Bankrupt former Seattle real-estate magnate Michael R. Mastro and his wife, Linda, have been released from a French jail after seven weeks behind bars.

A three-judge panel ordered their release Wednesday after a recent medical evaluation concluded their health was deteriorating in jail and they shouldn’t remain there, said Thomas Terrier, the couple’s French attorney.

The Mastros have surrendered their passports and will wear electronic monitors while they await proceedings over extradition to the U.S., he added.

They will reside in an apartment in the lakeside city of Annecy, in the French Alps, that they had agreed to lease before their arrests Oct. 24 in a nearby village, Terrier said.

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The Mastros will be free to walk around the historic city of 50,000 for much of the day, he said.

The couple disappeared in June 2011 after failing to comply with a Seattle bankruptcy judge’s order that they turn over two enormous diamond rings valued at $1.4 million. They were arrested 16 months later by French authorities at the FBI’s request.

A federal grand jury in Seattle has indicted them on 43 counts of bankruptcy fraud and money laundering.

James Rigby, the court-appointed trustee in Michael Mastro’s massive bankruptcy case, had argued the Mastros should remain in jail because they might disappear again.

“We have to respect the French legal system and let it run its course,” Rigby said Wednesday. “Hopefully [the Mastros] will be closely supervised.”

U.S. authorities have not yet filed a formal extradition request, but Rigby said they have until Dec. 26. “I’m sure the Department of Justice will not miss that deadline,” he said.

Now that the Mastros are free, the Justice Department has less leverage to strike a deal that might involve their return without formal extradition, said James Frush, Michael Mastro’s Seattle attorney.

He wouldn’t say whether such negotiations have been held. Experts have said that, even if U.S. authorities ultimately prevail, extradition proceedings could take a year or more if the Mastros exercise all potential appeals.

Michael Mastro, now 87, was a prolific real-estate developer and lender until the financial crisis undermined his empire and pushed him into involuntary bankruptcy. His debts to unsecured creditors have been estimated at $250 million.

Eric Pryne: or 206-464-2231