New York State Supreme Court Approves Procedures for Quantification of Claims in Anticipation of Proposed $200 Million First Interim Distribution to Investors in Former J. Ezra Merkin Investment Funds - Ariel Fund, Ltd., and Gabriel Capital, L.P.

NEW YORK, Aug. 3 /PRNewswire/ -- Justice Richard B. Lowe, III, of the New York State Supreme Court in Manhattan, has granted the motion of Bart M. Schwartz, as Receiver for Ariel Fund, Ltd., and Gabriel Capital, L.P. – two private investment funds formerly run by J. Ezra Merkin that are alleged to have secretly invested more than one-fourth of their assets with Bernard L. Madoff – to set a Claims Bar Date, fix manner of providing notice of such Claims Bar Date, and establish procedures for resolution of objections, in anticipation of a First Interim Distribution of more than $200 million to investors of the Ariel and Gabriel funds.  This distribution amount will be drawn from the approximately $298 million in available cash and cash equivalents, less anticipated reserves of approximately $95 million for the funds' ongoing investment commitments, operating expenses, and disputed claims which have been asserted against the funds.  The Claims Bar Date has been set for September 20, 2010, and that date also will be the deadline for filing objections to the proposed First Interim Distribution.

Bart M. Schwartz, the Receiver for the Ariel and Gabriel funds, said, "I am very pleased with Justice Lowe's decision to allow us to proceed in our efforts to make this $200 million First Interim Distribution of cash to injured investors quickly and efficiently, while ensuring that all legitimate creditor claims are paid or properly reserved for, and all parties have full notice and an opportunity to be heard.  We will press forward as quickly as is possible following the Bar Date, in an effort to ensure that injured investors receive their proportional shares of this First Interim Distribution before the end of 2010."

Mr. Schwartz went on to say that "we also will continue in our efforts to maximize overall returns to investors, including through prudent, value-preserving liquidation of the funds' estimated remaining $1 billion of assets, and through pursuing additional recoveries from culpable parties."  

The Receiver's legal counsel, James C. McCarroll of Reed Smith LLP, added:  "We would like to emphasize to investors in the funds that unless they believe the Receiver has incorrectly stated their proportional ownership interests in the statements we will be sending out to each investor shortly, they will not have to take any action in order to receive their First Interim Distribution.  If the Court ultimately approves the making of this First Interim Distribution, then all investors listed on the funds' books, other than Mr. Merkin and his affiliates, will receive their proportional shares of the First Interim Distribution as quickly as is possible."

Requests for copies of the Order, and any questions or requests for further information, should be directed to Bart M. Schwartz, the Receiver, at [email protected] or +1-212-205-4190; or the Receiver's legal counsel, James C. McCarroll, at [email protected] or +1-212-549-0209.  Requests pertaining to Ariel Fund, Ltd., also may be made to Geoffrey Varga of Kinetic Partners, at [email protected] or +1-345-623-9900.

The case is The People of the State of New York v. J. Ezra Merkin, et al. (Index No. 450879/2009).

SOURCE Bart M. Schwartz of Guidepost Partners LLC; James C. McCarroll, Reed Smith LLP