Baker Hostetler serves as court-appointed counsel to Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Securities LLC (“BLMIS”). In January of 2011, the SIPA Trustee obtained approval from the United States Bankruptcy Court for a $5 billion settlement for BLMIS customers with allowed claims. At the same time, the Bankruptcy Court also issued a permanent injunction with respect to claims that were duplicative or derivative of the SIPA Trustee’s claims. After an appeal, the District Court affirmed the settlement and the injunction in March of 2012. In the interim, two named plaintiffs moved the Bankruptcy Court to allow their putative securities class actions to proceed in federal court in Florida. On June 20, 2012, the Bankruptcy Court denied their motions, holding that the plaintiffs’ claims, though labeled as securities claims, were duplicative and derivative of the SIPA Trustee’s claims, and thus barred by the automatic stay provisions of the Bankruptcy Code and by the permanent injunction. Read the decision here.
