Judgment puts Madoff payments on hold

Payouts that would have been mailed out today to victims of Bernard Madoff's investment fraud have been put on hold, after a legal judgment that may have blown a $3bn hole in efforts to recover lost money.

Irving Picard, the trustee of Madoff's collapsed investment business, is this weekend scrambling to appeal a Manhattan court ruling that dramatically limited the scope of a lawsuit against Fred Wilpon, the owner of the New York Mets baseball team, who, Mr Picard claimed, should have known that Madoff was operating a pyramid scheme.

Mr Wilpon is one of several Madoff investors from whom Mr Picard is trying to claw back money that they invested and then withdrew from Madoff before the trickster confessed to his decades-long fraud in 2008. The Manhattan court said only those who were "willfully blind" to the fraud should have to return money they took out before 2006.

Mr Picard said that the ruling, if it is not overturned by a higher court, could limit several similar lawsuits.