Investors in Madoff Feeder Fund Allowed to Keep Earnings

Investors who redeemed shares in Madoff feeder fund Fairfield – before fraud was discovered – get to keep the proceeds thanks to recent rulings from the BVI Commercial Court and the Eastern Caribbean Court of Appeal. From law firm Harney Westwood & Riegels:

“Fairfield was one of the main feeder funds which invested in Bernard L. Madoff Investment Securities Limited (“BLMIS”) and therefore one of the largest victims of that colossal fraud.  Fairfield filed hundreds of claw back claims against investors who redeemed shares before the Madoff fraud was uncovered, both in the BVI and New York.

Fairfield alleges that before Madoff’s arrest, investors redeemed based on a Net Asset Value (NAV) which itself was calculated on a now-mistaken value of BLMIS, meaning that all redemption payments should be returned…

In a very detailed judgment, the Court of Appeal essentially agreed with the Commercial Court decisions that … the mutual mistake claim was unsustainable… The Court of Appeal held that there were specified contractual redemption obligations to be fulfilled by Fairfield and shareholders, which the shareholders had performed.”

Read the update, Madoff Feeder Fund in Major Court Reversal - Harney Westwood & Riegels»