UPDATE 1-Investors press ahead for Madoff's personal assets

* Investors eye claims on Madoff personal assets

* Will ask for a 2nd trustee in effort to recover money
(Adds details on trustee, lawyer's comment, byline)

By Grant McCool

NEW YORK, April 13 (Reuters) - In a move to ensure that all
of jailed swindler Bernard Madoff's personal wealth is used to
pay his defrauded customers, some investors filed court papers
on Monday to force him into bankruptcy.

Their lawyers have argued that making Madoff bankrupt would
make it easier for victims to recover any Madoff-linked assets
that have been transferred to family members or third parties.

The next step will be another petition to the court for the
appointment of a trustee to oversee the personal assets of
Madoff, who pleaded guilty on March 12 to running a $65 billion
fraud over 20 years, bilking thousands of customers from big
banks to charities to small investors.

A trustee is already working to oversee the winding down and
recovery of assets from Madoff's firm to distribute the proceeds
to former customers.

Madoff and his outside accountant are the only people
charged in the case, but U.S. prosecutors are investigating who
else might have been involved in the biggest fraud in Wall
Street history. Madoff is in jail pending sentencing in June.

Monday's filing in U.S. Bankruptcy Court in New York was
made on behalf of five investors claiming $64 million, according
to court papers. A federal judge last week opened the door for
the petition by reversing his December ruling preventing any
such legal action.

The U.S. Securities and Exchange Commission, U.S.
prosecutors and the court-appointed trustee winding down the
brokerage firm objected to the efforts of these investors.

They argued that it would lead to unnecessarily high
administrative costs and confusion. The SEC said authorities
already are working to ensure that proceeds of any Madoff assets
they recover will be distributed to bilked customers.

A lawyer for the five investors said he wanted to try to
make sure no assets slip through the process.

"The two trustees will sit down and work out a protocol,"
said the lawyer, Jonathan Landers. "We trust they will
cooperate."

On March 17, U.S. prosecutors signaled their intent to ask
for $31.5 million from loans to Madoff's sons and $2.6 million
worth of his wife Ruth's jewelry [ID: nN17299548]. An earlier
filing sought that Madoff and his wife forfeit more than $100
million worth of homes, cars, boats, securities and valuables,
some of which have already been seized by U.S. authorities.

The cases are In Re: Bernard L. Madoff 09-11893 U.S.
Bankruptcy Court for the Southern District of New York
(Manhattan);

Securities and Exchange Commission v. Madoff et al 08-10791
in U.S. District Court for the Southern District of New York
(Reporting by Grant McCool, editing by Maureen Bavdek and
Matthew Lewis)