Madoff Trustee Appeals Ruling Rejecting $9 Billion of Damages in HSBC Case
By Linda Sandler – Aug 30, 2011 10:17 AM ET
The liquidator of Bernard L. Madoff’s firm appealed a judge’s ruling on his lawsuit against HSBC Holdings Plc (HSBA) that threw out almost $9 billion in damages demanded from HSBC and feeder funds.
U.S. District Judge Jed Rakoff in New York ruled July 28 that trustee Irving H. Picard has no right to sue on behalf of customers or the Madoff estate, using common-law claims against parties “who allegedly violated a duty to Madoff Securities’ customers by failing to detect Madoff’s fraud.” The trustee was free to pursue $2 billion in bankruptcy claims, Rakoff ruled.
Picard filed a notice of appeal with the U.S. Court of Appeals in New York and the trial judge, according to court filings yesterday.
Much of the $100 billion Picard is seeking from banks such as JPMorgan Chase & Co. (JPM) involves similar claims to the HSBC case, or other claims being scrutinized by two district judges.
Rakoff’s decision was “clearly bad news for Picard,” New York bankruptcy lawyer Harvey Miller said after Rakoff ruled.
The case is Picard v. HSBC, 1:11-cv-00763, U.S. District Court, Southern District of New York (Manhattan).
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