Madoff bankruptcy trustee sues Koch Industries to give back Ponzi scheme proceeds

The bankruptcy trustee overseeing the liquidation of Bernard L. Madoff Investment Securities LLC. is attempting to clawback proceeds from Koch industries, according to the Wall Street Journal.

The Koch name may be familiar to people following this year’s presidential campaign. The Koch brothers have back numerous political ads including one that criticizes President Obama’s support of Solyndra, now in bankruptcy. The Koch brothers have also donated a great deal of money to a conservative Super Pac, Americans for Prosperity in the effort to oppose President Obama in this year’s presidential race.

According to the clawback lawsuit filed Thursday, bankruptcy trustee Irving H. Picard has asked Koch Industries to return $21.5 million worth of proceeds from an investment in a now defunct company Fairfield Sentry Inc. which funneled invest returns to Koch Industries.

Picard asserts that the $21.5 million was not a legitimate investment return, but proceeds from a fraudulent Ponzi scheme. Picard is not accusing Koch Industries of any wrongdoing.

Melissa Cohlmia, a spokeswoman for Koch Industries says that the lawsuit is without merit.

Bankruptcy attorneys are familiar with the intricacies of liquidation and will take whatever steps necessary to satisfy creditors.

When facing dire financial troubles a company may have no other alternative to hiring a bankruptcy lawyer and seek debt relief. Once a bankruptcy attorney has assessed a company’s assets and debt liabilities they will be able to suggest which filing is line with their needs.