“It Ain’t Over Till It’s Over”: United States District Court for the Southern District of New York Denies Madoff Trustee’s Bid for an Interlocutory Appeal

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Quoting the great sage Yogi Berra, on January 17, 2012, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York denied the motion of Irving H. Picard, the SIPA trustee for Bernard L. Madoff Investment Securities LLC, for the immediate appeal of the District Court’s order dismissing or otherwise narrowing certain of the trustee’s claims against the defendants, who are former customers of Madoff Securities. Picard v. Katz, 11 Civ. 3605 (JSR), 2012 U.S. Dist. LEXIS 5143 (S.D.N.Y. Jan. 17, 2012). The District Court’s decision reinforces the principle that appeals are best taken once a final judgment is entered, as interlocutory appeals generally cause “vexatious and duplicative litigation, prolonged uncertainty, and endless delay.”

As discussed in an earlier post, on September 27, 2011, the District Court dismissed all but three counts of an adversary proceeding commenced by the trustee against a group of defendants headlined by the current owners of the New York Mets. In the instant motion, the trustee requested that the District Court certify three of its rulings for an interlocutory appeal pursuant to 28 U.S.C. § 1292(b), or enter a final and appealable judgment pursuant to Federal Rule of Civil Procedure 54(b) on the claims dismissed by the District Court’s ruling that section 546(e) of the Bankruptcy Code barred the trustee’s preference and constructive fraudulent transfer claims because the payments Madoff Securities made to the defendants each qualified as either a settlement payment or a transfer made in connection with a securities contract.

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Published In: Bankruptcy Updates, Civil Procedure Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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