SRZ's Little Legal Circularities: Taking Both Sides of the Madoff Trade

by: Greg Newton
Lawyer William Zabel is sore distressed at the collapse of the JEHT Foundation, “one of the most progressive foundations around.” The main source of funding for its admirable mission of ‘Justice, Equality, Human Dignity and Tolerance’ was the family of the late New York real estate developer Norman Levy (d. 1985), and most of the treasure trove was riding know who.
Soon-to-be former JEHT director Zabel’s day job is the Zabel in Schulte Roth & Zabel, the law firm owing much of its fame and fortune to its hedge fund-related practice. Among the achievements of which was preparing the entirely legal but less than completely specific documents that made it appropriate for GMAC chairman J. Ezra Merkin’s Ascot Partners to invest substantially all of its $1.5 billion or thereabouts with...well, you know who.
Documents which, as is the way of these things, allow the general partner — J. Ezra Merkin — to tickle Ascot Partners’ till to cover the legal fees sure to be incurred when Merkin’s limited partners file suit alleging, say, impersonation of a competent investment manager, among other flaws.
More bad news for Zabel, not to mention Schulte and Roth. Its immersion in the impending Madoff-related fees-for-all feast will likely be constrained by a conflict or two. Or twenty.
by Philip Boroff
Bloomberg Dec. 16 2008
(via The New York Times)
by Alison Leigh Cowan
The New York Times Dec. 16 2008
Earlier on NakedShorts
Ponzi v. Ponzi?
Dec. 14 2008