Trustee agrees to sell part of Madoff’s business

A court-appointed trustee overseeing the liquidation of Bernard Madoff’s assets announced on Friday he has reached a potential $15-million
deal to sell a trading operation within the disgraced financier’s firm.

The agreement with Boston-based Castor Pollux Securities leaves open the possibility that the operation could go to a higher bidder before the sale is finalised, trustee Irving Picard said in a statement.

Picard called the deal ”a successful outcome of the broadly marketed sales process”. Castor Pollux had no immediate comment.

The trustee has been selling off Madoff’s business assets — including works of art in his midtown Manhattan office — to cover thousands of claims brought by victims of the former Nasdaq chairperson’s multibillion-dollar Ponzi scheme.

The market-making division managed by Madoff’s brother and two sons was separate from the secretive investment advisory business central to
the scam. At a forum last month for victims, Pickard said investigators had concluded the trading operation was legitimate and should be sold to the highest bidder.

Under the terms of the deal, Castor Pollux would take over office equipment and data of the business but not the employees, who were fired on Friday. The firm would pay $500 000 at closing and then payments of up to $15-million in revenues from trades until 2012.

”The structure of this transaction enables the Madoff victims to participate in future value derived from the assets acquired by Castor Pollux,” Picard said.

The 70-year-old Madoff faces a maximum sentence of 150 years in prison after pleading guilty earlier this month to 11 charges including fraud, perjury and money laundering. He was jailed while awaiting
sentencing.

During the plea, Madoff described the investment advisory business as ”the vehicle of my wrongdoing”. But he also insisted ”the other businesses my firm engaged in, proprietary trading and market making, were legitimate, profitable and successful in all respects”.

In November, Madoff notified 4 800 investors that their money had grown in value to nearly $65-billion, a sum investigators say was fictitious. Authorities have said the amount clients likely trusted Madoff was probably closer to $17-billion — money he admitted he never invested.

Madoff has told the Securities and Exchange Commission that he had between $823-million and $826-million in personal assets, with $700-million of that estimate attributed to his ownership interest in his business.

The FBI and regulators are still trying to determine if members of Madoff’s inner circle were in on the fraud. They say the investigation could drag out for months. – Sapa-AP

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