The fallout from a multi-billion-dollar Ponzi scheme run by the late Bernie Madoff has arrived in the Supreme Court of Bermuda.

The largest such fraudulent scheme in history – investors lost about $18 billion entrusted to Mr Madoff - came to light in 2008.

The one-time chairman of the Nasdaq stock exchange was arrested that December, plead guilty in 2009 to charges that he masterminded the scheme, and was sentenced to 150 years in prison.

Mr Madoff died while incarcerated in 2021 at the age of 82 – but efforts to recoup investors’ funds continue.

Irving H Picard is the trustee for the liquidation of Bernard L Madoff Investment Securities LLC and also the trustee for Mr Madoff in his personal capacity.

In 2012, the trustee launched legal proceedings in the US Bankruptcy Court in the Southern District of New York against four Bermudian-based entities: Grosvenor Balanced Growth Fund Ltd, Grosvenor Private Reserve Fund Ltd, Grosvenor Aggressive Growth Fund Ltd and Grosvenor Investment Management Ltd.

The original claim in the US is in the amount of approximately $36.5 million.

In 2023, Bermudian-based Teneo, the joint liquidators of four Grosvenor entities – Grosvenor Balanced Growth Fund Ltd, Grosvenor Private Reserve Fund Ltd, Grosvenor Private Reserve Fund (Class B) Ltd and Grosvenor Investment Management Ltd - called for proofs of debt as part of liquidation proceedings here.

Mr Picard lodged proofs of debt with the liquidator based on claims in the US Bankruptcy Court proceedings.

Teneo rejected those proofs of debt, and those rejections were appealed by the trustee.

But now the trustee seeks a stay of the appeals in Bermuda pending a final ruling in the bankruptcy case in the United States.

Erik Penz, special counsel of Kennedys law firm, appeared in the court on behalf of Mr Picard on Friday, setting out his client’s position.

He said the liquidators, represented by Rhys Williams of Conyers, take the position that – having lodged proofs of debt – the trustee has submitted to the jurisdiction of the Bermuda liquidation regime and the Bermuda court.

Mr Penz and Mr Williams appeared before Larry Mussenden, the Chief Justice, to seek an Order regarding directions that have been agreed by the parties leading to the eventual hearing of the stay application.

Mr Justice Mussenden granted the Order. The hearing is expected to take place later this year.

Mr Madoff, once a widely-respected member of the investment community in the United States, ran a classic Ponzi scheme that used cash from new investors to pay returns to old ones.

It collapsed under the weight of the 2008 financial crisis when investors sought to redeem their investments – but Mr Madoff could not pay out.

Mr Picard, who has been in position since December 2008, operates a website that provides updates regarding the amounts recovered.

It shows that, as of late February, some $14.66 billion in recoveries and settlements had been made, while distributions from the “Customer Fund” totalled $13.9 billion.