Top Courts in U.S. and Britain Enter the Madoff Fray This month, as Bernard L. Madoff completes the third year of a 150-year sentence for masterminding his global Ponzi scheme, the top courts in the United States and Britain are both tackling issues that could have a multibillion-dollar impact on thousands of his victims. On June 21, the United States Supreme Court justices will confer on whether to take up the fiercely disputed issue of how victim losses in the Madoff scheme should be calculated. A federal bankruptcy judge and a Federal Appeals Court in Manhattan have both blessed the method employed by the Madoff bankruptcy trustee, Irving H. Picard. That approach measures losses as the difference between the cash deposited and the cash withdrawn from Madoff accounts in the years before the Ponzi scheme collapsed in December 2008. Those out-of-pocket cash losses total less than $20 billion, according to Mr. Picard. Lawyers for investors who recovered all the cash they invested with Mr. Madoff before his arrest are urging the justices to order Mr. Picard to base victim claims on the final statements they received from Mr. Madoff in November 2008. Total losses based on the last-statement method exceed $60 billion, the trustee reports. In March, the Supreme Court asked the Securities and Exchange Commission to submit a brief on the question. That brief was filed on May 24, and it urged the justices to let the prior rulings stand. To rely on the final statements that Mr. Madoff mailed to customers "would treat fictional profits and securities transaction - all of which were invented and many of which could not possibly have occurred at the prices Madoff claimed - as if they were real," the commission's lawyers argued. The vast majority of petitions for Supreme Court review are denied, of course. Nevertheless, Mr. Picard says he has been obliged to set aside most of the roughly $11 billion in assets he and the government have collected until a final "unappealable" decision has been reached in the case. If the Supreme Court decides to review the issue, that final reckoning would be further postponed. And if the justices rule against Mr. Picard, the fundamental arithmetic of the Madoff fraud will change. The number of victims eligible to share in the $11 billion would increase sharply; consequently, victims with out-of-pocket losses would receive far less than they now stand to recover. The court's current term ends just days after the justices meet to consider whether to hear the appeal, which could mean that parties to the dispute will soon know whether this long-running drama is finally over, or just nearing its final act. Across the Atlantic, the Supreme Court in Britain is weighing a second decision that will drastically affect Mr. Picard's efforts to recover cash withdrawn from the Madoff scheme by offshore investors. The case, Rubin v. Eurofinance, did not arise from the Madoff fraud, but the trustee considers it so critical to his global recovery efforts that he has engaged British lawyers to represent him in the matter. The British case stems from a dubious cash rebate scheme that operated in the United States for several years before it filed for bankruptcy in Manhattan in late 2005, leaving its 30,000 creditors with $160 million in claims against the scheme's British founders. The founders did not defend themselves in the American court, and in July 2008, a bankruptcy judge - who termed their scheme "deceptive" - ruled that they had defaulted in the case and held them liable for the full amount owed to their creditors. The case is now before the British high court because the receivers" asked the courts there to enforce the default judgment imposed by the American court. Initially, in keeping with more than a century of tradition, a British trial court refused to recognize the receivers" claims because they were not based on a judgment obtained from a local court. But in 2010, a court of appeals reversed the trial judge and ruled that the American default judgment should be enforceable in Britain. On May 24, a hearing was held on the issue by the British high court, which replaced the House of Lords as the "court of last resort" in 2009. Among the parties given permission to intervene in the case is Mr. Picard, represented by counsel under the direction of the London firm of Taylor Wessing. According to Nick Moser, a lawyer with Taylor Wessing in London, the outcome of this landmark dispute will be enormously important to the Madoff trustee and to any plaintiff trying to enforce a foreign court's bankruptcy judgment against a defendant residing in Britain and perhaps in other jurisdictions guided by British law - which includes several Caribbean countries popular with the offshore hedge funds that invested in the Madoff scheme. The Madoff trustee has obtained significant default judgments from hedge funds based in London and the Caribbean. If the British appellate court is upheld, the odds of collecting on those awards could greatly improve. As the Eurofinance case indicates, the Madoff trustee's search for assets stretches far and wide. Of the 1,050 lawsuits his lawyers filed, at least 70 of them have international defendants, according to his most recent interim report to the Federal Bankruptcy Court in Manhattan. Law firms have been engaged to represent the trustee in litigation in Bermuda, British Virgin Islands, Cayman Islands, Gibraltar Luxembourg and Switzerland. Lawyers working on his behalf are also conducting investigations in Austria and Italy, where the defendants include Bank Austria, UniCredit and Sonja Kohn, a Viennese financier who played a role in supplying more than $9 billion in cash to Mr. Madoff. Ms. Kohn's lawyers say she was innocent of any knowledge of Mr. Madoff's fraud, and the giant banks deny any liability for investor losses. Early this year, Mr. Picard and the London trustees liquidating Mr. Madoff's British affiliate joined forces to obtain a British court order freezing Ms. Kohn's assets and giving them access to potentially helpful documents in the case. The London litigation against Ms. Kohn and her co-defendants may prove crucial, since a related lawsuit that Mr. Picard filed against them in Manhattan is on shaky ground. It is one of hundreds of cases that were removed from bankruptcy court this spring for separate consideration by a Federal District Court judge, Jed S. Rakoff. In some cases, including the Kohn litigation, Judge Rakoff has already rejected the trustee's claims for damages, ruling that he doesn't have the legal right to sue the giant banks and other financial institutions that did business with Mr. Madoff and his feeder funds. Judge Rakoff also has sharply restricted the trustee's efforts to recover cash that various Madoff investors withdrew from the Ponzi scheme before its collapse. Those decisions, which affect tens of billions of dollars sought by the Madoff trustee, have begun the journey up the appellate escalator that carried the crucial issue of the trustee's claims calculations to the doorstep of the Supreme Court. Brief for the S.E.C. Order in re The Consumers Trust