Skadden Arps, the white-shoe Manhattan law firm that represented Alphonse “Buddy” Fletcher’s failed hedge fund empire, has agreed to pay $4.25 million in a settlement agreement with some of those allegedly defrauded by the scheme.
Skadden’s client, the now-bankrupt Fletcher Asset Management, was described as a Ponzi scheme in a bankruptcy trustee’s report last November.
In the agreement, filed in court Friday, trustee Richard Davis said that investors, including four pension funds and various Fletcher entities, “might have claims against Skadden premised on advice Skadden allegedly provided or failed to provide to the funds, and Skadden’s alleged failure to protect adequately the interests of the Funds and their investors.”
The settlement is part of an ongoing attempt by the trustee to recover assets for victims of the alleged scheme.
Skadden denied the assertions but settled to avoid “expensive, time-consuming” litigation whose outcome was uncertain, the agreement said.