Peter A. Zisser’s article “Madoff and the Net Investment Method; Equity Goes Where the Law Fears to Tread” was published in BNA’s Bankruptcy Law Reporter. He discusses the Second Circuit Court of Appeals decision approving the net investment method for computing customers’ claims against the Madoff estate. The decision does not indicate whether the trustee is bound by any applicable statute of limitations for fraudulent transfers or whether the decision is meant to affect the Bankruptcy Code’s two-year statute of limitations. According to Peter, because the net investment method as approved by the Second Circuit does not address the crucial issue of timing, it is legally flawed and may give rise to further litigation.
Reproduced with permission from BNA’s Bankruptcy Law Reporter, 23 BBLR 1438, 11/17/2011. Copyright © 2011 by The Bureau of National Affairs, Inc. (800-372-1033).