(April 6, 2011) — Lawyers overseeing the liquidation of one of Bernard Madoff’s so-called “feeder funds” have sued the Abu Dhabi Investment Authority (ADIA) in an effort to recover $300 million allegedly redeemed more than five years ago.
“Unless redemption payments paid to shareholders are recovered for the funds’ estate, the funds will be unable to satisfy their liabilities and claims,” the filing said, according to Bloomberg. Representatives for Fairfield Sentry — the feeder fund that invested in the Ponzi scheme — are using a “clawback,” which occurs when a fund performs worse than hoped, to obtain refunds of money paid to investors through fraudulent means.
The suit against ADIA, which does not allege any wrongdoing on the part of the sovereign wealth fund, is one of more than 200 cases filed by lawyers overseeing the liquidation of Fairfield Sentry, which solicited investments around the world that were then invested with Madoff.
According to the legal filing obtained by Bloomberg, the money is needed to meet the demands of a $3.2 billion lawsuit filed against Fairfield Sentry by Madoff trustee Irving Picard. Court records have indicated that the Abu Dhabi sovereign wealth fund is due to respond to the lawsuit in May.
Madoff, who was arrested in December 2008, is currently serving a 150-year prison sentence after he admitted to heading the largest Ponzi scheme in history. The government has auctioned or sold his multi-million-dollar homes and possessions to repay investors.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742