Could the New York Mets go broke? Two years after opening Citi Field, Mets co-owners Fred Wilpon and Saul Katz are on the brink of financial disaster because the team was built in large part with profits earned from investments made with Bernard Madoff. If that happens, it will not be just the Wilpons who suffer.
The Amazin’ Mets are a part of Queens. They are a symbol of the grittiness of the people of this borough who stood by their team. It is unthinkable that this team and its house should be added to the list of Madoff’s victims.
It is not that Madoff trustee Irving Picard does not have good reason for looking at Sterling Equities, a business controlled by the Mets owners. The trustee, who has been working hard to compensate the victims of Madoff’s schemes, claims the Mets received $300 million from Madoff’s Ponzi scheme. The Mets used the profitable Madoff accounts as collateral in getting loans from some of the nation’s largest banks.
The lawsuit claims Sterling Equities should have been suspicious of the profits generated by the investments with Madoff. The suit claims “the Sterling Partners also knew or should have known that Madoff’s returns were too good to be true based on their access to sophisticated quantitative information showing that Madoff’s historical performance was almost impossible statistically.”
If true, then the banks who accepted these investments as collateral for new loans also have questions to answer.
No one is suggesting Wilpon or Katz knew Madoff was a criminal. Faced with Picard’s lawsuit, the Mets owners announced Jan. 28 that they were seeking to sell a minority stake in the team due to “uncertainty.” A number of investors have expressed interest, but it is unclear if this will be enough to save the franchise.
Allowing the Mets to collapse is unthinkable. Even if one accepts the argument that Wilpon should have smelled a rat, there is no denying that he has given this city a treasure. The Sterling partners lost a fortune when Madoff went down.
Hopefully, Picard and the Mets lawyers can come up with a solution that will ensure that the Mets remain a Queens treasure.
©2011 Community News Group
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