4 responses to ““Clawback” Threat in Madoff Case Creates Tricky Issues in Bankruptcy”

  1. If somehow the trustee finds a way to “clawback” amounts already paid to investors who legitimately withdrew their principal (and “profits”) then every hedge fund, private equity fund and VC fund would presumably be subject to such “clawbacks” in the future. I would imagine that hedge fund offering documents would be drafted a bit stronger so that investors understand that prior investors are not subject to any future “clawback” based on the manager’s current or later misdeeds.

  2. A convened Court of Common Law could throw any clawback judgment, and even the recognition of the Bankruptcy Court and Trustee themselves, into the legal cesspool. Non-recognition of the Court, and its process, is a valid alternative. Any effort to back up the Bankruptcy Court judgements with physical force could be met with equal physical force, both defensive and offensive.

    Think about it, this exactly why a court cannot enforce against a foreign sovereign, as their judiciary does NOT have to recognize the court.

    With perhaps tens of billions redeemed non-USA, good luck to the Trustee in getting a red cent back from those venues.

  3. Pomzi scheme, the biggest is Social security. The younger workers pay in money and the government uses the money to pay the old retired members/investors.
    The “claw back rule” would allow the young people to use the bankruptcy court to collect from the old members all the money paid to them ,when the system [social security] goes bankrupt.

    Claw back? Did’nt the american indians get land back that was taken away?
    Claw back seem’s to be another phrase for finding justice.

    The Madoff case: The big money players that knew the Ponzi “play” was going on because Madoff told them in confidense about the scheme were warned to pull there money before the December 11 collapse. Thats not “clawback”, thats jailtime for many investors who had the insider knowledge.
    FBI-“Follow the Money.

  4. hmmm. You are right. What if an Non American? This justice is for every citizen who resides at US. what judiciary actions will take against Non Americans. Trustee’s be careful.