New York State Supreme Court Approves First Interim Cash Distribution of $167 Million to Investors in Former J. Ezra Merkin-Managed Ariel Fund Limited; Distribution is Made by Bart M. Schwartz, as Receiver, Before the Close of 2010

By Bart M. Schwartz, PRNE
Tuesday, January 4, 2011

NEW YORK, January 5, 2011 - 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 Limited - a private investment fund formerly run by J. Ezra Merkin that
is alleged to have secretly invested more than one-fourth of its assets with
Bernard L. Madoff Investment Securities - to distribute $167 million of cash
investment proceeds to investors who suffered losses through the fund.
Payments were sent to all investors in the fund for delivery in advance of
the 2010 year-end (with the exception of Mr. Merkin and his affiliates, whose
payments in respect of their investment holdings in the fund were withheld by
the Receiver pending final resolution of claims against Mr. Merkin,
including, among others, claims brought by the New York Attorney General, and
directly by the Receiver). Mr. Schwartz was appointed as Receiver by Justice
as a result of legal action by then Attorney General Andrew Cuomo.

When asked to comment on the first interim distribution, Mr. Schwartz
said, "I am very pleased with Justice Lowe's decision to allow us to make
this first interim distribution of cash to injured investors, and I am
delighted that we were able to get payments out for delivery before the close
of 2010. This is a complex matter, which required significant oversight and
direction from Justice Lowe and the Court-appointed Special Master, Leslie
, to protect the interests of all parties while helping the injured
investors." Mr. Schwartz went on to say that, "we will continue in our
efforts to maximize overall returns to investors, including through prudent,
value-preserving liquidation of the fund's roughly $500 million in estimated
value of remaining assets, and through pursuing additional recoveries from
culpable parties. In making this first interim distribution to investors, we
have made sure to maintain reserves sufficient to cover all of the fund's
operating needs going forward, as well as any reasonably foreseeable
potential liabilities to creditors."

Regarding prospects and timing for future interim distributions to
investors, Mr. Schwartz said, "We are making good progress in our value
realization efforts, and we are hopeful that we will be in a position to make
a further interim distribution of cash to the fund's investors during the
second or third quarter of 2011."

In describing the legal framework surrounding the first interim
distribution, the Receiver's counsel, James C. McCarroll of Reed Smith LLP,
said, "We are pleased to have played a role in achieving this very favorable
early-stage result for investors in the fund. To distribute cash to investors
in a Cayman-domiciled fund, through a New York State Court Receivership, with
multiple alleged creditor claims pending, required careful analysis and
structuring of the distribution plan. We look forward to the opportunity to
participate in further distributions to investors, as investment and claim
proceeds become available."

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

Questions or requests for copies of documents should be directed to Bart M. Schwartz, the Receiver, bschwartz at, +1-212-205-4190; or to the Receiver's legal counsel, James C. McCarroll, jmccarroll at, +1-212-549-0209.

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