Victims to push for Madoff’s bankruptcy

Attorneys for victims of Bernard Madoff’s multibillion-dollar Ponzi scheme filed a lawsuit to force Madoff into bankruptcy, court records show.

Jonathan Landers, one of the attorneys for the victims, said the suit filed in U.S. Bankruptcy Court in New York City would make it easier to recoup the victims’ funds, USA Today reported Tuesday.

Madoff pleaded guilty in March to what is thought to be the largest Ponzi fraud in history, losing an estimated $65 billion.

A Ponzi scheme involves diverting money from new investors in a fund to cover dividend payments for already established investors.

By forcing Madoff into bankruptcy, Landers said, it increases the assets that will be available to victims.

Ira Lee Sorkin, Madoff’s attorney, declined to comment on the suit, the newspaper said.

A spokesman for Irving Picard, the court-appointed trustee in charge of recouping money for the victims, also declined to comment. Picard said earlier a bankruptcy filing would complicate the effort to recover funds. Court fees would also subtract from the money available for Madoff’s victims, Picard said.

U.S. District Judge Louis Stanton called that claim speculative.

In a ruling Friday, Stanton wrote a bankruptcy trustee’s orderly and equitable administration of his individual estate would benefit Madoff’s victims.