N.Y.judge restrains Merkin funds in Madoff lawsuit

NEW YORK (Reuters) - A judge extended an order on Tuesday barring hedge fund founder Ezra Merkin from shutting down funds that had invested with accused swindler Bernard Madoff or withdrawing money from them.

New York State Supreme Court Justice Richard Lowe issued the extension in a lawsuit brought on December 23 by New York University, which says it lost $24 million when funds run by Merkin invested money with Madoff without its consent.

Another judge issued the initial order on December 24 to stop Merkin from liquidating Ariel Fund Ltd, named in the lawsuit by the university along with Merkin and his Gabriel Capital Corp.

The initial order expired on Tuesday.

Madoff, an investment adviser, is accused of running a $50 billion securities fraud over many years.

"Until December 12, 2008, we had no knowledge that NYU's funds were instead being managed by Bernard Madoff," said an affidavit filed with the court by NYU chief investment officer Maurice Maertens.

"None of the documents we received throughout the years from Gabriel or Ariel ever stated that Mr Madoff was managing NYU's assets."

Merkin's lawyer, Andrew Levander, said in a statement that his client "has always acted in good faith and did not deceive NYU or any other investors."

Merkin's personal losses from the purported fraud "are in the many tens of millions of dollars...He shares the sorrow of all investors who have been cheated by Madoff," the statement said.