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Keywords

settlementliabilitymotionburden of prooftrustbankruptcycivil procedurelevy

settlementmotiontrustcivil procedurelevy

Related Cases

In re Bernard L. Madoff Inv. Sec., LLC, 489 Fed.Appx. 519, 2012 WL 6634006

Facts

Marsha Peshkin and a large group of other Madoff customers, referred to as 'the Customers', moved to vacate the approval of a settlement between the Trustee of the bankruptcy estate of Bernard L. Madoff Investment Securities, LLP (BLMIS) and the heirs of Norman Levy, a significant customer of BLMIS. The Customers contended that the Trustee did not disclose $100 billion of relevant transactions before seeking approval of the settlement, which they believed was crucial to their case.

The Customers argue that the Trustee failed to disclose $100 billion of relevant transactions between Levy and BLMIS before seeking approval of the settlement.

Issue

Did the Customers demonstrate sufficient grounds under Federal Rule of Civil Procedure 60(b) to vacate the approval of the settlement?

Rule

A motion for relief from judgment under Rule 60(b) is not favored and is granted only upon a showing of exceptional circumstances. The court reviews the denial of such motions for abuse of discretion, and the Customers must show that new evidence is of such importance that it probably would have changed the outcome.

A motion for relief from judgment is generally not favored and is properly granted only upon a showing of exceptional circumstances.

Analysis

The court found that the Customers could not obtain relief under Rule 60(b)(2) because they failed to show that the new evidence was significant enough to likely change the outcome. The $100 billion in transactions were deemed offsetting and did not alter the potential liability of the Levy Heirs. Additionally, the alleged $2 billion margin loan was based on financial statements already deemed fictitious, further undermining the Customers' claims.

The Customers cannot obtain relief under Rule 60(b)(2) because the Customers have not shown that the new evidence was of 'such importance that it probably would have changed the outcome.'

Conclusion

The court affirmed the judgment of the district court, concluding that the Customers did not meet the burden of proof required for relief under Rule 60(b).

For the foregoing reasons, we hereby AFFIRM the judgment of the district court.

Who won?

The prevailing party in this case was the Trustee of the bankruptcy estate of Bernard L. Madoff Investment Securities, LLP, as the court upheld the denial of the Customers' motion to vacate the settlement approval.

The Customers therefore failed to show 'clear and convincing evidence of material misrepresentations.'

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