NEW YORK (Bloomberg) - Harley International (Cayman) Ltd., an insolvent Cayman Islands-based fund that allegedly funnelled money to Bernard Madoff, was ordered to pay $1.07 billion to creditors of the convicted con man.

Irving Picard, the trustee overseeing the liquidation of Madoff's former firm, Bernard L Madoff Investment Securities LLC, sued Harley in May 2009, seeking to recover phony profits paid to Harley in the six years before the Madoff bankruptcy was filed.

US Bankruptcy Judge Bernard Lifland in New York today entered a judgment against Harley, which is being liquidated in the Cayman Islands, after ruling the fund had failed to contest the suit within the deadline for doing so.

In an October 29 report to Lifland detailing his efforts over the past six months, Picard said he plans to sue Harley in a Cayman Islands court.

"We will take such action as we deem appropriate to seek to recover on the judgment," Kevin McCue, a spokesman for Picard, said in an e-mail on Wednesday.

A phone message seeking comment from Nicolas Matthews and Mark Longbottom of Kinetic Partners, the joint liquidators of Harley, wasn't immediately returned.

Madoff, 72, is serving a 150-year prison sentence in North Carolina after pleading guilty to orchestrating the biggest Ponzi scheme in history.