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The owners of the New York Mets have ended negotiations with hedge fund manager David Einhorn over a deal that would have given Einhorn a minority interest in the team in return for a $200 million investment.
The team is seeking to sell off a chunk of the team as it is projected to lose $80 million this year, has to repay a $30 million loan from Major League Baseball from 2010 and is faced with a $1 billion lawsuit from the trustee of the Bernard Madoff bankruptcy.
Mets co-owners Fred Wilpon and his brother-in-law, Saul Katz, are being sued amid claims from Madoff bankruptcy trustee Irving Picard that Wilpon and Katz knew their profits from Madoffs $50 billion Ponzi scheme were ill-gotten.
The co-owners claim they did not know Madoff was running a scam and say there were actually net losers from the scheme and not profiters, as Picard suggests.
The Mets were negotiating a deal with Einhorn that would have given him a 33 percent stake in the team in exchange for $200 million.
The deal would not have given Einhorn any control over operations of the team had it gone through.
Wilpon and Katz said last Thursday that they ended negotiations with Einhorn and will use other avenues to find minority partners for the Flushing franchise.
The co-owners also said their financial situation has improved and they are not in a rush to make a deal.
Ownership has provided additional capital to cover all 2011 losses and is moving forward with the necessary resources to continue to operate the franchise, the team said in a statement. Ownership will explore other strategic transactions and is under no financial pressure to do a deal on any particular schedule.
We are very confident in the teams plans both on and off the field, Wilpon said. We will engage with other individuals, some who have been previously vetted by Major League Baseball, along with other interested parties, regarding a potential minority investment into the franchise. My partners and I thank David for his interest in considering this opportunity and wish him well in the future.
Reach reporter Howard Koplowitz by e-mail at email@example.com or by phone at 718-260-4573.
©2011 Community Newspaper Group
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