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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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Since: Dec 21, 2008
Posted on: March 4, 2011 8:34 am

Wilpons trying to settle Madoff lawsuit

The Wilpons shouldn't be allowed to keep the METS!

Please sell them so we can get an owner that wants to win and spend money on quality players!!!!!!


Since: Jan 2, 2007
Posted on: March 4, 2011 7:45 am

Wilpons trying to settle Madoff lawsuit

Frappe, if you took the time to notice, lawyers working with Picard leaked information from a sealed indictment.  That didn't come from the Wilpons.  It's ended up with both sides asking the courts to unseal the indictment so all the cards can be laid out on the table for mediation.  Picard's legal team hasn't even shared the results of his discovery with the Wilpon's legal team.  I would dare say that leaking information from a sealed indictment is trying to go after someone in the public arena and not the courtroom.

In addition, Picard is trying to change legal precedents by asking the courts to ignore financial statements received by all investors in the Madoff scheme.  In the past courts and the SEC ruled money recovery efforts were to be based on the last set of financials issued to all parties involved.  Picard wants to ignore those and base his recovery efforts simply on how much was put in and/or taken out by any investors.  While I agree that's more sensible than previous legal rulings, then why don't the Wilpons get credit for the $500 million they still had invested with Madoff at the time everything blew up and the scheme was uncovered?  If they knew this was a scam, the way Picard has accused them in his filings, then why didn't they remove their $500 million beforehand?  That's not chump change in any financial arena.  Even if the Wilpons knew Madoff was a phony, they weren't going to risk losing half a billion dollars after only making profits of $300 million as they're accused of doing by Picard.  By that standard, they were still in the hole to the tune of $200 million.

Since: Jul 17, 2008
Posted on: March 4, 2011 7:37 am

Wilpons trying to settle Madoff lawsuit

The wilpons are crooks, liars, and thieves. Just association alone with Madoff(good friends) makes him guilty as hell. And they probably knew this was a scam with fruadulent means. You just dont invest that kind of dough without some inside help. And the returns? What were they like 600% on the dollar? Who is kidding who. No one should be backing the Wilpons. As for filling body bags, the Wilpons will fit nicely in them.

Since: Jan 11, 2007
Posted on: March 4, 2011 5:16 am

Wilpons trying to settle Madoff lawsuit

I agree. There is no way the Wilpons will have to pay back money they withdrew, but they probably will not see the fake profits they were told exsisted. 

Since: Jan 11, 2007
Posted on: March 4, 2011 5:15 am

Wilpons trying to settle Madoff lawsuit

I agree. There is no way the Wilpons will have to pay back money they withdrew, but they probably will not see the fake profits they were told exsisted. 

Since: Feb 14, 2008
Posted on: March 4, 2011 12:52 am

Wilpons trying to settle Madoff lawsuit

Picard has no business going public the way he has demanding a penalty of $700 million on claims the Wilpons profited to the tune of $300 million.  He is trying to convict the Wilpons in the court of public opinion and shame them into what could equate to them losing their family fortune to pay off assumed profits.
What does that even mean? Picard isn't trying the case in the court of public opinion. He filed a lawsuit to get the money, and lawsuits are public. That's the way it works in the U.S. Are you suggesting that he shouldn't have filed the lawsuit? Picard has reached agreements with other beneficiaries of the scheme to recover $10B. Why weren't they tried in a court of public opinion? Simple - they weren't tried at all. They returned the money without having a formal lawsuit slapped on them. Rather than badmouthing Picard, it would probably behoove people to look up all of the existing facts, rather than spouting off simply based on what they read on a sports website. As for what the Wilpons put in and took out, that is in the lawsuit. Are you suggesting that he should air more of the Wilpon's financials publicly, then you would have sympathy? An odd stance given your view that it shouldn't be in the public view at all...

Picard is doing exactly what he was tasked to do. The fact that he is not spending his the bulk of his time explaining it to sports fans is not really that surprising.

Since: Feb 14, 2008
Posted on: March 4, 2011 12:41 am

Wilpons trying to settle Madoff lawsuit

It seems like Picard is trying to get back all the money Madoff stole/made up in one fell swoop from the Wilpons
I don't see how $300M, or even $1B with the penalty, is going to make up the $18B that Madoff supposedly lost. The $700M penalty is just to encourage the Wilpon's to pay rather than go to court. If their choice is pay $300m or go to court to possibly lose $300M, they go to court. If their choice is pay $300M or go to court and possibly pay $1B, they may make a different choice.

Since: Feb 14, 2008
Posted on: March 4, 2011 12:36 am

Wilpons trying to settle Madoff lawsuit

Isn't America great. This is the only country in the world where people who have lost money are punished even further with frivolous lawsuits.
America is great. They are being sued because they didn't lose any money, they made a boatload. They took out huge amounts more money than they put in. What they "lost" is the additional fake profit that Madoff was claiming. However, he never made that money, so neither did they.

Since: Sep 8, 2006
Posted on: March 4, 2011 12:34 am

Wilpons trying to settle Madoff lawsuit

Does anyone really think the Wilpons did not know anything?...they WIN their 2nd ponzi scam...a scam in which 98% of everyone loses....they invest $500 million or so....and have no idea?.....STOP.....they simply thought they would not get caught.  I have been and an still huge mets fan since 1968...but grow up......cheated got caught

Since: Dec 19, 2010
Posted on: March 4, 2011 12:31 am

Wilpons trying to settle Madoff lawsuit

The Wilpons and others are being sued for the "profits" they made. If the Wilpons invested 500 million and in turn withdrew 800 million they are legally obligated to return the 300 million. That's the simple version of what's going on here. There were a lot of net winners in this ordeal and many of them returned the money without a fight when Picard came calling.

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