Madoff Investors Continue to Seek Protection

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Under federal bankruptcy law, the bankruptcy trustee in the Madoff case may demand (clawback) that certain investors return their distributions. The trustee has already started demanding a return of distributions from certain larger investors, including the so-called “feeder funds.” In due course, the trustee will be able to focus its efforts on the smaller investors as well.

Klueger & Stein, LLP already represents numerous Madoff investors, many of them individuals with investment losses (from Madoff) ranging from $2 million to over $100 million. “Today, many calls are from elderly people who have lost all or most of their money and are afraid that the trustee will take their home,” explains managing partner, Jacob Stein. “We try to do what we can to shield their remaining assets, but with a creditor as intelligent and aggressive as a bankruptcy trustee, there are no guarantees of success for most clients.”

Jacob Stein explains that not all assets are subject to the long-reach of the trustee. Certain assets are simply exempt from the claims of creditors, including certain types of retirement plans, life insurance, annuities and a limited amount of equity in a residence. Asset protection focuses on converting assets that are not exempt into assets that are exempt.

Klueger & Stein, LLP is one of the nation’s leading asset protection law firms. Its partners, Robert F. Klueger and Jacob Stein, are well-known authors and speakers.

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• New Tax Laws Preempt Existing Trusts Tax - December 20th, 2010