Kramer Levin client Irving Picard, trustee for the Madoff estate, won two major victories from the Second Circuit and defeated certiorari in both cases. On Aug. 30, 2021, a unanimous Second Circuit panel reversed decisions by district and bankruptcy judges that had dismissed nine-figure claims by the trustee. The lower courts held it was the trustee’s burden to prove the absence of good faith on the part of Madoff’s immediate and subsequent transferees. The Second Circuit disagreed, holding that good faith is an affirmative defense that the defendants must raise. The Supreme Court denied certiorari on Feb. 28, 2022.
Earlier, on Feb. 25, 2019, a unanimous Second-Circuit panel reversed decisions by district and bankruptcy judges that had dismissed billions of dollars’ worth of claims by the trustee. The lower courts had ruled that the trustee’s claims constituted an impermissibly extraterritorial use of the U.S. Bankruptcy Code and violated principles of international comity. The Second Circuit disagreed with both conclusions, and the Supreme Court denied review.