Friday, 25 July 2014
Last updated 1 hour ago
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."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…