The Bankruptcy Court for the Southern District of New York issued an important ruling in a Madoff related matter, dismissing all claims against the Firm’s banking client. The trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”) sued the Firm’s client to recover more than $50 million in funds transferred to the client from a B.V.I. investment fund. BLMIS contended that the funds were initially transferred from BLMIS to the B.V.I. fund.
Working with a large defense group of similarity situated banks, the Firm argued that BLMIS’s claims were barred by the principles of international comity and the prohibition on extraterritorial application of certain bankruptcy provisions. In a complete victory, the U.S. bankruptcy court issued a 94-page ruling, dismissing the claims on the grounds of international comity.