaint in New York state court last month.
And that leads to a point made by LaCroix: Do some of these defendants, like Kingate, have enough assets or insurance to resolve all the claims against them? "[In] many cases, the same defendants have been targeted so many times by so many different claimants that whatever assets or insurance the targets may have are likely to satisfy only a very small amount of the various plaintiffs’ claims," writes LaCroix.
Albuquerque Lawyers , Oregon Banks
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S.E.C. Report Details Lapses i
