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Madoff liquidator pursues $80m held in the Bank of Bermuda

Lawyer Justin Williams: Madoff liquidator wants to hire his firm.

Liquidators of Bernard Madoff's company are going after around $80 million being held in the Bank of Bermuda that they believe could be used to help pay off the convicted fraudster's swindled investors.

Last Wednesday they asked a judge for permission to hire Island lawyer Justin Williams to pursue matters related to the money, as part of their efforts to track down and protect assets that could help to pay something back to victims of Madoff's $65 billion fraud.

Irving Picard is the trustee appointed to liquidate Bernard L. Madoff Investment Securities LLC. In a court filing last Wednesday, attorneys' acting for Mr. Picard asked a bankruptcy court judge for permission to hire Williams Barristers & Attorneys in Hamilton.

"The trustee seeks to retain Williams as special counsel because of its knowledge, expertise and experience in liquidation proceedings in the Cayman Islands and other foreign jurisdictions," according to the filing signed by Baker & Hostetler attorney David Sheehan.

Mr. Williams, said in a declaration filed with the court that Mr. Picard wants counsel to represent him in matters related to $80 million held at the Bank of Bermuda. The funds belong to the bankruptcy estate, Mr. Williams said.

Mr. Williams will also advise on cross-border insolvency issues and asset tracing and recovery, and expects "where necessary and appropriate, to pursue litigations seeking recovery of funds", the statement said.

A Bank of Bermuda spokeswoman said on Thursday that the bank does not comment on active litigation.

Mr. Picard is responsible for conducting a broad investigation of Madoff's assets and actions and recently sought permission to hire lawyers to represent him in Gibraltar and Luxembourg. Mr. Picard said he's already recovered about $1 billion to repay Madoff clients.

Bernard Madoff pleaded guilty March 12 to defrauding investors by using money from new ones to pay off old ones in a $65 billion Ponzi scheme. He faces as many as 150 years in prison at his sentencing in June.

• Investors who lost money in the Madoff scheme by investing via feeder funds are likely to demand a fees refund, but finding what could total hundreds of millions of dollars in fees may be a complex task, Geneva-based lawyer Franco Foglia said on Thursday, according to a report by Reuters.

Mr. Foglia, who has been advising clients who lost money in investments channelled through London-based consultant FIM Advisors to two Madoff feeder funds run by Kingate Management Ltd of Bermuda, said that in almost 14 years of existence, Kingate may have collected more than $300 million in fees, but that much of this may have passed through FIM, which advised Mr. Foglia's clients on their Kingate investments.

Britain's Serious Fraud Office has been probing the role of FIM in the Kingate funds, according to a source close to a law enforcement agency, while FIM also advises on $2 billion of assets invested in other funds, some of which had limited exposure to Kingate.

Mr. Foglia's estimate includes front loads, or introduction commissions paid to distributors, and other charges, management and performance fees, he told Reuters in a telephone interview. November factsheets for both the Kingate funds show they charged an annual management fee of 1.5 percent.

Kingate lost $2.7 billion in its Kingate Global Fund and 616 million euros ($833.6 million) in Kingate Euro, both domiciled in the British Virgin Islands, both invested almost entirely in Madoff-related entities.