Madoff’s brother seeks compensation for side firm
NEW YORK — The brother of disgraced financier Bernard Madoff has demanded a $500,000 licensing fee for a branch of the family business recently put on the auction block, a lawyer told a bankruptcy judge on Thursday.
Peter Madoff’s asking price for Primex Holdings LLC became a potential sticking point in a pending sale of a trading operation that was deemed legitimate, attorney Marc Hirshfield said at hearing in Manhattan.
Hirshfield, who represents a trustee overseeing the liquidation of Bernard Madoff’s business assets, said his law firm will take legal action to try to force Peter Madoff to give up the rights to Primex at no cost. Meantime, the buyer has agreed to move forward with the deal for the market-making division, he said.
Primex, which operated out of Bernard Madoff’s Manhattan headquarters, is described on its Web site as a digital trading system for brokers.
There was no immediate response to a message left for Peter Madoff’s attorney.
Bernard Madoff, 70, faces a maximum sentence of 150 years in prison after pleading guilty in March to multibillion Ponzi scheme fronted by his investment advisory service. He was jailed while awaiting sentencing.
Madoff has claimed he was the only one in on the massive fraud. But federal investigators doubt his story, and have been trying to determine whether his inner circle committed crimes as well.
Earlier this week, trustee Irving Picard auctioned off the market-making division to raise money to pay off claims from thousands of burned investors. The winning bidder, Boston-based Castor Pollux Securities, agreed to pay $1 million at closing and then payments of up to $24.5 million in revenues from future trades.
Madoff’s own estimate that the trading operation was worth hundreds of millions of dollars was vastly inflated, Hirshfield said in court on Thursday.
“Obviously, you can’t trust any numbers Bernie Madoff puts out,” he said.
He also said the sale price was hurt by “a certain taint” created by the scandal.
U.S. Bankruptcy Judge Burton Lifland said he would sign off on the sale once some minor details are resolved.