Madoff Trustee Seeks to End Firm’s Benefits Plan
Madoff Trustee Seeks to End Firm’s Benefits Plan (Update1)

By Christopher Scinta

May 15 (Bloomberg) -- The trustee liquidating Bernard L. Madoff Investment Securities LLC is seeking to terminate the health care, life insurance and disability benefits for the firm’s workers.

Irving Picard, who has said Bernard Madoff used his investment firm as a “personal piggy bank” for staff and family members, filed court papers today asking to terminate benefit plans for current and former Madoff employees effective May 31.

Ending the plans will “reduce the liability and administrative expense” of winding down Madoff’s operation, according to papers filed in U.S. Bankruptcy Court in New York.

The filing didn’t state how many employees were covered by the plans. Picard’s spokesman, Kevin McCue, didn’t have an immediate comment. Notices of the termination were mailed today and a hearing is scheduled for May 27, according to a court document.

Madoff, 71, pleaded guilty March 12 to fraud by using money from new investors to pay off old ones in the largest Ponzi scheme in U.S. history. Before his Dec. 11 arrest, he had told his thousands of clients that they had about $65 billion in accounts with him, prosecutors said. He faces a prison sentence of as many as 150 years.

Picard, a lawyer with Baker & Hostetler LLP in New York, has recovered about $1 billion for investors in Madoff’s money- management business. The sale of Madoff’s market-making business to Castor Pollux Securities LLC for as much as $25.5 million won federal court approval last month. Castor Pollux said it may rehire some of the workers.

The bankruptcy case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Christopher Scinta in U.S. Bankruptcy Court in New York at;

Last Updated: May 15, 2009 18:37 EDT

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