$7.2 Billion Madoff Lawsuit Due for Settlement Thursday

The Wall Street Journal reports that a Manhattan bankruptcy judge has been asked to sign off Thursday on a $7.2 billion deal to settle the largest lawsuit in the Bernard Madoff fraud -- and it involves the late Palm Beach billionaire Jeffry Picower.

A hearing has been requested by a trustee appointed to recover funds for Ponzi-burned investors. Federal authorities announced the deal with Jeffry Picower's estate last month.

Picower's widow always insisted that her husband never knew Madoff was conning clients. Picower drowned after suffering a heart attack in his Palm Beach swimming pool in 2009.

The question for many has always been how much Picower knew about what Madoff was doing. He and his wife started the Picower Foundation in 1989. The foundation gave millions to the Massachusetts Institute of Technology, Human Rights First and the New York Public Library. It also funded diabetes research at Harvard Medical School.

The foundation, whose assets were managed by Madoff, said in its 2007 tax return its investment portfolio was valued at nearly $1 billion.

After the Madoff scandal broke, the Picower foundation said it would have to cease grant-making and would be forced to close. But the trustee's lawyer said Picower's claims that he was a victim "ring hollow" because he withdrew more of other investors' money than anyone else during three decades and should have noticed signs of fraud.

Madoff is serving a 150-year prison sentence.