NEW YORK, July 14 (Reuters) - UBS AG won review by a
Manhattan federal judge of $2.6 billion of lawsuits brought by
the trustee liquidating Bernard Madoff's firm, at least the
fourth time a bank has obtained access to that court.
U.S. District Judge Colleen McMahon agreed to accept the
two UBS lawsuits, which accused the Swiss bank and various
"feeder funds" that steered money to Madoff of profiting from
and covering up his Ponzi scheme.
Her decision is a setback to the trustee, Irving Picard,
who has filed roughly 1,050 lawsuits seeking more than $103
billion for Madoff's victims, and has been trying to pursue his
cases in bankruptcy court.
But banks and some other targets of Picard's lawsuits have
said the trustee is raising issues that cannot be addressed by
a bankruptcy judge, and should be handled in a federal district
court, a higher tribunal. District courts also allow for trial
by jury, while a bankruptcy court does not.
A spokeswoman for Picard did not immediately return a
request for comment.
McMahon has also agreed to handle Picard's $19.9 billion
lawsuit against JPMorgan Chase & Co.
Another federal judge, Jed Rakoff, is considering whether
Picard can invoke racketeering law in a $58.8 billion lawsuit
against Italy's UniCredit SpA, Austria's Bank Medici AG and its
founder Sonja Kohn, and other defendants.
Rakoff is also reviewing some issues in Picard's $9 billion
lawsuit against HSBC Holdings Plc, as well as his $1 billion
lawsuit against Fred Wilpon and Saul Katz, owners of the New
York Mets baseball team.
UBS had in a June 21 court filing questioned Picard's
standing to raise some claims, and said his common law claims
were preempted under a 1998 federal law concerning class-action
lawsuits, the the Securities Litigation Uniform Standards Act.
"I am only interested in dealing with the threshold issues
now -- SLUSA preemption and standing," McMahon wrote on a July
12 letter from UBS' lawyers. "I don't want to deal with other
In February, JPMorgan raised similar concerns, accusing
Picard of effectively pursuing "an enormous backdoor class
action to recoup damages incurred by individuals and entities
other than the firm to which he is the appointed successor."
On Thursday evening, McMahon directed Picard to explain
several matters by the end of business on Friday, including why
he filed two UBS lawsuits.
She also said she does not plan to consolidate the UBS and
JPMorgan cases, but that the SLUSA and standing issues should
be considered "at the same time, and on the same schedule."
Madoff, 73, is serving a 150-year prison sentence.
The cases are Picard v. UBS AG et al, U.S. District Court,
Southern District of New York, Nos. 11-04212 and
For Irving Picard, Trustee: Marc Hirschfield of Baker &
For UBS: Marshall King of Gibson, Dunn &
(Reporting by Jonathan Stempel)