More Buyers Step Up to Buy Madoff Unit, Lawyer Says

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More Buyers Step Up to Buy Madoff Unit, Lawyer Says


By REUTERS
Published: April 7, 2009
More potential bidders have expressed interest in buying the securities trading business of Bernard L. Madoff, after one would-be buyer offered $15 million for the unit, a lawyer for the trustee liquidating the assets said on Tuesday.

The trustee is hoping to obtain the highest price for the trading operation, which Mr. Madoff himself had valued at about $700 million a few months ago.

Revenue from the sale would be used to help reimburse Mr. Madoff’s defrauded clients, many of whom lost their life savings in his investment fraud. Mr. Madoff is in jail and awaiting sentencing after admitting he ran a long-standing Ponzi scheme.

“A number of new people have come forward” expressing interest in the trading operation, a lawyer for the trustee, Marc Hirschfield, said Tuesday at a brief hearing in Federal Bankruptcy Court in Manhattan.

He said the possible additional bidders had emerged after the trustee, Irving Picard, announced a tentative deal last month in which the Boston financial firm Castor Pollux would buy the trading operation for $15 million.

At the trustee’s request, Judge Burton Lifland approved an auction process for the trading unit, with any bids due by April 22 and a potential auction set for April 27. If there are no other bids, the Castor Pollux deal will most likely go forward.

Outside the courtroom, Mr. Hirschfield said that fewer than a dozen potential new bidders had emerged and said these parties were conducting due diligence.

Asked if he thought the business could be sold for significantly more than $15 million, he said, “We’ll know on the 22nd. We certainly hope so.”

Last month, Mr. Picard said it had been difficult to find a buyer for the trading business, which has been stained by its connection to Mr. Madoff.

One difficulty is that the business has not been operational since Mr. Madoff’s arrest in December and needs significant capital to restart.

Bernard L. Madoff Investment Securities had a trading business and a money management business. The fraud took place in the investment unit but the entire operation is still under investigation.