Skadden achieved two important outcomes in litigation stemming from the Bernard Madoff scandal:
- We secured the dismissal of significant portions of a multibillion-dollar suit against UniCredit S.p.A., Pioneer Alternative Investment Management Ltd. and other defendants by Irving Picard, the trustee for the Securities Investor Protection Act (SIPA) liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS). In a sweeping opinion issued on July 28, Judge Jed S. Rakoff of the Southern District of New York agreed with Skadden’s arguments that Picard has no standing to assert common law claims against third parties, which represented the bulk of the claims asserted in the action. The decision, which instantly reduced the approximately $9 billion in damages asserted in the case by billions, provides a reasoned framework for previously unresolved questions about the claims a trustee may make under SIPA.
- The firm represented Tremont Group Holdings, Inc. in its $1 billion settlement agreement with Picard, also announced on July 28. Tremont managed a number of hedge funds that invested assets with BLMIS, the second-largest group of so-called “feeder funds” to invest with Madoff. As a result of the settlement, Tremont’s investors will recover a substantial portion of their Madoff-related losses.