In all likelihood, Mr. Madoff was not running a pure Ponzi scheme, but had real assets.
Any tax on them increases the possibility that the scheme will not have sufficient assets to meet liabilities.
Among other things, schemes may be allowed to "smooth" the calculation they make of their assets and liabilities during scheme valuations this year, or later.
His whole world and that of his brother crashed down around them when their father died in November 1991 and it emerged that the company's debts vastly outweighed its assets and the pension scheme had been plundered.
Last year's actuarial valuation of the scheme in England and Wales showed that assets covered only 93% of liabilities.
It said if the out of town scheme was approved it would also sell its assets in the city including the Coppergate Centre.
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And the beauty of it is simple math embedded in the assets-under-management compensation scheme: The more money under management, the more money they make on a straight percentage.
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Thus, if a remedy is potentially available that would increase the amount of assets available of future distribution to scheme victims, the receiver or trustee has little choice but to proceed with that action.
Ministers hoped to raise the funds by selling off assets, but Mr Clegg added that the Treasury had underwritten the scheme to meet any shortfalls.
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Under the scheme, if a bank's capital falls below 8% of its risk assets, the recommended minimum for institutions doing business abroad, the state would either lend money to it, buy its shares - or nationalize it.
The Ministry of Justice also announced new measures on Tuesday to clamp down on criminals hiding their assets to qualify for legal aid under the "Crown Court means-testing scheme".
Under the new scheme it would, however, be possible for the lower test to be applied to freeze assets for a temporary period of 30 days.
"Fifty-seven other scheme users cannot meet the tax demand, even if they were to sell all of their assets including their family home, " Mr Huitson's barrister claimed, drawing on a small survey of the scheme's users.
On my calculations of the asset allocation in the Church of England Funded Pensions Scheme, 84% is held in shares, property and derivatives - or what are perceived to be riskier assets.
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