Mets Owners Seek End To Madoff Lawsuit

Jul 8 2011 | 12:02pm ET

The owners of the New York Mets have asked a judge to toss the $1 billion lawsuit filed against them by the court-appointed receiver in the Bernard Madoff case.

Irving Picard has alleged that Fred Wilpon and Saul Katz, longtime friends of the Ponzi scheme mastermind, aided and abetted the scam by ignoring frequent red flags during their decades-long investment with Madoff. The baseball team's owners, in a motion filed yesterday, dismissed those claims, arguing that Picard cannot prove his case.

The Mets owners "were betrayed by a friend and realized an aggregate loss of over half a billion dollars" when Madoff's fraud was revealed, the filing claims. "There were not warnings."

U.S. District Judge Jed Rakoff, who earlier this week temporarily took over the case from the federal bankruptcy court, will hold a hearing on the motion on Aug. 19.

The Wilpons' massive Madoff losses, coupled with the Picard lawsuit and the Mets' massive debts, forced them to seek a minority owner for the team in exchange for a much-needed cash infusion. Six weeks ago, they named Greenlight Capital's David Einhorn that minority partner. But despite hopes that a deal would be completed by the end of last month, giving the Mets access to the $200 million Einhorn will pay for his slice of the team, negotiations between the two sides are continuing, even though Einhorn's exclusive window has expired.

According to ESPNNewYork.com, a deal will not be finalized until August. It is unclear what issues remain outstanding; under the proposed deal, Einhorn will get one-third of the Mets for his $200 million, and the Wilpons will have between three and five years to pay him back. If they do, Einhorn gets to keep a stake in the team, either the full one-third or one-sixth, according to competing reports. If they do not, he gets to boost his stake in the team to about 60% for an undisclosed additional amount.

"Things are proceeding smoothly," ESPN's source said. "It's just taking longer than expected."


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.