Madoff Trustee Seeks $47.9 Million In Additional Fees

The largest financial fraud in U.S. history – the Bernard Madoff Ponzi Scheme – has ruined (and ended) lives and fortunes. But it also has led to an incredible amount of legal work for the trustee, Irving Picard, and his law firm, Baker & Hostetler LLP. On Friday, right before the President’s Day holiday weekend, the firm filed its eighth fee application with the U.S. Bankruptcy Court for the Southern District of New York. The bottom line: the firm asked the bankruptcy court to approve $47,967,371.55 in legal fees, plus reimbursement of $1,245,333.46 in expenses; this request is for the four month period from June 1, 2011 to September 30, 2011. 

The 90 page application contains significant information about the lawyers working on the case, the status of the recovery efforts and the primary issues on which Picard and his lawyers are focusing. We’ll delve into those today in some depth.
 
It’s also important to keep in mind, as the application indicates, that the legal fees “are not coming from any of the victims, and they’re not coming from the estate.” Rather, they are paid by the Securities Investor Protection Corporation (“SIPC”), a membership organization funded by the securities industry.
 
Still, a $47.9 million legal fee filing for a four month period is an eye opener. We here at the Financial Fraud Law Blog and the Financial Fraud Law Report believe it is important to look at it carefully. Check back in here later for our updates.