Two British Virgin Islands funds managed by Kingate Management Ltd. filed for bankruptcy in New York to protect a recent settlement with the trustee responsible for marshaling funds to repay victims of Bernard Madoff’s Ponzi scheme, the Wall Street Journal reported. Kingate Euro Fund Ltd. and Kingate Global Fund Ltd. sought chapter 15 protection on Thursday at the U.S. Bankruptcy Court in New York, telling a judge they are concerned about the threat of litigation from Deutsche Bank AG. In court papers, representatives for the Kingate funds said news of the settlement, worth as much as $400 million, has prompted Deutsche Bank to try to revive a dispute over efforts dating back to 2011 to buy bankruptcy claims that would give the German bank a stake in the settlement proceeds. The Kingate funds are among the largest offshore fund managers that fed cash to Bernard Madoff. The funds collapsed shortly after Madoff’s fraud was exposed in 2008 and have been in a liquidation proceeding in the British Virgin Islands since 2009.
