Tuesday, 27 September 2016
Last updated 3 hours ago
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.