In a setback to the trustee trying to recover funds for victims of Bernard Madoff’s $50 billion Ponzi scheme, a Manhattan federal judge ruled the trustee can only sue the owners of the New York Mets for up to $386 million, not the $1 billion he was seeking.
Irving Picard, the trustee of Madoff’s bankruptcy, alleges that the owners of the Flushing franchise knew or should have known that Madoff was running a Ponzi scheme and originally sought $1 billion from the owners — $300 million in alleged “phony profits” and the $700 million the owners invested with Madoff.
Manhattan Federal Judge Jed Rakoff ruled last week that Picard can only go after funds invested with Madoff in the two years before the Rockaway native admitted to the Ponzi scheme in 2009.
The ruling means Mets co-owners Fred Wilpon and his brother-in-law, Saul Katz, face a $386 million lawsuit — about $84 million in profits and $300 million invested — instead of $1 billion.
Picard has to prove that the Mets owners knew or should have known about the Ponzi scheme in order to recoup the funds.
When the Mets were faced with the $1 billion suit, they reached an exclusive negotiating window with hedge fund manager David Einhorn in a deal that would have given Einhorn a 33 percent interest in the team in exchange for a $200 million investment.
But the Mets owners called off the negotiations last month and said their financial situation had improved.
The team was expected to lose $80 million at the end of the baseball season and has to repay a $30 million loan from Major League Baseball that was secured last year.
Reach reporter Howard Koplowitz by e-mail at firstname.lastname@example.org or by phone at 718-260-4573.
©2011 Community News Group
By submitting this comment, you agree to the following terms:
You agree that you, and not TimesLedger.com or its affiliates, are fully responsible for the content that you post. You agree not to post any abusive, obscene, vulgar, slanderous, hateful, threatening or sexually-oriented material or any material that may violate applicable law; doing so may lead to the removal of your post and to your being permanently banned from posting to the site. You grant to TimesLedger.com the royalty-free, irrevocable, perpetual and fully sublicensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part world-wide and to incorporate it in other works in any form, media or technology now known or later developed.