Madoff Backer Merkin Claims $41 Million in 740 Park Fire Losses
(Bloomberg) -- J. Ezra Merkin, the hedge-fund operator who invested more than $2 billion of his clients’ money in Bernard Madoff’s Ponzi scheme, sued his home insurer for $41 million in artwork and other items damaged in a 2016 fire at his 740 Park Avenue duplex.
Merkin, 67, and his wife, Lauren Merkin, sued AIG Property Casualty Co. in state court in Manhattan Monday. Their abbreviated, two-page court filing didn’t specify the pieces of art that were allegedly damaged. Merkin sold a $310 million art collection, including a number of Rothkos, in 2009 as part of deal with then New York Attorney General Andrew Cuomo in anticipation of a state lawsuit that later settled.
AIG did not immediately respond to a request for comment.
The 2016 fire started in the sauna of the Merkins’ apartment in the building, one of New York’s most exclusive and costly. The prewar co-op’s residents have included John D. Rockefeller, Jacqueline Kennedy Onassis, David Koch and Blackstone Group co-founder Steve Schwarzman. Former Merrill Lynch Chief Executive Officer John Thain listed his apartment in the building in 2018 for $39.5 million.
Merkin met Madoff in the 1980s and ran so-called feeder funds that poured investor money into the con man’s fraudulent securities. Irving Picard, the New York lawyer who has spent more than a decade suing to recover funds for Madoff’s victims, accused Merkin of turning a “blind eye“ to the fraud in order to profit from a scheme that cost investors $19 billion when it collapsed in 2008.
In response, Merkin claimed he was a victim too, noting he lost $110 million of his own money. Merkin agreed to pay $280 million to settle Picard’s claims in 2018.
Madoff, 82, is serving a 150-year sentence in federal prison in North Carolina. A judge in New York this month denied Madoff’s request for compassionate release, based on a claim that he is terminally ill. U.S. Circuit Judge Denny Chin, who sentenced Madoff in 2009, said in a ruling that “it was fully my intent that he live out the rest of his life in prison.”
The case is Merkin v. AIG Property Casualty Co., New York State Supreme Court (Manhattan).
©2020 Bloomberg L.P.