Madoff trustee seeks fast appeal of JPMorgan loss

The trustee seeking money for victims of imprisoned swindler Bernard Madoff plans an immediate appeal of a court decision throwing out $19 billion of damage claims against JPMorgan Chase & Co, the largest U.S. bank.

Irving Picard, the trustee, in a Thursday court filing signaled his intent to appeal U.S. District Judge Colleen McMahon's Nov. 1 decision that he lacked power to pursue most claims against JPMorgan, Madoff's main bank for two decades.

The Nov. 1 decision eliminated all but $425 million of Picard's $19.9 billion lawsuit against JPMorgan, a big setback in Picard's three-year effort to recover money for former customers of Bernard L. Madoff Investment Securities LLC.

McMahon sent the remainder of Picard's case to the U.S. bankruptcy court in Manhattan. But the trustee asked that final judgment be entered on the major claims she dismissed, so that he can appeal to the 2nd U.S. Circuit Court of Appeals.

Seeing "no just reason for delay," Picard said an immediate appeal would make a settlement more likely, and provide "much needed finality" as to whether his claims are viable.

"We continue to believe the trustee's claims are baseless, and will continue to defend our case," JPMorgan spokeswoman Jennifer Zuccarelli said on Thursday.

JPMorgan has previously said there was no showing that anyone at the bank knew of Madoff's Ponzi scheme. Madoff, 73, is serving a 150-year prison term.

In her decision, McMahon said Picard, as trustee for the Madoff firm's estate, could not bring a variety of claims against the bank for harm caused to former Madoff customers. She said those claims belonged to the former customers.

Her decision echoed the reasoning that a colleague, Judge Jed Rakoff, used in a July decision striking down about $8.6 billion of Picard's claims against HSBC Holdings Plc.

On Monday, some former Madoff customers filed their own $19 billion lawsuit against JPMorgan.

Picard has said he has recovered $8.7 billion for former Madoff customers who have $17.3 billion of valid claims.

David Sheehan, a lawyer for Picard, in a Nov. 3 interview said the trustee is confident he will recover sums to "hopefully fully satisfy the investors with valid claims."

The case is Picard v. JPMorgan Chase & Co, U.S. District Court, Southern District of New York, No. 11-00913.

(Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick)