The trustee seeking money for Bernard Madoff's victims will receive $35.4 million in a settlement with two funds once run by Wall Street hedge fund manager J. Ezra Merkin, Reuters reported yesterday. According to settlement papers filed on Friday in bankruptcy court, the payment will be made by the Ariel Fund Ltd. and Gabriel Capital LP feeder funds, through their receiver Bart Schwartz. In exchange, the trustee Irving Picard will deem valid about $367.9 million of the funds' claims against the former Bernard L. Madoff Investment Securities LLC. Ariel and Gabriel Capital will be entitled to $179.5 million of "catch-up" distributions. The accord requires court approval, and the funds did not admit wrongdoing. Picard is still seeking an additional $280 million from Merkin, his Gabriel Capital Corp, and his Ascot Fund Ltd. and Ascot Partners LP feeder funds.
