Madoff Trustee Starts Hardship Program for Victims

/Home/Madoff Trustee Actions

Madoff Trustee Starts Hardship Program for Victims
y ZACHERY KOUWE
Published: May 8, 2009
The trustee charged with recovering assets for investors defrauded by Bernard L. Madoff has started a “hardship program” for individual victims to accelerate payments from the Securities Investor Protection Corporation and help them meet daily living expenses.

The program, announced on Friday by the trustee, Irving H. Picard, requires individual victims to file an application to be eligible for an accelerated payment of up to $500,000 from SIPC. Hedge funds, partnerships and other business entities are not eligible for the program, the trustee said.

For accounts at the Madoff firm that were opened after Jan. 1, 1996, Mr. Picard will try to decide on claims within 20 days. For accounts opened before that date, the trustee said he would need investors to send additional account information because investigators were still busy reconstructing those account records.

Mr. Picard plans to evaluate each application based on various indicators of hardship. They include an inability to pay for necessary living expenses like food, housing, transportation and medical expenses; the need to return to work at the age of 65 or older; or a declaration of personal bankruptcy.

Hundreds of victims of Mr. Madoff’s multibillion-dollar Ponzi scheme, many of whom are retirees, have lost their entire life savings, and some have been forced to sell their homes and move in with relatives. Mr. Picard is liquidating Mr. Madoff’s former firm and collecting assets, which will eventually be divided among the victims of the fraud.

Earlier this week, Mr. Picard sued J. Ezra Merkin, the New York financier, for the return of $558 million that his investment funds withdrew from Mr. Madoff’s firm.

SIPC, which provides insurance to customers of failed brokerage firms, can reimburse Madoff victims up to $500,000 each, depending on how much they ultimately lost from the fraud.

More Articles in Business » A version of this article appeared in print on May 9, 2009, on page B5 of the New York edition. Click here to enjoy the convenience of home delivery of The Times for less than $1 a day.