Madoff Charter Company Declares Bankruptcy

 - November 24, 2009, 12:54 PM

Swindler Bernard Madoff’s charter company, BLM Air Charter, filed for voluntary bankruptcy (Chapter 11) in the U.S. Bankruptcy Court Southern District of New York on November 12. The bankruptcy filing lists two creditors as holding the largest unsecured claims: Embraer Aircraft Customer Service, with a claim of $240,728.50; and Rolls-Royce, with $181,289.76. Irving Picard, court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities (BLMIS), submitted an affidavit supporting the Chapter 11 filing. The affidavit notes that BLMIS paid more than $25 million to BLM Air Charter from 2001 to 2008 “and those amounts have not been repaid.” The amounts due Embraer and Rolls-Royce are for maintenance programs for an Embraer Legacy 600 owned 50 percent by BLM. The objective of the Chapter 11 filing, according to the affidavit, is “to stay Rolls-Royce’s threatened termination of its warranty agreement, so as to avoid a potential loss of value to the aircraft. Further, the trustees believe that the aircraft can be marketed and sold for a significant price pursuant to the relevant provisions of the bankruptcy code.” Madoff was sentenced on June 29 to a prison term of 150 years for a Ponzi scheme that cost investors more than $50 billion.