Madoff Update: Picard and Baker & Hostetler File First Fee Requests, Totaling More Than $15.5 Million

Irving Picard, the trustee for the SIPA liquidation of Bernard L. Madoff Investment Securities LLC and Bernard Madoff, pending in the U.S. Bankruptcy Court in Manhattan, has filed a first application for interim compensation for services performed by the trustee from December 15, 2008 through April 30, 2009 in the amount of $759,228.75. The trustee suggested that 20 percent of that amount should be deferred for now.

Counsel for the trustee, the law firm of Baker & Hostetler (in which Picard is a partner), submitted its first application for interim compensation for the same period in the amount of $14,662,319.83 (of which 20 percent would be deferred), plus reimbursement of expenses of $274,203.03.
 
In addition to the eye catching numbers, the applications are of interest to me, a former practicing bankruptcy lawyer at Milbank, Tweed, Hadley & McCloy, and to people interested in the Madoff bankruptcy and large bankruptcy cases for the story they tell.
 
For example, the firm’s fee application provides an overview of certain of the significant services rendered by “task codes,” such as Trustee Investigation – Task Code 01 (19,963.25 hours); Bankruptcy Court Litigation – Task Code 02 (4,150.60 hours); Feeder Funds – Task Code 03 (6,204.50 hours); Asset Research and Sale – Task Code 04 (4,080.45 hours), etc.
 
The firm’s fee application recites that, with respect to “Feeder Funds,” Trustee Picard “delegated teams of [Baker & Hostetler] attorneys to identify, investigate and monitor potential feeder funds, and bring actions against such funds for the recovery of estate assets where possible…. As a result of these efforts, during the Compensation Period, the Trustee filed avoidance actions against two “feeder funds” for the return of preference payments made by BLMIS: Vizcaya Partners Limited for the return of $150 million and Kingate Euro Fund Ltd. and Kingate Global Fund Ltd. for the return of $257 million.”
 
More of the story of the Madoff bankruptcy is contained in the trustee's first interim report, which we will report on later this morning.
 
The trustee’s fee application is available at http://www.nylj.com/nylawyer/adgifs/decisions/071309picardapplication.pdf, and the firm’s fee application is available at http://www.nylj.com/nylawyer/adgifs/decisions/071309firmapplication.pdf.