Mets make deal with Madoff trustee
The settlement avoids a civil trial for the club and means they'll have to pay far less than they otherwise might.
The New York Mets' owners scored an early-season victory Monday, stabilizing the club's financial future in a deal with a trustee for Bernard Madoff's fraud victims that requires them to pay millions less than they might have — and lifts a dark cloud from a team whose dismal play seemed to mirror its misfortune in the owner's box.Skip to next paragraph
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Mets CEO Fred Wilpon and team President Saul Katz, co-majority owners, emerged smiling from a Manhattan federal courthouse after a judge announced the agreement, which makes it likely they'll pay much less than the agreed-upon $162 million, if any at all; guarantees they will owe nothing until the end of four years; and averts a high-profile civil trial.
"Now I guess I can smile, maybe I can take a day off, but I can't wait to get back to our businesses, which I love," Wilpon, sporting dark sunglasses, said outside court as he pledged to rejoin the Mets on Tuesday at spring training in Florida. He stood with Katz, who rested his hand on Wilpon's shoulder under a sunny sky.
After speaking, Wilpon gave a nod to the sagging faith some have had in recent years with owners who seemed mired in accusations that they knew Madoff was up to no good but kept silent because they were making lots of money on their investment.
"Stick with us," he said.
In a lawsuit that demanded $1 billion from the Mets owners, Picard said Wilpon and Katz had meetings with Madoff in his office at least once a year, a privilege few investors enjoyed, and that Katz at times spoke directly with Madoff at least once a day.
Madoff is serving a 150-year prison sentence after revealing in December 2008 that he cheated thousands of investors of roughly $20 billion for years.
The judge noted the end of acrimony as he read a document that promised neither side will disparage the other or the agreement and that Picard will no longer accuse the Mets owners of being "willfully blind," a legal term central to the civil trial the deal eliminated. The litigation could have forced the team's owners to pay up to $383 million.
"All I have to say is, love is wonderful," U.S. District Judge Jed S. Rakoff said, smiling.
The deal was shaped so that the team's owners could owe much less than the $162 million they received in fictitious profits in the six years before Madoff's fraud was revealed.
The agreement calls for the sum to be reduced by money that would otherwise be paid for $178 million in losses claimed on behalf of dozens of accounts held in the name of defendants in the action against Sterling Partners, a business entity that includes the Mets owners, along with real estate, sports media and private equity interests.
David J. Sheehan, the lawyer for trustee Irving Picard, told the judge that $10 million in losses by Sterling Partners that was recovered by the trustee was already set for disbursement, an amount that would reduce the Mets owners' debt to $152 million.
The trustee says he has recovered 52 percent, or $9 billion, of claimed principal losses by all Madoff investors. More than $6 billion more has been identified but not yet secured.