AlixPartners assists the Trustee in reaching more than 70% in distributions to eligible claimants

On February 25, 2022, the AlixPartners Madoff team administered the Trustee's thirteenth interim distribution to victims of the largest Ponzi scheme in U.S. history. When combined with the prior twelve distributions, Irving Picard, the SIPA Trustee, has paid at least 70.452 percent of each customer's allowed claim. The 70% recovery threshold is significant and underscores the overall team's historic recovery effort. Shortly after Mr. Madoff's arrest in December of 2008, leading industry experts predicted a recovery of pennies on the dollar. For comparison purposes, eligible unsecured claimants in other high-profile liquidations in the financial brokerage sector have received a significantly smaller percentage payout over the same period, including in another multi-billion dollar Ponzi scheme wherein investors have been paid slightly more than ten percent of allowed claims.

The administration of the Trustee's interim distributions to eligible victims of Mr. Madoff's massive fraud is one of many crucial tasks performed by the AlixPartners engagement team. The distribution process requires extensive coordination with the Trustee and his team. The complexity of the distribution process is exacerbated by the vast magnitude of this Ponzi scheme. The AlixPartners team has facilitated all thirteen allocations. Some of the many tasks performed by the AlixPartners team include calculating the interim distribution percentage, confirming claimant details ahead of preparing the distribution checks, and tracking any allowed claims that have changed hands via court-authorized sales as well as various testamentary proceedings.

As financial advisors to the Trustee, our mission is to assist with ongoing recovery efforts with the end goal of compensating the allowed claimants to the fullest extent possible. This historic effort has resulted in recoveries of more than $14.5 billion to date. Distributions and SIPC (Securities Investment Protection Corporation) advances paid to claimants total nearly $14.3 billion. It is also worth noting that as a SIPA liquidation, one hundred percent of the recoveries are paid directly to the victims. All administrative costs are paid separately by SIPC. Out of the allowed 2,655 claims relating to 2,289 accounts, 1,509 accounts, or nearly sixty-six percent (all allowed claims up to $1.692 million), have been fully satisfied following the thirteenth distribution.

Now that the thirteenth interim distribution is complete, the Trustee has already commenced early preparations for the fourteenth allocation of recoveries to eligible claimants. As the Trustee continues in his unrelenting efforts to recover funds for victims of this monumental fraud, the AlixPartners team's mission of providing much-needed relief to eligible victims will move forward.

Read about our reflections on 13 years of the Madoff Recovery Effort.