New York Attorney General Eric Schneiderman persuaded a federal judge to decide a dispute with the Bernard Madoff brokerage trustee over distributing a $415 million settlement with a Ponzi scheme investor to victims of the fraud.
District Judge Jed Rakoff said he was convinced that the case, started in bankruptcy court by trustee Irving Picard, requires a ruling by a higher court.
Schneiderman in June agreed to settle a state lawsuit against the former Madoff investor, J. Ezra Merkin, by allotting most of the settlement money to investors in Merkin’s hedge funds and the rest to the state. Picard responded by suing Schneiderman to stop him from completing the deal, saying it obstructs his own efforts to collect $500 million from Merkin and his funds for different investors.