5
2012
Judge Rules: Mets Going To Trial
An article by Hojo's Mojo
Judge Jed S. Rakoff of the US District Court in Manhattan has ruled that the lawsuit filed by the trustree against the Mets owners will go to trial on March 19.
The judge also ruled that the Wilpons are liable for the $83 million in fictitious profits.
Irving Picard will have a chance to convince a jury that the Mets may be liable for an additional $300 million.
So here we go…
Original Post 10:00 am
Judge Rakoff is scheduled to issue a ruling today in the $386 million clawback lawsuit filed by the trustee Irving Picard against Fred Wilpon and Saul Katz.
If the judge finds that there is not enough evidence to prove that the Mets owners willfully blinded themselves to the Ponzi scheme, Rakoff could grant the motion for summary judgment filed by the Mets’ owners and have the suit tossed. If that happens, there will be no trial and it would prevent the trustee from going after the $300 million in principal.
However, if the judge rules against the Mets owners, the case will go to trial beginning March 19 as scheduled and the jury selection process will begin.
The judge is also expected to rule on the trustee’s motion to recover the $83 million in fictitious profits the Mets owners received from their Madoff accounts. Picard is seeking to recover this money before the start of the trial.
The judge’s rulings are not expected to be announced before 5:00 PM today, but you can bet that whatever happens today, either side will most likely file for an appeal.
About the Author: Rob Johnson
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I’m betting he lets the case go to trial which will get rid of the appeals.
but he could also give each a little bone, Award Picard the undisputed 83 Mil before dismissing the rest of the case!
Thats probablythe fairest, and most expedient decision but one side, the other or both will probably file an appeal!
If it’s the Wilpons who appeal then they are dumber than a doorknob! Just pay the 83 Mil and get your life back!
Keep in mind that Picard’s firm has been paid over $400 million; and that money is pulled from what goes to the victims of Madoff. I would not be surprised if the judge does the math on what the added legal bill for the trial will be and says enough is enough picking a number.
In the interest of everyone involved, can the judge in good conscience allow a protracted legal battle, have Picard rack up another $20+ million for a legal battle he may loose?
Enough is enough, make it $50 million and be done with it.
Picard has lawsuits out there that total more than Madoff victims lost. How can that be? While legally slighlty different than a bankruptcy procedure, Picard’s goal can not be to make a profict (sue for more than what was lost).
Thats why I think he may just give Picard his 83 Mil and dismiss the rest of the case to get it over with and then let the Victims decide if they want to lose another 100 Mil in lawyer fees to try and get the extra 200 Mil they probably won’t get anyway!
Cause if they get the 83 MIl they would then risk losing 20+ mil just to appeal a case most people feel is unwinnable!
No Rich,
The money does not come from anything won that goes back to the victims.
Piccard and his firm are paid from a special Securities Investor Protection Corporation, an industry-financed investor protection organization.
http://dealbook.nytimes.com/2011/09/22/bill-for-madoff-trustee-rises-224-million
Well so much for that: (per the tweets):
In summary, Wilpons lose $83 million before trial. $303 million more at stake before jury March 19.
$83M may be revised downward pending next judge’s order. But Mets’ owners could be liable for up to $300M at trial.
Further:
Judge Rakoff does write: “Court remains skeptical that the Trustee can ultimately rebut the defendants’ showing of good faith.”
Paging Einhorn or Cuban or (insert a billionaire’s name in here)…
So in other words it looks like the Wilpons might only be on the hook for 83M.
The 83 Million is the one number most everyone agrees (including the Wilpons) they actually owed the Victims.
If that was the only thing Picard had asked for this thing would have been over before it started!
It was his grab for 1 Billion (now reduced to 300+ MIl) that is why there is a fight at all!
Reading Sandomir’s coverage on today’s ruling he points out that if the Wilpons were to appeal the ruling on the fictous profits they would have to “post a bond worth 110 percent of the monetary damages.” So if the judge decides the Wilpons had to pay the full amount of $83M they would have to pony up $91M. The bond would prevent Picard from collecting the sum pending the appeal.
Sandomir points out the obvious reasons the uncertainty he has on how easily the Wilpons would be able to come up with that money but it peaks my curiosity of would they actually appeal?
http://www.nytimes.com/2012/03/06/sports/baseball/judge-deals-a-financial-blow-to-mets-owners.html?ref=sports
I doubt highy they will appeal the 83 Mil…They will probably accept that judgement and work to get the remainder dismissed.
I agree. even if the mets think they owe nothing, if they can work out a deal to pay the $83 and be done with it, it will make sense. I wonder if Cuomo will make one final attempt to get the sides to agree on a settlement.
But given that the trial puts more money in the pocket of Picard and the Mets are pissed at how Picard has handled himself, I have to doubt there will be any type of settlement.
Nah I think there is just too much bad blood to get them to settle at this point…
Only possible if the Wilpons think they are losing and or Picard is unsure he can get something at trial!
Then it will be suggested and offered but this thing I feel is going to go to a jury if not dismissed before it gets to them.
I loathe the Wilpons…I hope they are liable for the full $383 million and I hope their counsel and court costs are another $5 million. Mark Cuban or Mark Repole would be more than willing to take over this debt riddled franchise for the Wilpons.
Well, I am definitely not surprised at all. 83 million that the Wilpons have to cough up could be much bigger if the case goes against them on March 19th. It could be a very serious blow to the Wilpons that would force them to put the Mets up for sale. Storm clouds turning even darker at this point.
I just wonder about the sincerity of the WIlpons re: The Mets. I know I will never see the likes of millions we are discussing here. I have been a Met fan since Joan Payson. Love ‘em.
The WIlpons are allowing the team to suffer at the hands of their financial woes. I know they claim love and will never part to what cost?
If you did bring in a Cuban would he preserve the team that we love or would we be the Queens Yankees in bidding wars with Steinbrenner.
Tough to decide! I am excited by the fact that the scenario is inviting to Mets young players getting a chance.
Self preservation amongst the wealthy is not an appealing season opener.
The only thing we know that is official - as far as reporting goes as required by the government (?) is concerned - is that “The Metropolitan Baseball Club of New York, Inc” lost $70 million this past year, plus some the year before and year before that. Unofficially, of course, the loss is all boulder-dash (I use that termonology since this is a family oriented group) because the Mets are a slice of the parent company, Sterling Equities, and not a sum all to itself. Everything is tied into together.
Even ignoring that overall pie, The Wilpons assessment was to build a smaller ball park and charge each fan more per capita to compensate for the lower attendance figures (and probably bring in a few extra bucks as well). They stated this goal could be met by averaging 39,000 per game at the ticket prices established in 2009. Something must have been wrong with that projection since the team reprted losing money in 2009 (again, boulder-dash in the real sense) while having actually surpassed the attedance goal by an extra 118 per game (39,118 average).
They would therefore either have to raise their prices even more than they were in 2009 to make ends meet or then simply just stop the boulder-dash about the Mets being broke and say the Mets have to suffer along with all the other Sterling Equitities holdings.
“judge Rakoff does write: “Court remains skeptical that the Trustee can ultimately rebut the defendants’ showing of good faith.”
right from the judges mouth.
the wilpons arent going anyway and will own the mets for a long time. get used to it
Still hard to believe that this whole mess was not settled a long time ago. And based on this ruling, in a “normal” case you would figure it would be now. So of course, this mess will drag onto trial.
Off Topic: Former Met Lenny Dykstra sentenced to 3 years in prison.
http://latimesblogs.latimes.com/lanow/2012/03/lenny-dykstra-sentenced-to-three-years-in-prison.html
He may have to use his nickname “NAILS” in the big house, if you get my drift. Hope he can back it up!
Even More Off topic: First Spring Training game is tonight at 6 pm against Nats
I saw that Bryce Harper is expected to play. It will be good to get a glimpse of this kid.
No business can afford to lost money year after year. Attending a Mets game is discretionary and with gas prices going to 5 bucks a gallon, a 500 team will not draw. That means no extra revenue from playoff games and spending more on promotions to draw fans. Add for certain the 83 million dollars the judge says they have to pay and it keeps adding up. You can intermingle Sterling Partners and the Mets but in the end it is the same pot of money. Don’t be so sure there are rich buyers lined up wanting the Mets. It is not the Yankees and the only thing we have in common with them is New York. Oh by the way, did they ever get all their 20 million dollar investors? When David Einhorn walked, it doomed the Mets.
oh, the mets/SNY is still a goldmine overall. Plenty of people will be lining up to buy them out.
not many MLB opportunities come up at all, and rarely a “premiere” franchise in a major market like this.
Can anyone tell me if they met the 20 million investor goal that they set? Let’s analyze what you call a “premier” franchise. Having a MLB franchise in New York doesn’t necessarily make a premier team. For example the quality of the team and its fan base make a premier team. Some examples: Boston Red Sox, NY Yankees, Phillies and Cardinals. Now their are semi premier teams and they are Mets, Cubs, Dodgers, Reds and the Braves. I don’t know if there are a lot of anxious buyers for the Mets but one for sure is David Einhorn. Mark Cuban maybe. I know one thing bleeding money will surely damage the Mets brand and make the future muddled.
Of course, the situation regarding the future of the Mets being able to operate as a major league rather than mickey mouse team depends more upon the future of Sterling Equities than anything else.
Nobody is going to buy the Mets from Sterling without the Wilpons including a portion of their SNY holding and yet, if Sterling Equities sells any of it shares, they must first be offered to their current partners. So if Time Warner and Comcast want those shares, that means the Wilpons will have to give up the Mets for literally next to nothing or redo the portion regarding the selling of television rights so it appears as a Met revenue – oh, hell…, let them figure it out.
Lou gets it.
They cannot keep losing money, no matter what else happens with Madoff. You think it’s a coincidence that St Lucie is seeing the smallest attendance figures in years? NO ONE wants to watch the Mets this year. Sure, if they win, people will come. That is a highly unlikely outcome.
People are quick to forget that its not just Madoff. They owe tremendous debts on both SNY and the ballpark.
Things are bad for them regardless of the trial. But they will stop at nothing to keep the team so expect the penny pinching on the Mets to continue indefinitely.
Ok…we are all self proclaimed General Managers…so when did we become legal experts?….did I miss that memo?
Jersey,
We put five bucks in the mail and got our esquires from a little old lady living above a gas station. Got to be valid – came with a certificate of authenticity!
I love the expressions in that photo: Fred – consternation, Saul – smugness, Jeffie – bewilderment.
OK, so much for the Wilpon’s motion for summary judgement. That bit the dust with the judge’s ruling and away went Joe D’s theory of better days ahead into the trash can. Now the Wilpons face an $83 M bill payable within the next 2 weeks and a possible $300 M on top of that. I hope the $20 M investors are happy regarding where their “investment” dollars are going. There are plenty of steep financial hurdles directly ahead in the path of the Wilpons. Best course of action for them? … “Settle and Sell”. Let’s go Fred: Wake up and adopt S&S. Then the Mets can go back about their real business of being an actual ML BB team.
The Wilpons still have to prove that they were not willfully blind to the issue. That’s the heart of Picard’s argument – that the Wilpons were not part of the scheme but that there were enough warnings brought to their attention and with their knowledge of investments, etc. they should have least attempted to pursue the matter further.
It might be the Wilpons defense that they did just that and came up with nothing to prove Madoff was doing something shady hence, they were duped but had not turned a blind eye to the possibilities.
I don’t know if it’s an either all or nothing at all decision or if the Wilpons might be responsible for part of the $300 million that Piccard is seeking – after all, what does one expect for five bucks?
‘The Wilpons still have to prove that they were not willfully blind to the issue.’
Actually, I believe it’s the other way around. The Wilpons/Katz are defendants in this case. Therefore, the burden of proof is on Picard to prove they were willfully blind.
Actually, it doesn’t matter who is technically responsible for the burden of proof since both sides are going to make their arguments regardless and it will be the jury that makes the decision. The “reasonable doubt” will weigh more in favor of the Wilpons than the pantiffs and that is why I feel it will be somewhere in between and not all or nothing at all as far as the $300 Million goes.