A Circuit Court judge on Friday cleared the way for the state to dispute money lost by victims of Bernard Madoff's ponzi scheme.
State Attorney General Eric Schneiderman brokered a $410 million settlement with fund manager J. Ezra Merkin two years ago.
According to the AG, Merkin had been funneling investors' money to Madoff''s fund, sometimes without their knowledge.
However, the trustee for Madoff's victims fund, Irving Picard, is suing to keep the state from giving out the money.
He cites bankruptcy laws, saying his case took priority.
A federal judge disagreed and ruled Schneiderman can begin paying the victims.