Madoff Trustee Seeks Sale of Manhattan Condo to Compensate Victims

NEW YORK The estate of Bernie Madoff is moving to recover assets from a prominent New York couple tied to a Greenwich Village condo that was created by joining three separate units. Irving Picard, the court-appointed trustee charged with reclaiming losses for Bernard Madoff’s victims, has asked a state court to force the divvying and sale of two of the condo’s three units to help satisfy a 2022 judgment against Malcolm Sage and Lynne Florio.

Picard’s filing targets two units at 45 Christopher Street, 14B and 14C, totaling about 2,112 square feet. The trustee argues that selling those units would convert roughly two thirds of the property's 3,000-square-foot footprint into cash, leaving Sage and Florio with a 930-square-foot, one-bedroom unit on the 14th floor. The petition says the two seized apartments are worth about $4.6 million and remain legally distinct with their own block and lot numbers, making them subject to attachment under the judgment.

An April 2022 New York state court ruling found Sage to be a rare net winner in the Madoff affair, having earned about $16.9 million in profits tied to the fund. Picard has argued that individuals who withdrew more than they deposited must return the difference, and the new filing seeks to enforce that ruling against Sage and Florio.

The three-unit Greenwich Village condo began as separate apartments that were joined in the 1990s to form a roughly 3,000-square-foot residence. Sage and Florio insist the units cannot be physically divided, arguing that 14B and 14C would not be feasible to carve out without destroying the structure. In court filings they said the suggestion of splitting the property makes no sense because the units were not designed to be separated and that selling them would amount to a forced relocation of their home. Picard’s team has pushed back, with attorney Ariel Berschadsky calling the couple’s argument ludicrous and noting that condominium developers frequently detach and reconsolidate units.

Sage and Florio, once part of New York’s social circuit and photographed at the American Ballet Theatre gala in 2007, are representing themselves in the matter. The two have denied profiting from Madoff’s scheme and have asserted that all Madoff victims were net losers who should not have to surrender their assets. In July they wrote to Baker Hostetler, Picard’s law firm, disputing the claims and asserting that the case was being used to capitalize on the suffering of others.

Picard’s office did not respond to requests for comment. The case marks one of the latest attempts by the trustee to claw back assets tied to Madoff’s 2008 collapse, which left thousands of investors, including celebrities and philanthropies, with losses that officer later sought to recover through court-ordered settlements and asset seizures. Picard’s team has highlighted that, since the scheme’s unraveling, he has sought to recover roughly $15 billion against an estimated $18 billion principal loss.

The Madoff affair, which began to unravel in December 2008 amid a liquidity crisis that exposed a Ponzi-style operation, remains a touchstone in Wall Street’s handling of fraud and trustee recoveries. Bernard L. Madoff Investment Securities once stood as a dominant market-maker on the Street before regulators uncovered the fraud. Madoff died in prison in 2021 after being sentenced to 150 years.

The 45 Christopher Street building has long been described as one of Manhattan’s sought-after addresses, a factor that underscored the stakes in Picard’s attempt to liquidate portions of Sage and Florio’s residence. The case continues to unfold as the court weighs whether two separate units can be severed from a larger condo without violating property rights or undermining the judgment against the couple.

Meanwhile, Sage’s family has a separate history with the trustee. Sage’s brother Martin and sister-in-law settled a related clawback dispute for $4.5 million in September, while Sage’s sister Ann Passer was named in similar allegations and agreed to an undisclosed settlement last year. Picard’s firm, Baker Hostetler, has not disclosed all terms of those settlements.

As the dispute plays out in New York courts, it highlights the ongoing challenge of translating court judgments into real-world asset recoveries, particularly when prized urban real estate is involved. The Greenwich Village condo, with its storied address and high value, represents a potential lighthouse for future asset-recovery efforts within the Madoff estate. The outcome of the case could influence how future net-winner and net-losers disputes are handled when real estate holdings are involved.