The Work

October 26, 2009 2:35 PM

Lawsuits Against Picower Will Move Forward

Posted by Brian Baxter

Prominent philanthropist Jeffrey Picower, who saw his legacy tarnished by allegations that he profited from Bernard Madoff's massive Ponzi scheme, was found dead on Sunday afternoon at the bottom of his pool in Palm Beach, Fla.

In May, Madoff trustee Irving Picard sued Picower and his Florida-based Picower Foundation for allegedly reaping more than $7 billion in Madoff-related profits.

David Sheehan, a partner at Picard's firm Baker & Hostetlertold The Wall Street Journal on Sunday that the trustee has no plans to abandon claims against Picower's estate. (Hat Tip: Main Justice.)

"We will pursue the litigation with the same vigor irrespective of Mr. Picower's passing," Sheehan said. Picard claimed that more than anyone else, it was Picower who benefited the most from Madoff's fraud. (This year Picower joined the annual Forbes list of the 400 richest Americans.)

Sheehan also told The WSJ that talks were held with Picower's lawyers--Schulte Roth & Zabel's William Zabel has served as Picower's longtime counsel--but said it was unclear whether or not a settlement could have been reached.

Now, Picower's death is giving some plaintiffs' lawyers more cause for concern.

"We won't be able to hear from [Picower's] own words whether he was complicit," Jerry Reisman from Garden City, N.Y.'s Reisman Peirez & Reisman told The Associated Press. (Reisman represents 26 Madoff victims.)

In a statement released Monday, Zabel said that an autopsy conducted on Picower revealed that his client suffered a heart attack that caused him to drown. Toxicology results on Picower's body will take ten weeks to complete. (Interesting side note: Earlier this month Zabel's son, Richard, left his position as cohead of the litigation practice at Akin Gump Strauss Hauer & Feld to become chief of the criminal division for the U.S. attorney's office in Manhattan. Zabel subsequently announced that he would recuse himself from any Madoff matters because of his father's relationship to Picower.)

Picower, 67, was never charged criminally and denied having any knowledge of Madoff's fraud.

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