Irving Picard is in a pickle. The trustee seeking to recover funds for victims of Bernard Madoff is caught in his own headlines. How much has been repaid to bilked investors so far? Around $330 million. And how much has been charged in legal fees by the trustee (ie Picard) to return that sum? Why since you asked, around $544 million. What a pricey pickle!
Eyebrows are being raised that Picard has been more successful at collecting fees for himself and chummy colleagues than returning money to investors. The NY Times yesterday claimed that though settlement deals totaling $9 billion have been reached, only $330 million has been paid out. The vast bulk remains tied up in endless court challenges.
Picard declined to be interviewed. His spokeswoman pointed out that so far he has recovered over $7 million a day for cheated investors. Nice one but let’s face it, rather theoretical until the monies are paid out. In any case, went the response, the legal fees are drawn from a fund provided by the securities industry to pay for precisely this sort of thing. Bottom line? The money doesn’t come from recovered Madoff funds. The securities industry is paying trustee Picard’s fees.
The PR Verdict: “C” for Irving Picard. Is there a cheaper way to do this? With over $500 million in fees no explanation sounds particularly convincing but adding mitigating factors and some context helped.
PR Takeaway: When things look bad, add context. Yes the fees are large but they are paid out of a fund provided by the securities industry to cover precisely this sort of issue. Claiming $7 million a day has been recouped for Madoff investors is a nice headline – even if most of it is still held up in the courts and unpaid. Next time why not talk about the other side? Mention was made by Picard’s PR of the relentless attacks by “opposing law firms and their clients with deep pockets.” A few more metrics to describe the squadrons of lawyers assigned to oppose settlements might have bolstered the only credible defense; firepower is needed to beat firepower.
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