18
2011
Amended Lawsuit Raises More Questions
An article by Former Writers
A huge body blow. That’s the best way to describe the impact of the amended lawsuit filed today by Irving Picard against Sterling.
In addition to the approximately $300 million in fictitious profits received by the Sterling Defendants cited in the original complaint, the amended complaint states that the Trustee seeks more than $700 million in alleged fraudulent transfers of principal received by the Sterling Defendants, bringing the total recoveries sought by the Trustee from the Sterling Defendants to more than $1 billion.
The additional alleged fraudulent transfers of principal occurred during the six years prior to the December 2008 commencement of the BLMIS liquidation proceeding and include preferential transfers received by the Sterling Defendants within the 90-day period prior to the filing date.
“The amended complaint sheds more light on the deep dependency of the Sterling business organization on the continuation of the Madoff fraud and certain knowledge of indicia of fraud by the Sterling partners,” said David J. Sheehan, counsel to the Trustee.
That’s just a part of it. Here is the full press release from trustee Irving Picard where you can review all of the changes in the amended lawsuit filed in U.S. Bankruptcy Court on Friday afternoon.
Joe emailed me this and when I read it, I almost screamed for the Wilpons to get out of the baseball business. He’s not fooling anyone and I’m wondering if he realizes just how much trouble he is in. To be fair, here is a statement from Wilpon issued immediately after. All two sentences of it.
“The amended complaint is the latest chapter in the work of fiction created by the Trustee. We will pursue a vigorous legal defense that will set the record straight and vindicate us.”
I wonder if he realizes that Bernie Madoff is in jail for the rest of his life. No kidding Fred, he really is. A vigorous legal defense will take years, settle Fred, settle.
Certain legal departments around the City are working very hard on this case, and even Mario Cuomo has been summoned to mediate the situation without much success or progress to report.
Earlier today, the Wall Street Journal reported that executives at Time Warner Cable and Comcast would not allow the owners of the New York Mets to sell part of their stake in the jointly owned SNY network, nor would they give investors in the Mets any financial information about the cable network, virtually eliminating the possibility of SNY being included in any sale. Wow. Maybe this little tidbit included in the amended lawsuit had something to do with their position:
The amended complaint also provides additional substantiation of the inter-dependent relationship between Sterling and BLMIS as well as certain Sterling partners’ knowledge of Madoff’s dishonesty in his investment advisory business. For instance, the amended complaint details a multi-million-dollar interest- and cost-free bridge loan from Madoff to Sterling in connection with its purchase of the broadcast rights for the New York Mets from Cablevision. This transaction was documented by a single letter agreement that falsely described the loan as an “investment” by Ruth Madoff in the company that would later become the SNY network.
The way Picard worded it suggests that he has a copy of this letter among his mountain of other evidentiary paper trails. Yikes.
With the regular season closing in, the Mets have to start issuing paychecks to their players on April 15 and pay their stadium bondholders $22 million in June, the first of two semiannual payments. Moody’s Investors Service downgraded those bonds to junk status last year, and last month the ratings agency cited Picard’s lawsuit as a reason for changing its outlook on the bonds from stable to negative.
As the Mets prepare for the new season, their owners continue to solicit interest from potential bidders. Stepping back from Wilpon’s initial comments, the team’s adviser on the sale, Steve Greenberg, said the Mets would consider selling more than 25 percent as long as the owners retain control. About a dozen investment groups have applied to M.L.B. for permission to see the team’s financial records. Baseball is expected to start approving the groups in the next week.
But many sports investment bankers say bidders are almost certain to want more than a simple minority stake in the club, particularly if the Mets’ finances are in distress, as some bidders suspect. That could lead to protracted negotiations and delay any financial boost the team hopes to get from the sale.
The noose is getting tighter.
About the Author: Former Writers
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The amended lawsuit sounds like just a rehash of information that’s already been out there for weeks. Can anyone say what exactly is new about it?
As for minority investors, a couple of groups have already been approved by MLB and will be viewing the club’s financials very soon. This was reported in the NY Post. It looks like the sale that everybody said couldn’t happen without a part of SNY will happen.
The front people with the lead on this story ever since it first broke is the WSJ and NYT. If you are depending on the NY Post for your intellectual and accurate accounting of these proceedings all I can do is offer you my deepest condolences.
Uh, I did read the NYT’s piece on this and it was basically rehashing what has already been reported. So tell us, William, what’s really new with this amended lawsuit?
As for the news that MLB has just approved 3-4 investor groups to bid on a minority share of the Mets, are you saying the NY Post is wrong on this? That no groups have been approved???
the billion dollar figure is relatively old news at this point. I guess the full document might supply more details?
in any case, it really does not change anything in the short term. If it is going to trial, doesn’t matter if he asks for 75mill, 300mill, or 1bill.
I still think that Wilpon would be happy to settle to get this over with, but that requires some willingness to compromise by the trustee. if he is digging in, the wilpons have no option but to go all the way with this.
Yeah, the 1 billion is OLD OLD news. And I agree, stick, the Wilpons should fight this if the trustee doesn’t want to compromise.
Youve heard about the $54 million dollar fraudlent loan that was covered up and made to look like an investment to buy their 60% stake in SNY before today? I thought that was not only new news but big news.
Sorry guys, but I had more to add after I hit post. I wanted to say that if a letter and paper trail to that SNY startup loan exists, that’s not just civil that’s 50 years in a federal penitentiary when the FBI catches wind of it.
Okay I feel like a clod, but one more thing. Whereas the 1 billion dollar figure was just speculation that they could go after his charities and non sterling investments, it wasn’t until today that it became an official part of the lawsuit.
The 1 billion was talked about before, everywhere. It is not new. The temporary loan was talked about before too — but only the part about Ruth Madoff was reported. Still, the new details don’t add much.
And what law did the Wilpons break when they got a 1-day temporary bridge loan from Madoff?
As for the FBI catching wind of something, huh? Picard is representing the government. Anything he knows the government already knows too. If the feds had something on the Wilpons, they would probably have been charged by now.
By the way, it wasn’t a “fraudulent loan.” It was a real loan. No one was defrauded in this loan. A “fraudulent loan” would imply the Wilpons attempted to defraud the lender (who was Madoff in this case) out of his money.
Hodges I have to ask you this
What do you think legal investment firms do with the money that people invest in them?
Did you think they put it in a bank and collect the 2% interest?
No they LEND that money to someone else, charge interest based on the collateral they have to ensure repayment of the load and charge way more interest than a Bank would get back!
So the fact they took a loan to startup SNY is not unusual in any way shape or form.
How it was recorded by Madoff in his Faux books may be unusual but not the fact the Wilpons took a loan.
And if you were someone who got a mortgage from what turns out to be a Mobster or thief should your house be confiscated? Should you be indicted for the actions of a third party?
ALLEGATIONS FROM IRVING PICARD? WHO IS IRVING PICARD & WHERE DID HE COME FROM. BTW PICARD IS THE RESULT OF CROSSING TWO OF THE WORLD’S TWO MOST DISPISED & IMMORAL PROFESSIONS; LAWYER & COLLECTION AGENT! FROM THIS UNHOLY MATING WE ARE SUBJECTED TO MORE ALLEGATIONS BASED UPON PRESUMPTIONS & ASSUMPTIONS THAT SOMEHOW THERE IS A CLOSE PERSONAL AS WELL AS STANDARD BUSINESS RELATIONSHIP BETWEEN WILPONS & MADOFFS, TO MY KNOWLEDGE THAT’S NEVER BEEN DISPUTED BY ANY DEFENDANTS; THE GAP BETWEEN FRIENDS WHO DO BUSINESS WITH EACH OTHER & COCONSPIRATORS IS VASTLY SIMILAR TO THAT BETWEEN OLLIE PEREZ & EFFECTIVE PITCHING. THE EXISTANCE OF A BRIDGE LOAN BETWEEN FRIENDS THAT WAS PAID BACK ON TIME AS PROMISED IS NO MORE REPRESENTATIVE OF ILLEGAL COLLUSION AS CASTILLO’S PLAYING IN 16% OF ST GAMES GETTING 19% OF ST ABs @ 2B IS “NOT GETTING A FAIR CHANCE”(20%)
WHENEVER, IT COSTS A LITIGANT ZERO TO STRETCH REALITY & THAT LITIGANT IS RELYING UPON RECEIVING A % OF HIS ACQUIRED AWARDS IT CERTAINLY PROVIDES SIGNIFICANT MOTIVE TO EXPAND THE REACH FROM A % OF 300M TO A % OF BETWEEN 300M & 1B. USING A KNOWN FALSELY INFLATED PORTFOLIO AS LOAN COLLATERAL IN LEGITIMATE BUSINESS TRANSACTIONS IS CERTAINLY NOT THE ACTION OF SOMEONE KKNOWINGLY BEING DUPED. IT WASN’T AS IF THE WILPONS COULD DISAPPEAR WITH ILLGOTTEN GAINS. ALL LOGIC POINTS TO WILPON NEGLIGENCE IN DOING THEIR RIGHTFUL DUE DILIGENCE IN INVESTIGATING MADOFF PRIOR TO INVESTING. KNOWLEDGABLE BUSINESSMEN TYPICALLY KNOW “GET RICH QUICK SCHEMES ARE A SCAM” HOWEVER, HISTORY REVEALS A NUMBER OF OTHERWISE SUCCESSFUL BUSINESSMEN TYPICALLY SCORNED BY ESTABLISHED(BLUE-BLOOD)(REFER TO DOUBLEDAY/WILPON RELATIONSHIP) HIGH SOCIETY TEND TO THROW CAUTION ASIDE WHEN SENSING AN OPPORTUNITY TO “GET ONE OVER” ON THEIR ‘BETTERS’ HISTORICALLY THERE WAS ONCE A NEUVEU RICHE FRENCH SALVAGE BUSINESSMAN WHO ONCE PUTRCHASED THE EIFEL TOWER FOR THE PURPOSE OF SCRAP METAL FROM WHO HE THOUGHT WAS A FRENCH GOV’T OFFICIAL(KLUDICROUS?) NO, IT NOT ONLY HAPPENED; BUT AFTER THE FIRST VICTIM WAS TOO EMBARASSED TO REPORT IT TO POLICE THE CONMAN FOUND ANOTHER SIMILASR VICTIM & SOLD THE ICON AGAIN FOR THE SAME PURPOSE SCRAPO SALVAGE. THESE ARE TWO HISTORICALLY ASCCURATE OCCURANCES AS DETAILED IN THE BIOGRAPHY OF VICTOR LUSTIG WRITTEN BY HIS FORMER FBI PURSUER IN THE BOOK ENTITLED, “THE MAN WHO SOLD THE EIFEL TOWER” IN IT IS ALSO A DETAILED ACCOUNT OF THE SUCCESSFUL CONNING OF THEN CRIME KINGPIN, AL CAPONE. INCIDENTS SUCH AS THESE REVEAL THERE ARE OFTEN INTERNAL, PSYCHOLOGICAL MOTIVATIONS THAT OFTEN DEFY LOGICAL CONSIDERATION BY OUTSIDERS, AS SUCH I’M CERTAINLY CONTENT TO LET THIS DRAMA PLAY OUT IN COURT BEFORE I ACCEPT THE DETERMINATION OF PUBLIC OPINION BASED UPON HALF-FACTUAL, ONESIDED ACCUSATIONS. WHERE THER’S SMOKE, SOMETIMES THE’S SOMEONE DOING DRUGS & NOT NECESSARILY A FIRE!
WERE THE WILPONS STUPID? NO DOUBT. DID THEY TRY TO MAKE AN EASY BUCK? CERTAINLY. LET THOSE AMMONG US WITHOUT EVER CONSIDERING SUCH THROW THE FIRST STONE!
IT’S CERTAINLY AGAINST A MET FAN’S SELF INTEREST(NY METS) TO CASTIGATE VOCIFEROUSLY IN A WAY THAT DISSUADES LEGITIMATE VIABLE PUTCHASERS FROM BECOMING INTERESTED.
Picard gets a cut of every dollar he gets out of the Wilpons. At this point, he’s looking as crooked as the guys he’s suing.
All of this stuff Picard is bringing up is just posturing to make the Wilpons look like crooks. If there was hard evidence of criminal activity, the FBI would have been all over it by now.
The fact that they haven’t been indicted as criminals leads me to believe that Picard has no legal agument, and is just using anything that seems remotely strange to imply criminal behavior.
Picard is looking crooked? He is representing the hundreds of victims Wilpon and Madoff defrauded. Wake up.
I don’t think anyone is disputing the intent of the Picard group in recouping monies for victims.
Still stands though that the group is getting a pretty penny to do it. They’re all getting rich in the processes.
He still gets a cut of what he takes in. If he is working for a fixed salary, I’ll concede your point.
His 1 billion is based on $300 million in excess profits, which I believe should be given back immediately; and another $700 million in quasi-punitive damages based on an implication that the Wilpons did something criminal, although a crime has never been charged.
I think the logic he is using is something like, they should have been smart enough to be criminals?
And half those Victims don’t like the way Picard is handling the case!
i like baseball, i dont see how this holds anyone’s attention.
it holds my attention because it’s the reason why we’ll lose our shortstop, can’t sign anyone making over 1 million a year, and won’t allow our closer to finish over 50 games.
A closed mind is like a closed book: just a block of wood.
- Chinese Proverb
Martin, you shatter my perception of you. lol
i dunno what that means. what i mean is that baseball is fun and exciting. people are smacking home runs and stealing bases and it is awesome. but this is a story about some financial fraud or whatever. i dont see why it is fun or whatever. its terrible.
It means Castillo is gone, can’t complain about him.
Perez hasn’t screwed up enough in the pen to get rid of him yet.
So what else is there to complain about?
Ok we can go back to the old reliable Wilpons!
This has nothing to do with Baseball it has to do with unhappy people wanting to see someone else suffer so they feel better!
The question is what will they do once Perez is finally cut? Complain about the Wilpons all season until they are gone?
Or will they move onto Beltran and his Knee?
Will Reyes be next on the furious fan hit list?
Bay?
It’s a never ending parade of THIS GUY HAS TO GO!
and since no one has the power to fire the Wilpons, lets just put enough stories out about them and keep them front and center so maybe they will say who needs this and give up!
And they will rejoice in Blog land for about all of 5 minutes before the Glory of their victory fades and they find some new targeted person to get their “Your Life Turned to Shit so I feel better about mine!” fix.
As to what Des was saying I haven’t a clue! LOL
But it was very witty!
For those who wish to read it, here’s the NY Times take on the current issue written by Richard Sandomir.
Trustee – Loan Should’ve Tipped Mets to Madoff’s Fraud – NYTimes.com
Here’s the link for the Sandomir Article
http://www.nytimes.com/2011/03/19/sports/baseball/19madoff.html?src=recg
And what precisely in that article supports the notion that the loan itself should have tipped off the Wilpons that it was a fraud? I would like to hear it in your own words.
Just because Picard interprets a certain incident in a certain way doesn’t make his interpretation correct.
Annie I have only one question…
Why is it that everytime Picard says something is it taken as the Gospel yet when it is denied by the defendant it is all taken as Bull?
Notice this amendment asks for no more money than previously.
What was the purpose of the Amendment pray Tell?
To get back on the front page because Picard is hoping to slant the public (potential Jury Pool) before the trial starts.
And youy buying into it hook line and Stinker!
Hey dude . the metsie…if you want to beleive such reliable supporters of the Wilpons such as the king himself Bernie Madoff or the pervert gm steve phillips you go right ahead. numerous serious journalists have shredded the story all to the bad side for the wilpons.. but go ahead, support them after all they are in good compnay, you, bernie and steve the pervert gm. enjoy yourself.
Iz I don’t particularly believe anyone. All I’m saying is that both sides are giving a highly biased version of the events and we should not favor one over the other.
We have a proper venue to dicern what the truth is…
It’s called a COURT OF LAW!
I suggest we wait to see what they say about what is true, who is guilty of lying based on the evidence presented to that court and decided by uninterested parties of the Jury!
If you were the subject of accusations I would insist on everyone giving you the same treatment.
It’s not about what I believe. Beliefs have no place in justice except in the case of Jurors when they have seen all and attempt to weight the evidence put before them!
“I suggest we wait to see what they say about what is true…”
Well you know what they say. There’s three sides to every story. Your side, my side and the truth.
If 70% of the money the Wilpons are being sued for is based on a subjective opinion of whether or not they KNEW about Madoff’s scheme, I don’t see this working out well for Mr. Picard.
Right or wrong, he’s trying to prove subjectivity, and that’s never easy.
Actually there are four side…
One side the Other, the Vedict and what REALLY happened! LOL
The verdict compared to what really happened is proportional to the skill of the Lawyers involved to hide or expose details! LOL
Picard is relying on a very obscure Bankruptcy law that says they can try to claw back any profits an owner of a bankrupt company took over a certain period of time.
He is trying to say they were complicit but he has no evidence to prove they were actually in on the fraud so what he is trying to say that since the majority of the accounts in the fund were Wilpon accounts they were essentially OWNERS of the fraudulent investment firm (that is the one that has filed for bankruptcy) and therefore any profits and investments they made can be claimed and clawed back.
To site an example. If I owned a store and invested 10 Mil in it then got investors and took my 10 Mil plus 5 Mil profit back and THEN a few years later the store went bankrupt the victims have the right to “CLAW BACK” some of those profits and my initial investment that I had taken back.
It is predicated on the notion that I got my profit and then ran the store into the ground screwing everyone but myself.
And who knows it may even work but the problem with that is that Wilpon is not listed as an Owner of that company, Madoff is and despite the fact they asked him to cash out of the fund it was essentially Madoff that gave it to them.
Madoff borrowed from Peter to pay Paul.
hard to say Paul did anything wrong in that case.
I just feel that if we were in a similar position that we would all want the same “Innocent until Proven Guilty” to apply to us and if that is the case why are some not willing to apply it to others just because their favorite baseball team lost a bunch of games because their best batter had Knee Surgery?
It also has to do with a little bit of bias. Why are the Wilpons the only ones getting sued? You can’t convince me that the Wilpons are the only people who came out of this up some cash.
And a lot of this is all based on other people’s morality standards. The claim was the Wilpons SHOULD have known it was a fraud and SHOULD have done the “right thing.”
Says who? Why SHOULD they have known and who’s to say what the “right thing” was? The Wilpons did nothing illegal by investing and the profits they made are rightfully theirs, regardless of if other people involved in the scheme lost money. It was Madoff who screwed that poor, old granny. That’s what a ponzi scheme is.
Until Picard comes up with a better claim than, “they SHOULD have known because…….well because……well because I say so,” he’s as guilty of fraud as Madoff is if he gets even one penny fromt he Wilpons.
Well Picard actually is suing many people. We are only hearing about the Wilpons because they own a sports franchise and every sports network is coverng it.
Note you don’t hear much about it during the regular news reports it is always during the sports segment that any mention of this is made.
He also sued JP Morgan chase and settled for much less than their clients took in profits! Apparently many of the Victims he represents were very unhappy about the way he is handling situations differently. Some even think he is being unfair to the Wilpons and fear that by trying to get Billion they might even lose the 300 Mil everyone agrees (including the Wilpons) is due to the Victims.
As you correctly point out. If the Wilpons should have known so too should all of the “Victims” involved.
Are the profits rightfully theirs. not really. But the original investment made to get that profit is.
From what I have heard so far (which isn’t much really) even if both sides are PARTIALLY telling the truth the end and fair result should be something like returning the 300 Mil profit with Interest (as it would technically be a loan) and thats all!
The Victime would get what is essentially “THEIR MONEY” back with a reasonable return for lending it to the wilpons as a legitimate investment venture.
Then the only question involving the Wilpons (and the team) is do they have the assets to cash in so they can make that payment.
Which is why they are in discussions to sell minority stake in the team.
And I read recently that a few potential buyers have passed the Vetting proccess of the Wipons, new banking firm. Now just a matter of passing the League vetting by the owners to see if the old boy network is willing to deal with them.
And it is my guess that anyone who does buy in will eventually be majority owner of the team as there will likely be a first chance clause to buy the remaining shares should Wilpon ever decide to sell and conversely the Wilpons will have first crack at buying back those shares as well.
X, it only seems tat way; however a glimpse of Picard’s court filings as published on his site reveals this grren eyed octopus has extended his tentacles vast & wide & why not, he gets payede a % of everything
http://www.madofftrustee.com/CourtFilings.aspx