ABN Amro Bank NV, the bank run by a Dutch government agency, persuaded a U.S. district judge to take over a $267 million lawsuit brought by the liquidator of Bernard Madoff’s firm.
The trustee, Irving Picard, sued ABN Amro’s Irish affiliates in bankruptcy court, demanding the return of funds they allegedly got from swap transactions with Rye Select Broad Market XL Portfolio Ltd. Picard, who wants $400 million from Rye, said it made leveraged investments with Madoff. U.S. District Judge Jed Rakoff said the case resembled others he’s now considering, according to a court filing today.
More than 60 related lawsuits await Rakoff’s attention, court documents show. Those and others may be affected by his rulings on whether Picard can recoup funds protected by so- called safe-harbor law that governs securities transactions, or take back money paid by the Madoff brokerage to its customers.
A recent U.S. Supreme Court ruling in the Anna Nicole Smith case “precludes a bankruptcy court from exercising jurisdiction over the causes of action here,” Amsterdam-based ABN Amro said in a Sept. 30 filing as it asked Rakoff to take its case.ABN Amro said it plans to rely on the safe harbor in defending itself against Picard’s suits. The bank also said it will argue that money it took out of the Madoff firm was payment for a debt owed by the Madoff brokerage, and that Picard erred in expecting the bank to have detected the fraud.
Read the entire article at Madoff Trustee $267 Million Suit Taken Over by Judge at ABN Amro’s Request – Bloomberg.
