Madoff Ponzi Scheme Endangers Mets Ownership
The aftermath of Bernie Madoff’s Ponzi scheme still rages on, taking its toll on unwitting investors. Mets owners, Fred Wilpon and Saul Katz, are defendants in a lawsuit brought by trustee Irving Picard on behalf of the Madoff bankruptcy case. Net winners are investors who profited from their Madoff investments, and as net winners, Wilpon and Katz are subject to returning money distributed as profits. Already struggling financially, the Mets owners face even greater financial straits based on the trustee’s claim against them.
Numerous cases emerged from the Ponzi scheme with New York business lawyers representing clients in creditor claims and others defending their clients’ rights against such accusations as willful blindness. While the trustee asserts that the Mets owners owe millions in fictitious profits, he also alleges willful blindness to evidence of Madoff’s fraud.
Details of the case against Mets owners Wilpon and Katz
The New York Times reports that the Mets owners countered the trustee’s claim for one billion dollars, of which $300 million were fictitious profits and $700 million more (the principal they invested) was based on willful blindness.
In an August hearing, Wilpon’s attorney requested that the District Court judge dismiss the entire lawsuit brought by the trustee. The judge did not determine a complete ruling, but he will render his decision on case dismissal by the end of September. The judge stated that the case belonged in the District Court, and did not refer it back to the bankruptcy court as he earlier was inclined to do. The judge also scheduled a trial in March, revealing his view that certain aspects of the case had merit.
The defendants’ attorneys previously entered an appeal to a federal appeals court in Manhattan where a panel of three judges determined that the claim was sound based on long-established bankruptcy rulings demanding returns of net winnings. Settlement vs. trial
As the Mets owners await the September ruling and upcoming March trial, they also have the option of negotiating a settlement with the bankruptcy trustee. They must weigh a potential billion-dollar judgment against a settlement upwards of $300 million and consider the fact that a settlement may allow them to retain ownership of the Mets baseball team.
An experienced New York business lawyer is invaluable for leveraging a favorable negotiation or defending a client’s rights at trial, especially in a case as complex as this one.