U.S. authorities are opposing an effort to force Bernard Madoff into involuntary bankruptcy, a move some bilked clients contend would help ensure the confessed swindler's personal assets will be used to compensate his victims.

Last week, a lawyer for Madoff investors asked the court permission to push the jailed money manager into bankruptcy, arguing that this would make it easier for victims to recover any Madoff-linked assets that have been transferred to family members or third parties.

But in response, The U.S. Securities and Exchange Commission and the U.S. Attorney's Office in Manhattan said on Wednesday they already are working to ensure that proceeds of any Madoff assets they recover will be distributed to victims.

This office fully intends to secure the maximum recovery for victims of the Madoff fraud by distributing forfeited property back to those victims, the U.S. Attorney's Office said in court papers.

A court-appointed trustee is winding down Madoff's brokerage firm in U.S. Bankruptcy Court to find assets to sell, money that will be returned to thousands of Madoff's former customers.

Also, the U.S. Attorney's Office, part of the Department of Justice, is seeking forfeiture of Madoff's personal assets which include a waterfront home in Palm Beach, Florida, and three boats seized by authorities last week.

In the SEC's view, the DOJ's forfeiture powers render any perceived bankruptcy benefit illusory, SEC lawyers wrote in their own court filing. In fact, a bankruptcy filing is likely to lead to unnecessarily high administrative costs and confusion without any apparent benefits.

The papers were filed in the SEC's civil case against Madoff in U.S. District Court in Manhattan.

Madoff pleaded guilty on March 12 to running Wall Street's biggest investment fraud and is now in jail. He could be ordered to prison for the rest of his life at his sentencing, scheduled for June.

The cases are Securities and Exchange Commission v. Madoff et al 08-10791 in U.S. District Court for the Southern District of New York (Manhattan) and Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC 08-01789 in U.S. Bankruptcy Court for the Southern District of New York.

(Reporting by Martha Graybow; Editing by Steve Orlofsky, Bernard Orr)