Madoff judge affirms July 2 deadline for claims

NEW YORK -- A bankruptcy judge in the Bernard Madoff case refused Tuesday to waive a deadline for claims against the disgraced financier by people who may be subject to so-called "clawback" efforts.

At a hearing in lower Manhattan, U.S. Bankruptcy Judge Burton Lifland said he saw no need to clarify an earlier order approving the July 2, 2009 deadline. He also indicated he would deal with any future disputes about claims on a case-by-case basis.

The FBI arrested Madoff in December after investigators said he confessed to his sons that he had swindled investors of $50 billion in a Ponzi scheme. The 70-year-old former Nasdaq chairman remains confined to his Manhattan apartment under house arrest.

A trustee overseeing the liquidation of Madoff's assets had told victims they must submit claims to qualify for a piece of whatever he recovers and for up to $500,000 reimbursement from the Securities Investor Protection Corp., or SIPC.

Trustee Irving Picard,also warned that, on behalf of investors who were wiped out, he will go after — or claw back — false profits of investors who withdrew far more than their principal investment.

Lawyers for some investors argued that the judge needed to protect their right to file claims past the deadline if they became the target of a clawback.

Without that protection, the lawyers wrote in court papers, the investors "who have no existing claims to file would nevertheless be forced to make an impossible choice" of whether to file protective claims that could expose them to unwanted scrutiny and hamper their defense if Picard sued them for false profits.

Picard's attorneys countered in their written reply that the judge has no jurisdiction to alter a deadline established by a federal statute "in order to ameliorate the consequences of a remote and speculative controversy."

In a separate ruling, Lifland tossed out a lawsuit by a Long Island fuel service company seeking to recover $10 million it invested with Madoff just six days before his arrest.