2009-05-20nytimes.com

J. Ezra Merkin, the prominent New York financier who lost more than $2.4 billion of his clients’ money in Bernard L. Madoff’s Ponzi scheme, agreed on Tuesday to cede control of three of his hedge funds to a liquidator.

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At a hearing in New York State Supreme Court on Tuesday, Justice Richard Lowe gave Mr. Cuomo’s office and Mr. Merkin’s lawyers until May 28 to complete the agreement. Under the preliminary deal, Mr. Merkin will hand day-to-day control of two funds, Ariel and Gabriel, to Guidepost Partners, which will oversee the liquidation of more than $1 billion in assets remaining in the funds.

Many of the assets in the funds are hard to sell, and most are managed by other subadvisers, including the private equity fund Cerberus Capital Management.



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