Gerson Quoted by AP on Difficulties Faced by Madoff Investors Seeking RecoveryAssociated Press January 20, 2009
Stuart Gerson, a Member of the Firm in the Litigation and Health Care & Life Sciences Practices in the Washington, DC and New York offices, was quoted by the Associated Press in an article concerning difficulties faced by investors seeking to recover funds placed with Bernard Madoff, architect of a multi-billion-dollar Ponzi scheme.
In the article, "Only A Small Recovery Likely For Madoff Investors," Gerson said investors are likely to get "pennies on the dollar, if that."
While investors and creditors of Enron Corp. have collected about 50 cents on the dollar, Madoff investors aren't expected to get that amount. That's because companies such as Enron have tangible assets to sell, while frauds such as Madoff's primarily involve tampering with financial results in an effort to boost stock prices.
Investors might also pursue lawsuits by third-party investors against feeder funds and individual investment managers that sent money to Madoff. But Gerson said succeeding in such cases, which could be the longest path to recovering funds, would be difficult, because Madoff was regularly paying out supposed profits and was never found to be violating regulations.