Madoff Trustee Can Seek $50 Million Received From Ponzi Scheme

The trustee recovering losses from Bernie Madoff’s defunct investment firm can pursue $49.5 million from two of his client companies that took in fictitious profits tied to his historic Ponzi scheme, a bankruptcy judge ruled.

Montpellier International Ltd. and Prince Assets Ltd.—and their owners, Rafael and David Mayer—failed to show that trustee Irving Picard isn’t entitled to claw back the funds, Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York held Wednesday, denying their motions to dismiss the case.

The judge disagreed with the Mayers’ argument that her court didn’t have jurisdiction.

The ...