Lowenstein Sandler Assists Parties Facing Exposure To Madoff Losses

Sunday, March 1, 2009 - 01:00

Since the announcement of the Bernard L. Madoff Investment Securities scandal, Lowenstein Sandler has counseled Madoff investors on a number of emerging issues and is monitoring developments closely. Drawing on the extensive experience of attorneys from a variety of disciplines, including litigation, investment management, securities, creditors' rights, estate planning, tax and white collar defense, the firm is providing assistance and strategic advice to individual and institutional investors, funds, and charitable entities as they consider their own potential losses and possible exposure.

The partners in charge are Robert D. Chesler, Insurance Coverage; Michael B. Himmel, chair of the Litigation Department, White Collar Criminal Defense; and Robert G. Minion, Investment Management.

Significant decisions need to be made - some quickly - and those affected will need to consult with professionals regarding some or all of the following matters:

• Individual direct investors who received redemptions from the Madoff firm may be subject to "clawback" claims by the Securities Investor Protection Corporation (SIPC) trustee to recover some or all of those funds;

• Indirect investors who invested through feeder funds and who redeemed may face "clawback" claims by the funds to recover some or all of those funds;

• Feeder funds and other institutional investors and their managers or executives may be the target of claims by partners or shareholders;

• Investment managers and advisers who recommended to clients that they invest in Madoff funds may be pursued by those investors;

• Charitable entities and their boards may face claims for losses by constituents;

• Off-shore funds may be subject to scrutiny about U.S. taxes;

• Significant investors and funds may be subpoenaed by the U.S. Securities and Exchange Commission, the U.S. Department of Justice, SIPC or other federal and state regulators seeking information about the apparent fraud or possible new claims;

• Investors with losses may be entitled to claim deductions on federal and state income tax returns or to amend prior years' returns, and individual investors may need to reconsider estate planning, including the tax treatment of past gifts;

• Investors may have claims to recover some portion of losses from insurance policies;

• Investors may have an opportunity to pursue SIPC claims.