UBS’ Luxembourg unit must transfer the assets it holds for LuxAlpha Sicav-American Selection, a fund that invested with Bernard Madoff, to another bank, a Luxembourg court ordered.
Luxembourg Judge Agnes Zago today ruled that UBS’ local unit, a custodian bank for LuxAlpha, must transfer the money within 24 hours or face a daily fine of 1 million euros ($1.3 million), said court clerk Claudine Schuemperli. UBS argued that the liquidator’s request could conflict with a US trustee who is winding up Bernard L Madoff Investment Securities.
Investors are seeking to recover the remains of Madoff’s assets to compensate for as much as $65 billion in losses from the New Yorker’s Ponzi scheme. LuxAlpha, which had $1.4 billion in net assets on November 17, now has about 38.8 million euros, lawyers said.
Liquidators for LuxAlpha, which invested about 95 per cent of its money with Madoff, had sued UBS for “rejecting” their demands to transfer what’s left in the fund to a “neutral” bank. The Luxembourg judge’s decision to take note of the US trustee’s intervention in the case doesn’t affect the ruling, said Olivier Rodesch, a lawyer at Vilret Avocats.
“It means that the judge acknowledges the voluntary intervention of a party that isn’t yet part of the case, either as claimant or defendant, to allow it to take a position on the facts or legal points later,” said Olivier Rodesch, a lawyer at Vilret Avocats in Luxembourg. “It doesn’t change anything for the US trustee.”
The case concerns a dispute between the US trustee and LuxAlpha’s liquidator about who should control the LuxAlpha funds, said Tatiana Togni, a spokeswoman for UBS.
“The bank did not have any interest in those funds,” Togni said. “UBS (Luxembourg) was not in a position to choose between the two. Therefore, UBS (Luxembourg) accepts the decision by the competent court, as its legal position in this matter is not affected by this.”