NEW YORK: Deutsche Bank AG has settled a lawsuit in which it accused two offshore funds of reneging on an agreement to sell it $1.6 billion of claims in the bankruptcy of Bernard Madoff’s namesake firm.
The settlement was revealed on Thursday by lawyers for the German bank and the Kingate Global Fund and Kingate Euro Fund in a letter filed in federal court in Manhattan.
Terms were not disclosed, and the accord requires court approvals in multiple jurisdictions.
Incorporated in the British Virgin Islands, the Kingate funds funneled client money to Madoff for many years before his Ponzi scheme collapsed in 2008.
The funds sold their claims against the former Bernard L. Madoff Investment Securities LLC to Deutsche Bank for 66 cents on the dollar in 2011.
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But the bank said the Kingate funds later got “sellers’ remorse” because the value of the claims rose substantially.
In March 2021, U.S. District Judge Edgardo Ramos rejected the Kingate funds’ request to dismiss Deutsche Bank’s case.
Deutsche Bank had no immediate comment on Friday. Lawyers for the Kingate funds did not immediately respond to requests for comment.
In June 2019, the Kingate funds agreed to return $860 million in a settlement with Irving Picard, the court-appointed trustee liquidating Madoff’s firm.
Picard has recovered more than $14.5 billion overall.
Madoff died in April 2021 at age 82 while serving a 150-year prison term.
The case is Deutsche Bank Securities Inc v. Kingate Global Fund Ltd et al, U.S. District Court, Southern District of New York, No. 19-10823.
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