A bankruptcy judge has approved a request by the trustee liquidating Bernard L. Madoff’s investment firm and his team of lawyers for roughly $15 million in interim counsel fees. At a hearing Thursday, David J. Sheehan of Baker & Hostetler, who is counsel for trustee Irving H. Picard, told Southern District of New York Bankruptcy Judge Burton R. Lifland that tracing the trail of money in the complex fraud required a full-service team of attorneys. Moreover, Sheehan said, the case has generated a “vast array of international litigation,” an onion that “has yet to be peeled to its core.”
An attorney for the Securities Investor Protection Corporation, which appointed Picard, of Baker & Hostetler, as trustee, told Lifland the agency supported the fee applications. But Helen Davis Chaitman of Phllips Nizer, on behalf of three Pennsylvania residents who invested with Bernard L. Madoff Investment Securities LLC, urged the judge to reject the fee requests. Chaitman, whose clients have filed claims against the trustee, accused Picard of violating his mandate under the Securities Investor Protection Act by failing to look at customers’ most recent statements when evaluating requests for SIPC funds. Chaitman also said Baker & Hostetler labored under a conflict of interest.
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