Madoff victims fuming over trustee's $35M legal bill

A group of “several hundred” former customers of con man Bernard Madoff objected to a request for $34.6 million in legal fees by Irving Picard, the trustee overseeing the Madoff bankruptcy, and his law firm. Picard and Baker & Hostetler LLP on Aug. 20 asked a U.S. bankruptcy judge in Manhattan to approve the payments for work done from February through May, bringing their total fee requests in the case to $96.7 million. The former Madoff investors argued in court papers filed today that Picard and Baker & Hostetler shouldn't get any payment for the work, claiming they are improperly trying to minimize payouts by the Securities Investor Protection Corp. at the expense of Madoff's victims. “They have a conflict of interest as a result of which they are barred from receiving any compensation under established precedents and principles of professional conduct,” attorney Helen Davis Chaitman wrote. Picard and Baker & Hostetler are claiming a total of $288,189 a day during the period, including weekends and holidays, Chaitman said in court papers. Chaitman's clients have objected to three previous fee requests. Picard, who has recovered more than $1.5 billion for Madoff creditors, had no comment on today's objections. The SIPC is required to reimburse Madoff victim losses up to $500,000. Picard and U.S. Bankruptcy Judge Burton Lifland have said that losses are to be calculated based on the amount of principal lost to Madoff. His victims say losses should be calculated based on the final account statements issued by Madoff's firm before his arrest in December 2008. Madoff, 72, pleaded guilty last year to orchestrating the biggest Ponzi scheme in history. He is serving a 150-year sentence in federal prison in North Carolina.