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Picard Commissions: Eat What You Kill

To: Lawrence Velvel, Esq.
Dean,
Massachussets School of Law

From: Irv Picard, Esq.
Dean, Madoff Bankruptcy

Dear Larry:

I read with great interest the most recent pontification on your blog, and your concerns about the compensation that I will be receiving in connection with the thankless job that I have been given.

Since you inferred that you may not be as familiar as others re: compensation paid to Trustees, let me clear a few things up.

1. Yes, in accordance with Bankruptcy Court provisions, I will be entitled to as much as 3% of the assets that I recover for the Trust.

2. Yes, So far, I've documented recovering slightly more than $1 billion, most of which came from accounts at BNY and JPMorgan that were readily identifiable at the very outset.

3. Yes, based only on those assets, that were hiding in plain site, this means that I could ultimately receive a commission of $30 million. But keep in mind, our commissions won't get paid for at least several weeks, or perhaps several months. God forbid it should take longer, as I've already put in a bid for a place in Amagansett, and if that falls through, I'm looking at places in Nantucket.

And, these commissions don't necessarily get paid before legitimate claimants are paid.

4. Yes, its very possible that we will recover more. As you are aware, our team of clawyers has been squeezing the nuts of anybody and everybody that we can identify. Yes, this includes the $250 million that we think JPMorgan will want to kick back, and a number of people that the media would otherwise label as "old and unable to work".

Let me say this about that: Just because someone is old, doesn't mean that they can't work. Stanley Chais is a perfect example. Carl Shapiro is a perfect example; he's 95!! Sonny Cohn? Sonny Delaire? They're barely over 70! And Walter Noel? He's old enough to be my father, and he's still working!

To your point that many of the claimants that are being denied their SIPC claims, and claiming they're "destitute"; based on our research, many apparently retired when they were 55, and they've been living very comfortably for the past 15-25 years. I didn't retire when I was 55! And you didn't retire when you were 55! Let them go back to work for a few years! It won't kill them!

As far as your accusation that I'm SIPC's poster boy, and that I'm somehow "protecting their efforts to pay out as little as possible", do I look like a poster boy??

The silliness about SIPC "not paying legitimate claims": trust me when I tell you that the senior staff at AIG, indisputably the most important insurance company in the world, is advising us on the most efficient way to process insurance claims.

Please remember, both the current and previous federal government administration have made it clear that AIG is "one of a kind", and that's why we're relying on their guidance insofar as the claims administration process.

5. On the topic of commissions; this is an "Eat what you Kill business", and unless President Obama and Tim Geithner have appointed you to be the Bankruptcy Trustee Compensation Czar, you can stop fantasizing that they can regulate everybody's compensation. 3% is nothing! Real Estate brokers charge 5% for their services!

So, my charging 3% is certainly not out of line. More importantly, Ezra, Sonny & Sonny, Stanley, Sandra & Sonja, Wally and his boys, Frankie and M. Beans, and the rest--they were making much more in commissions than the paltry 3% that I might stand to earn.

So what if it totals $30 million?? So what if totals double that amount, or even triple that amount?!

Do you know what its like having to sit across a table from Dopamine Jaffe? Or listening to the hundreds of whining voice mail messages that are left at my office every day? I should be getting $300 million for this!

Last-before you start throwing stones across state lines, you might want to be asking Bill Galvin why he's allowed the people from Cohmad to dissolve their bank accounts and spirit away the millions they had on deposit before we could put our hands on it!

Do you know what 3% of even $3 million is?? $90k!! Do you think I want $90k slipping through the cracks?? Of course not!

I'd continue this discussion with you, but I just noticed that trading has resumed on the NYSE, and I've got some positions that need to be monitored.

Best regards,
Irv Picard

Full post as published by Bernard Madoff on June 12, 2009 (boomark / email).