At least 10 notices of appeal have been filed since March 18, including one yesterday by Lawrence Elins and Malibu Trading & Investing LP.
U.S. Bankruptcy Judge Burton Lifland, overseeing the bankruptcy of Madoff’s defunct business, is allowing the victims to appeal immediately to the U.S. Court of Appeals in New York, meaning they won’t have to wait until trustee Irving Picard denies a claim and won’t have to first appeal to the federal district court.
Lifland’s March 1 ruling will determine how much money, if any, victims may get from the industry-financed Securities Investor Protection Corp., which must repay as much as $500,000 for each qualifying claim. Thousands of customers objected to Picard’s methodology, arguing he wrongfully set claims based on their cash deposits minus withdrawals instead of using the amounts on Madoff’s final account statements. Lifland sided with Picard.
Who Gets What
Picard, hired by SIPC to repay victims of the $65 billion fraud, has said that using account statements to set claims would let the con man decide who gets what, and include profit from trades that didn’t really happen. Under the trustee’s calculation, some victims may end up owing money if they took out more than they put in.
Victims argued that SIPC was required to calculate claims based on customers’ legitimate expectations. Lifland disagreed, saying the account statements were “entirely fictitious.”
Customer claims in the case determine what share victims will receive from lawsuits filed by Picard against Madoff’s biggest investors and beneficiaries, including hedge funds and the con man’s wife, Ruth. About a dozen such cases seek the return of about $15 billion in allegedly fake profit.
Madoff, 71, pleaded guilty in March and was sentenced on June 29 to 150 years in prison for using money from new clients to pay earlier investors in the world’s biggest Ponzi scheme.
The liquidation of New York-based Bernard L. Madoff Investment Securities LLC is the biggest such case undertaken by SIPC, court records show.

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http://www.businessweek.com/news/2010-03-23/madoff-victims-appeal-ruling-on-method-for-paying-fraud-claims.html