Blog Entry

Wilpons trying to settle Madoff lawsuit

Posted on: March 3, 2011 5:59 pm
Edited on: March 3, 2011 7:21 pm
 

By Evan Brunell

The Wilpons are nearing the next stage in the Madoff saga, with a March 18 deadline for the Mets owners to reach a settlement with trustee Irving Picard, charged with recouping losses from those who invested with Madoff and lost as the Wall Street Journal reports. The Wilpons claim they have been injured by the Madoff scam, but Picard is contending they do not have rights to ficticious profits and believe them to be "net winners." The Wilpons hauled in $300 million of false profits, and Picard is also seeking $700 million as a penalty, alleging the Wilpons willingly turned a blind eye to the Ponzi scheme.

While any settlement certainly is not likely to be $1 billion as termed in the lawsuit, the two sides may not be able to come to an accord even as the Wilpons scramble to find a minority investor that can shore up team losses and outstanding debts that would free up the Wilpons' ability to pay Picard whatever amount is decided upon y using their business assets outside of baseball. Over the next two weeks, MLB should approve around 14 bidders to win a stake of the Mets.

If no agreement comes by March 18, the Wilpons have been informed Picard will add more allegations to the lawsuit dealing with investments by the Wilpons and associates at Sterling Equities Associates, the owners' real-estate firm. Ex-New York governor Mario Cuomo is attempting to mediate the case.

"What the judge has asked and what the judge asks of all mediators is that you seek to create a solution that saves time, saves money and shortens or does away with litigation," Cuomo told the Journal. "That's what we'll try to do—that's the objective. The job of the mediator is to either find the road or make the road."

The Wilpons were set back on Thursday when a three-judge panel said they do not think the Wilpons should be allowed to keep $500 million in ficticious profits as the New York Post reports.

The Wilpons have contended they should be owed the monies as that is what was reflected on statements at the time Madoff's Ponzi scheme fell apart.

"From the investors’ perspective, the funds weren’t fictitious. ... All the law says is that they were entitled to rely on the statements,"  attorney Karen Wagner told the federal appeals court.

But judge Dennis Jacobs of the 2nd U.S. Circuit Court of Appeald disagreed, wondering if Picard should be making decisions according to "whatever amount Madoff made up while chewing on his pencil and looking at the ceiling."

Another judge, Pierre Leval, called figures on the statements as "figments of the imagination," something trustee lawyer David Sheehan wholeheartedly endorsed. "Who in their right mind would rely on the statements?" he said, telling the panel the Wilpons are not entitled to phony profits, only what they had poured into the accounts. "All that’s owed is what was put in," he said, calling the situation a "zero-sum game."

The panel ruled that victims only have rights to the principal amount of money invested as Madoff never actually did anything with the money. They will later rule on a legal challenge in bankruptcy court in whether the Wilpons, along with others who withdrew ficticious profits, should be forced to return these profits. 

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Comments

Since: Dec 19, 2010
Posted on: March 4, 2011 1:13 pm
 

Wilpons trying to settle Madoff lawsuit

I dont understand  why people are so confused here.  It's simple math. The wilpons put in roughly 500 million and withdrew 800 million. So they received 300 million in stolen property. They have to return that 300 million. I'm basing my numbers on what's been reported, but rounded them to whole numbers to make it easier to digest.

My assumption as well as prediction here is that the Wilpons currently don't have the liquidity to return the 300 million which is why they are stalling. They will sell a share of the Mets and then settle out of court with Picard as most net winners have been doing.




Since: Jun 29, 2010
Posted on: March 4, 2011 1:06 pm
 

Wilpons trying to settle Madoff lawsuit

Shame on the Wilpon's for even trying to keep a "profit" from this whole mess.  Give the money back and, more importantly, please sell the Mets to someone who knows how to run a baseball team.



Since: Sep 11, 2008
Posted on: March 4, 2011 12:48 pm
 

Wilpons trying to settle Madoff lawsuit

Can't figure out WHY you were arrested for a taking a picture???  Please explain...



Since: Apr 22, 2009
Posted on: March 4, 2011 12:27 pm
 

Wilpons trying to settle Madoff lawsuit

Wlipons knew it was a scam, that is why they took their money out. 



Since: Mar 4, 2011
Posted on: March 4, 2011 11:44 am
 

Wilpons trying to settle Madoff lawsuit

jokest5894 - The SEC had been warnes years prior to the collapse of the Ponzi scheme.  Harry Markopolous had warned them time and time again that Madoff was either front running or running a Ponzi scheme.  There is no such thing as an investment that NEVER has a down year.  Are the Wilpon's guilty, I'd say they were extremely naive.  



Since: Aug 11, 2007
Posted on: March 4, 2011 10:56 am
 

Wilpons trying to settle Madoff lawsuit

Worldbme - Your entitled to your opinion about weather the Wilpons are good owners or not but I find you very Ill informed. The returns never show more than 12% up for a given year. The problem was they never had a down year and there are legit shops to never had a down year over the last 10 yrs either. And the last 10 years are what investors call the lost decade do to no returns... My final thought on this and what I believe to be the million dollar question for those of you who think the Wilpons knew was why didn't they pull all their money out once they knew there was no investment? And 2nd the SEC didn't even no and thats their job to know. If you can provide a legit answer to either of these questions then you may have a case.



Since: Jan 21, 2008
Posted on: March 4, 2011 10:01 am
 

Wilpons trying to settle Madoff lawsuit

So pretty much the Mets are a victim of the Bernie Madoff ponzi scheme. I too was a victim of the Mets and Jeff Wilpon. I hope Jeff loses every penny his Dad earned. Lets see him make some money on his own, yeah right. I'm still a Mets fan, since 1967, but shouldn't be and still a season ticket holder since 1997. But honestly karma is a bitch. In March of 2009 I spent over $65,000 on season tickets, more than double what I spent the following season at Shea, which was also too high. I was so worried about the resale market that I went into Citifield, and while there where plenty of people in there I took pictures from my NEW expensive seats. What happened next was utterly uncalled for. One of the Mets employee's had me arrested even after calling Jeff Wilpon and my season ticket rep. My season ticket rep helped me all he could by calling his boss but Jeff, who's office is in the same building I once worked at 111 Great Neck Rd, still said arrest me anyway. I spent the full day in jail and then got transferred to Queens Blvd for the night. They lost my paperwork so I sat in the holding cell all night long. Felon's got to the next cells faster than I did. I have high blood pressure, diabetes and am on heart medication and they (Police) told me not to go to the hospital because it would hold me up on getting out. I sat in that holding cell till 11 AM the next morning while others we're in and out like clockwork. This was the worst night of my life thanks to Jeff. I hope that Jeff losses everything he's got because he's a spoiled rotten bastard. I should sue the Mets for what they put me thru that day and night....




Since: Feb 16, 2009
Posted on: March 4, 2011 9:41 am
 

Wilpons trying to settle Madoff lawsuit

Maybe Newt could help out with the 10 million he got from Madoff!




Since: Jan 27, 2008
Posted on: March 4, 2011 8:44 am
 

Wilpons trying to settle Madoff lawsuit




Since: Mar 4, 2011
Posted on: March 4, 2011 8:35 am
 

Wilpons trying to settle Madoff lawsuit

Speaking of ill-gotten gains, I read a very good interview with Sandy Koufax.  He too invested with Madoff, to a much lesser degree, but you haven't heard his name in all of this.  He too is a good friend of the Wilpons.  He made a very strong, valid point. 

The profits made from investments are taxable by the IRS and the state.  Just for and example, if you use the $300 million of profit that has been used as the number that the Wilpons gained, and they paid 15% capital gains tax, then the government was paid $45 million with "ill gotten gains."  Is the trustee going after the IRS for their gains?  With the money the IRS collected from all of the investors who made money, there could be way more than the $300 million or even the $1billion that Picard is hounding the Wilpons for.



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