Mets Win Dismissal Of Most Madoff Claims

Sep 28 2011 | 11:59am ET

A federal judge has dealt a significant blow to the Bernard Madoff receiver's in his battle with the owners of the New York Mets.

U.S. District Judge Jed Rakoff yesterday dismissed nine of the 11 claims made by Irving Picard against Fred Wilpon, Saul Katz and other Mets entities. The ruling means that the Mets owners will have to return about $600 million at most—and likely $300 million or less—rather than the more than $1 billion Picard had sought.

Rakoff ruled that Picard could seek to recover as much as $295 million in fictitious profits paid out by Madoff. But he said the trustee would have to prove "that the defendants willfully blinded themselves to Madoff's securities fraud" to recover some $300 million in principal the Mets defendants withdrew during the two years before Madoff's Ponzi scheme collapsed.

Rakoff called Picard's evidence on that point "less than overwhelming," but "sufficient" to avoid dismissal.

What's more, Rakoff said that Picard may only be able to recover $83.3 million—the amount of fictitious profits the Mets defendants withdrew during the last two years of the scam.

"How to determine which profits the trustee can recover remains an open question," Rakoff wrote.

The Mets defendants cheered the ruling, with their Sterling Partners issuing a statement saying it was "pleased that the court today dismissed nine of the 11 counts in the trustee's complaint, and that the lone remaining count in which the trustee seeks to recover payments from Sterling Partners is limited to a two-year period."

A Picard spokeswoman said the receiver was reviewing the ruling.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.