Madoff Trustee Sues BNP for $1B

The trustee seeking money for Bernard Madoff's victims filed a nearly $1 billion lawsuit against BNP Paribas SA to recover money sent to the French bank by a ``feeder fund'' for the now imprisoned Ponzi schemer.

In a complaint filed Thursday with the U.S. Bankruptcy Court in Manhattan, the trustee Irving Picard said the feeder fund, Cayman Islands-based Harley International (Cayman) Ltd, had in 2008 transferred $975.5 million to BNP Paribas Arbitrage SNC, a unit of the French bank.

Picard said he had won a $1.07 billion default judgment last November against Harley, but has been unable to recover any of this money.

The trustee said federal bankruptcy law and New York state law governing debtors and creditors entitle him to recover the $975.5 million from BNP Paribas.

BNP Paribas in an email said that it believes the complaint has no merit, and that it intends to defend itself vigorously.

Picard has filed roughly 1,050 lawsuits on behalf of former customers of Bernard L. Madoff Investment Securities LLC. The BNP Paribas lawsuit is among his largest against a bank involving Madoff feeder funds.

The trustee has said he has recovered $8.7 billion so far for Madoff victims with $17.3 billion of valid claims. Most of the recovered sum has not been distributed because of litigation.

The case is Picard v. BNP Paribas Arbitrage SNC, U.S. Bankruptcy Court, Southern District of New York, No. 11-ap-02796. (Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick)