Official finally moving on $2B Madoff victim payouts
Richard Breeden, the Department ofâ Justice âŕŚspecial masterâ responsible for doling out some $2.3 billion to burned Madoff investors, is finally answering victimsâ questions about when they might get paid â thanks to The Post.
In responsđe to a story earlier this week about his failure to answer investorsâ questions about his timeline for distributing investorsâ money, Breeden on Thursday came clean about his plans.
Hereâs a sampling of the âclarificationsâ Breeden released toŕŚday.
THEN: âIt would be simplerಠif we could give a date when the claims process will begin ⌠We canât do that.â
NOW: âWhile final signoffs still have to ocđ§¸cur, we expect that plan decisions will be made in a matterđ of several weeks or less.â
THEN: âBefore claims can be procesđsed, there are other questionâ¨s that must be answered, including appropriately defining (with particularity) eligibility âŚâ
NOW: âPlan issues have undergone a thorough analysis, and a detailed draft plan is currently under actđ¸ive review.â
THEN: âThe laws governing distribution of forfeited assྲets and claims in brokerage firm bankruptcies are very different.â
NOW: âSuch a decision [to count net-âwinners as victims] would in fact be strange, and has never even been considered.â
In a posting on the Madoff Victims Fund website, Breeden said that a âdetailed draft planâ𦹠for payments âis currently under active review.â Whatâs more, the former head of the Securities and Exchange Commission said âplan decisions will be made in a matter of several weeks or less.â
Thđatâs a far cry from the âSeptember Updateâ he posted online, which was the subject of an earlier Post story because itâą had some investors fretting that he was dragging his feet on payments and âmilking it.â
Indeed, in the initial update Breeden indicated that he was still in the throes of âappropriately definingâ factors that will impact distributions, including âeligibilityâ and ââ standards for calculating the size of an eligible loss,â as well âthe sequencing of distributions.â
âIt would be a lot simpler if we could give a date whâen the claims process will begin,â he đsaid in that update before adding âwe canât do that.â
AppaęŚrently, now he can. And since being calleâ¨d on the carpet, he did.
In reporting out the story, The Post called Breeden three times over five days lookinđg for guidance on this and other issues. He never responded.
Now that the foot-dragging story has come out, however, Breeden is worried that it may have âmis-constđ °ruedâ what he was trying to say.
âItâs a giant leap forward from the prior update,â one holder of Madoff claims said of the special masterâs latest misđsiđ˛ve.
Breeden also clarified another issue that was bugging investors by making it crystal clear â for the first time â that paying net winners iđs not on the table and âhas never even been considered.â
In the earlier, fuzzier update, Breeden, who was retained by the Manhattan US Attorney Preet Baraha in December to distribute the $2.3 billion collected, gave a long explanation of thâąe complicated process for determining who counts as a victim of the scheme.
This had some burned Madoff investors, like Richard Friedman đof New Jersey, speculating that Breeden could make payments to net winners, or those who withdrew mđore from the scheme than they put in to it.
Friedman lost money with Madoff but was sued by Madoff bankruptcy trustee Irving Picard on behalf of his mother, who was deemed a net winner. As such, Freidman was open to the idea that Breeden appeared to be âstarting from scratchâ when it came to defining who qualifies for a distribution, he told The Post after đ§¸the first update.
Breedenâs $2.3 billion is separate from the $9.4 billion collected by Picard. The bulkđ of the money under Breedenâs control comes from the $7.2 billion đsettlement with the widow of Jeffry Picower, a large beneficiary of Madoffâs scheme. The 2010 deal, hashed out jointly by Bharara and Picard, resulted in some $2 billion of the monies going to the DOJ.