Thursday, 29 January 2015
Last updated 13 min ago
Mar 6 2012 | 2:32pm ET
U.S. District Judge Jed Rakoff refused to throw out a $386 lawsuit against the owners of the New York Mets by the trustee for Bernard Madoff’s investment firm.
While Rakoff owned he remained “skeptical” about Madoff Trustee Irving Picard’s ability to win the suit, he nevertheless on Monday rejected the bid by Fred Wilpon and Saul Katz to toss it out of court.
Picard claims Wilpon and Katz acted in bad faith dealing with Madoff, but the ball club owners say they saw nothing to raise red flags during the 20 years they entrusted their money with the convicted fraudster, who is currently serving a 150-year prison sentence.
The ruling may allow for an out-of-court settlement of the case, which is scheduled to go to trial March 19.
Picard spokeswoman Amanda Remus told Reuters the trustee was reviewing the decision.
Rakoff said Picard could potentially recover the profits made by the Mets owners in the two years prior to the 2008 bankruptcy of Bernard L. Madoff Investment Securities. That sum, he said, would be determined later but could total as much as $83.3 million. However, he said Picard would have his work cut out for him proving the owners acted in bad faith during that period.
Rakoff also warned that much of the “evidence” offered on both sides would not be admissible.
"Conclusions are no substitute for facts, and too much of what the parties characterized as bombshells proved to be nothing but bombast," Rakoff wrote. "Nevertheless, there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith."
Rakoff has already trimmed Picard’s demands considerably—last September he threw out more than half of the original $1 billion lawsuit.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…