Tag:Wilpons and Madoff
Posted on: April 13, 2011 3:32 pm
 

Cohen in lead to acquire Mets' minority stake?

By Evan Brunell

CohenThe future minority owner is in a pool of three final candidates, as the New York Times reveals. Of the three still in contention, a billionaire hedge fund manager by the name of Steven Cohen may be the favorite. In fact, the Mets reportedly approached Cohen a year ago about taking a minority stake in the club. The club later denied this while Cohen gave mixed messages, but the message is clear on this one: Cohen is a finalist to assume a minority stake in the Mets, even if it surprises some close to Cohen who believe he isn't interested in a minority stake.

Cohen is the head of SAC Capital Advisors with a personal net worth of $8 billion, with the hedge fund responsible for $12 billion. That's a lot of moolah, and Cohen's come by that money impressively by performing returns of roughly 30 percent over the last two decades. Of course, the Mets know all too well about putting too much trust in a financier's impressive returns, but Cohen appears to be aboveboard even if two former portfolio managers at SAC are being accused of insider trading.

Cohen has a link to New York by donating $50 million to the North Shore-Long Island Jewish Health System, of which Mets president Saul Katz is a former chairman of and current executive committee member. Cohen's donation was to fund pediatric care.

He would certainly have to roughly quadruple that donation to grab a minority stake in the Mets. Again, it seems a surprise that Cohen is interested in such a stake, which means he must have been convinced that he can eventually assume control and/or has simply changed his mind. The Mets may be forced to open more stake in the team up as well as allow for bids on Sportsnet New York, the regional sports network that the Wilpons currently own 2/3s of. The Wilpons have told every bidder they will not be selling more than 49 percent of the club or any of the SNY stake for at least a year. Reading in between the lines, it appears that even the Wilpons are unsure if they can hang onto the club and need an extra year after being bailed out by the minority purchase to evaluate.

Cohen's competitors are a group led by Anthony Scaramucci -- founder of a hedge-fund firm -- and James McCann, the founder of 1-800-Flowers.com.

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Cohen image courtesy New York Times.

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

Wilpons trying to settle Madoff lawsuit

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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Category: MLB
Posted on: February 23, 2011 5:03 pm
Edited on: March 3, 2011 5:56 pm
 

Wilpons may sell more than 20-25 percent of Mets

In the latest report dealing with the Mets saga, the New York Times reports that the Mets are still weeks away from firming up a list of buyers to purchase 20-25 percent of the club.

However, many of the interested investors have stated that they want majority control of the team, not minority. Given the pending $1 billion lawsuit against the Wilpons by trustee Irving Picard, charged with recouping lost monies invested into disgraced Bernie Madoff's Ponzi scheme, many feel it is only a matter of time before the Wilpons are forced to sell majority share.

However, at least for now, the Wilpons are refusing to consider that option, but may be open to selling more than 20-25 percent of the team.

"Let’s just say that a noncontrolling stake could be north of 25 percent," Steve Greenberg, advising the Mets on the sale, said. Meanwhile, both the Mets, MLB and potential investors are keeping a tight lid on the whole process.

"This is one case where there is an even greater interest in keeping this confidential,” said Marc Ganis, a sports-industry consultant, "because people don’t even know what the ultimate deal will be, much less the people involved, and there’s a major legal proceeding going on."

There's certainly no chance of a new minority investor being in place by Opening Day. This is one saga that will continue to drag on.

-- Evan Brunell

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Category: MLB
Posted on: February 21, 2011 3:47 pm
Edited on: March 3, 2011 5:56 pm
 

Report: Wilpons 'pathway' for Madoff investors

Koufax, Wilpon The Bernie Madoff saga just won't die, as more information continues to come out on how owner Fred Wilpon, son and COO Jeff Wilpon and president Saul Katz conducted business with the disgraced Ponzi king.

In a New York Times piece, it is revealed that those who invested through the Wilpons with Madoff were not allowed to speak to Madoff whatsoever. Everything was handled through the Wilpons' family company of Sterling Equities, as requested by Madoff. In fact, money would not be sent to Madoff directly; rather, it would be paid to Sterling, who would then pay Madoff through Sterling partner and Mets board member Arthur Friedman, who is a public accountant with a law degree.

Overall, Friedman oversaw 178 Madoff accounts opened for friends business acquaintances and Sterling employees while also having a hand in 305 other accounts set up by Sterling partners for personal use. Friedman would be in regular contact with Madoff's firm weekly, even daily, dealing with Frank DiPascali who has pleaded guilty to assisting with Madoff's fraud.

The Wilpons may have believed they were doing these friends and employees a favor, as someone with Madoff accounts through Sterling told the Times .

"You could not get [a Madoff account] any other way," he said. "Sterling was the pathway in."

Another Sterling employee, David Diamond, confirmed that the Wilpons were extremely high on Madoff and was considered to be a "miracle worker."

"The employees at Sterling, based on their net worth and their income, would never have had access to Bernie on their own," Diamond said. "It was made clear to the employees that because of Sterling’s relationship with Madoff, they were giving us a special consideration."

Those considerations ended up burning the investors.

"We never questioned the fact we weren’t allowed to contact Madoff because of our confidence in Sterling," a woman with Madoff accounts said. "We invested because we trusted these two people absolutely; because they were big business and we assumed they knew what they were talking about."

The Wilpons didn't do wholesale recruiting, however. You had to build up a good relationship with the Wilpons and have the opportunity offered to you. The lawsuit filed by the trustee attempting to reclaim monies lost from investors alleges that "far more outsiders were turned down than actually got into the elite pool of Madoff investors through Sterling."

Despite warnings from many accountants, however, clients jumped at the chance to invest with Madoff -- a problem that plagued nearly everyone associated with Madoff from banks to financial institutions. As long as Madoff was performing, it was OK.

Larry King, the longtime CNN host, was another victim of the Madoff scheme with ties to the Wilpons along with Sandy Koufax, the Dodgers great pictured in the photo (left) with Fred Wilpon. King attended high school with Fred and said he believes the Wilpons were simply offering them a chance to invest with someone who had proven high returns.

"I still love Freddie," King said. "If you look up ‘mensch’ in the dictionary, you will see Freddie’s picture."

-- Evan Brunell

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Category: MLB
Posted on: February 1, 2011 10:33 am
Edited on: March 3, 2011 5:57 pm
 

As the Mets turn: Ownership soap opera continues

Wilpons You take a baseball team and one of the biggest financial schemes in history and you've all of a sudden got backpage headlines -- add the Mets' recent struggles and the son of an American hero, and you've got gold.

In short, there's a lot more going on with the Mets other than who is leading off this season.

Last week it was revealed that Fred and Jeff Wilpon (left) have said they're look to sell as much as 25 percent of their stake in the team, and the fallout has been tabloid fodder.

So here's a sampling of what's going on:

Newsday reports Bud Selig will meet with the team's owners, the Wilpon family, when he is in New York City this week. The commissioner refused comment on the Wilpons' financial state.

• The reports that Martin Luther King III is looking to buy the Mets have been exaggerated, King told the Atlanta Journal Constitution .

"Larry [Meli] gave a lot of information that led to the impression that I was leading an effort [to buy the Mets]," King told the newspaper. "First, that is not accurate. What is accurate is that there has been a discussion. But there is no deal on the table and I am not leading an effort."

King said he was still in the "exploratory phase."

• New Mets general manager Sandy Alderson said the team will look to lower payroll in the future, but it has nothing to do with ownership. The team will go into this season with a payroll anywhere from $140-$150 million.

"I think that is significantly higher than we'd like to be on an annual basis," Alderson said on a conference call on Tuesday (via the New York Post ). "That's a product of adding some additional players that we felt the roster needed as well as some existing [contracts]. The plan and the approach that I've taken over the last two months has not been affect at all by any other outside factors."

• Alderson said he's still confident he can do the job he wants to do under the Wilpon's.

"You're right to say some circumstances have changed, but would it have changed my decision? I don't think so," Alderson said (via the New York Daily News ). "I'm not surprised by this development just because the Madoff situation was a backdrop to the Mets, a well-known backdrop. My enthusiasm and energy for this position and my confidence in the Mets is undiminished."

-- C. Trent Rosecrans

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Posted on: January 28, 2011 1:00 pm
Edited on: March 3, 2011 5:57 pm
 

Mets owners seeking to sell share of team

Wilpons The owners of the Mets, Fred (on the right in the photo) and Jeff (left) Wilpon, issued a statement Friday announcing that they are seeking to sell a minority share of the team.

In the statement, the Wilpons acknowledge they are part of a lawsuit brought against them by the trustee of the Bernie Madoff bankruptcy. The Wilpons had a significant amount of money invested with Madoff, and despite claims that they would be able to run the baseball team with no impact from the Madoff swindling, the evidence over the last few years has mounted that the Wilpons did, in fact, get too much of their savings wiped out. While most of their payroll is taken up by aging and/or broken-down players, the fact remains that New York has added just $7 million in payroll this offseason.

The Wilpons are considering allowing others to buy a minority stake in the Mets "to address the air of uncertainty created by this lawsuit, and to provide additional assurance that the New York Mets will continue to have the necessary resources to fully compete and win."

The Wilpons made it clear that they will remain the majority partners, but that could just as easily mean a 51 percent share. However unlikely, if someone bought in for 49 percent, it would bring in what appears to be a very needed infusion of cash.

And yet, it is going to be very difficult for the Wilpons to convince an investor to fork over millions -- if not hundreds of millions -- of dollars for a share and not get any interest at all. It would be far easier for the Wilpons to sell the Mets outright, or sell the majority of the team. In fact, most compelling offers will likely attempt to buy a majority of the club.

And there will be no shortage of interested investors, given the Mets' presence in New York City.

UPDATE: Tyler Kepner of the New York Times reports that Fred Wilpon plans to sell 20-25 percent of the team.

-- Evan Brunell

UPDATE: A source tells the Times (registration required) the lawsuit is seeking as much as a billion (yes, with a B) dollars from the Wilpons, citing their conduct in the Madoff scheme and the fact that they are considered "net winners" in the deal. I don't have access to their bank statements, but I've got to think that could force them to sell the Mets entirely.

-- David Andriesen

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Category: MLB
 
 
 
 
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