Latest On Madoff Lawsuit: Cuomo To Mediate, Junk Bond Rating

An article by posted on February 10, 2011

A federal bankruptcy judge in Manhattan appointed former New York Gov. Mario Cuomo on Thursday to serve as a mediator in the legal dispute between the Mets owners and the court-appointed trustee trying to recover money for victims of Madoff’s Ponzi scheme.

According to the NY Times, the trustee, Irving H. Picard, has accused Mets owners Fred Wilpon and Saul Katz, chief operating officer Jeff Wilpon and affiliated Sterling Equities entities of making $300 million in fictitious profits from Madoff’s swindle and ignoring warnings that Madoff’s returns were implausible.

The Wilpons and Katz have denied wrongdoing, saying they are among Madoff’s victims.

“The court has ordered the parties to engage in mediation. We have nothing further to say at this time,” Sterling Equities said in a statement.

According to Reuters, Moody’s offered an unfavorable assessment of the bonds the Mets used to pay for the construction of Citi Field. 

“While the ultimate outcome of the litigation and the timeframe for final resolution are unknown at the present time, the negative outlook acknowledges the close connection between the health and performance of the Mets baseball team and the long-term credit quality of the stadium project,” Moody’s said.

A Moody’s spokesman said the revised outlook affects $695 million of debt, which is rated Ba1, Moody’s highest junk grade.

Reuters adds that the Mets have had two straight losing seasons, although the team has one of the highest payrolls in Major League Baseball. Attendance fell 19 percent last year at Citi Field in the ballpark’s second year of existence.

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