A Manhattan federal judge on Tuesday blocked an attempt by the trustee of the Bernie Madoff fund to claw back, ahead of trial, $86 million in allegedly fraudulent transfers an investor had received as part of Madoff's Ponzi scheme.

U.S. Bankruptcy Judge Stuart M. Bernstein of the Southern District of New York nixed trustee Irving H. Picard's motion for summary judgment on his fraudulent transfer claim to recover transfers from Legacy Capital Ltd.'s account with Bernard L. Madoff Investment Securities that were made within two years of its founder being arrested for securities fraud in 2008.

In the ruling, Bernstein said that Picard was entitled to go after the funds because the transactions were clearly part of Madoff's $65 billion Ponzi scheme, considered the largest and longest-running in U.S. history.

However, Bernstein said, important questions remained as to Legacy's defense that it had taken the transfers “for value and good faith.”

“The Trustee has shown that there is no genuine material issue of fact regarding his prima facie case and those facts are deemed established for the purposes of this adversary proceeding. The Trustee's motion for summary judgment is otherwise denied,” he wrote in a 30-page decision.

Tuesday's ruling followed Bernstein's dismissal in 2016 of the bulk of the trustee's $220 million clawback suit against the British Virgin Islands-based investment vehicle and Khronos LLC, which had provided it accounting services. The earlier ruling dismissed all claims against Khronos, and found that Picard could not argue Legacy acted in bad faith because the company didn't have actual knowledge that Madoff was not trading in real securities.

As to value, Bernstein said on Tuesday that differences over the Ponzi scheme's start date and U.S. Treasury bills that Madoff had bought and resold to his customers would have to be resolved on a fuller record at trial.

“These discrepancies and the relationship, if any, between BLMIS's purchase of T-Bills from brokers and the apparent resale of a portion of those purchases to customers like Legacy raise factual issues that the Court cannot resolve on this motion,” Bernstein said.

The trustee's office declined to comment on Tuesday. An attorney for Legacy did not respond to a request for comment.

Madoff pleaded guilty in 2009 to charges of securities fraud, investment adviser fraud, mail fraud, wire fraud, money laundering, making false statements, perjury, making false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan. He was sentenced later that year to 150 years in prison.

Picard, a Baker & Hostetler partner, was appointed in 2008 under the Securities Investor Protection Act to serve as trustee for the liquidation of BLMIS. According to the Madoff Trustee Initiative, recoveries and settlements in the case totaled more than $13.4 billion as of June 21.

Picard, as trustee, is represented by David J. Sheehan, Oren J. Warshavsky and Jason S. Oliver of Baker & Hostetler.

Legacy is represented by Nicholas F. Kajon of Stevens & Lee.