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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Since: Nov 26, 2006
Posted on: March 4, 2011 12:05 am

Wilpons trying to settle Madoff lawsuit

The trustee should not be suing the Mets owners because by law they only have the right to recoup only that which they invested and nothing more
Actually, trustees can prevail if they can prove the defendants received ill-gotten gains. These "clawback" awards are relatively common in this type of lawsuit. Any monies that the Wilpons received from Madoff are eligible if they were from a timeframe that it was proven Madoff was defrauding investors.

Since: Aug 18, 2006
Posted on: March 3, 2011 11:08 pm

Wilpons trying to settle Madoff lawsuit

This guy is as big of a dirtbag lawyer you can find. Irving Picard should really shut his mouth and back off some. We're talking about a lot of money here at stake and to come on as aggressive as he is and making unreasonable demands, it would not surprise me if Picard was found in a body bag at some point during or after the trial.

Since: Aug 7, 2008
Posted on: March 3, 2011 9:48 pm

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. The trustee that is suing the Wilpons should be suing the US government because Bernie Madoff said "The US government is the biggest Ponzi Scheme.....if there ever was one". I fail to see Madoff's point but to each his own. The trustee should not be suing the Mets owners because by law they only have the right to recoup only that which they invested and nothing more. So unless the Wilpons invested portions of the Mets I fail to see how anyone can say "giddy up cowboy...make way for the gravy train. Let's sue the Wilpons".

Since: Jan 4, 2009
Posted on: March 3, 2011 7:16 pm

Wilpons trying to settle Madoff lawsuit

hauled in an entire $300 dollars of profits huh. thats not even enough to buy me a new computer.

Since: Aug 4, 2009
Posted on: March 3, 2011 7:09 pm

Wilpons trying to settle Madoff lawsuit

Well said. It seems like Picard is trying to get back all the money Madoff stole/made up in one fell swoop from the Wilpons. He definitely needs to be quiet about this business and handle it in the courtroom and mediation chambers not the NY Post or Daily News. It's starting to make me wonder what his real motivation is, justice or a stepping stone to some greater political aspiration?

Since: Mar 6, 2009
Posted on: March 3, 2011 7:08 pm

Wilpons trying to settle Madoff lawsuit

I have a feeling the Wilpons are gonna win the case.

Since: Jan 2, 2007
Posted on: March 3, 2011 6:29 pm

Wilpons trying to settle Madoff lawsuit

The way trustee Irving Picard is gonig about his business is as disgusting as the way Bernie Madoff played his "investors."  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.

If Picard had any class, he'd keep his mouth shut publicly.  This whole episode reeks of the way Ken Starr went after Bill Clinton publicly back during the whole Lewinsky affair.  The underlying events were all wrong, but they didn't need to be aired outside of the courtroom or Congressional setting when people would have been under oath.  Picard needs to back off and deal with this behind closed doors.  Surely the Wilpons are not the only people who allegedly made money with Madoff-- why aren't they being publicly prosecuted?  By most reports, Madoff shuffled Billions of dollars around on paper.  The Wilpons only appear to have played a part in a single billion-- what about all the others?

In addition, if Picard was on the up-and-up he should release exactly how much money the Wilpons invested with Madoff and exactly how much was paid back to them.  Be honest and above reproach.  Show us the numbers and then you'll be far more likely to get the sympathy or support you're obviously hustling the media to get.  Otherwise, shut your hole, Irving Picard.  We don't need to hear another thing out of you.

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