This story is reprinted with permission from FC&&S Legal, the industry's only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.
A federal district court in Connecticut has ruled that a victim of the Madoff Ponzi scheme could not recover from her insurer the $3.375 million she paid to settle claims brought by the Madoff bankruptcy trustee, or the nearly $800,000 in attorney's fees she spent in litigation with the trustee.
|Lost $121 million
Beginning in approximately 1972, Edward Kostin, through the Kostin Company, a family partnership he had formed to manage the family assets, maintained an account with Bernard L. Madoff Investment Securities, LLC (“Madoff”). In December 2008, when Madoff was revealed as a massive Ponzi scheme, the Kostin Company's account had a purported net asset value of approximately $121 million.
As a result of the pyramid scheme, the Kostin Company lost the $121 million believed to be in the account, as well as the family's principal – the real money that actually had been invested.
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Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].
