Judge Narrows Madoff Trustee’s Suit vs. Mets Owners

In a ruling that could have a far-reaching impact on lawsuits seeking money for Bernard Madoff‘s victims, a federal judge threw out the bulk of claims by a court-appointed trustee who sought to recover about $1 billion from the owners of the New York Mets baseball team.

The decision by U.S. District Judge Jed Rakoff limited—though didn’t eliminate—possible financial ramifications from the epic Ponzi scheme for one of Major League Baseball’s most valuable franchises.Beyond making it harder for trustee Irving Picard to recover the owners’ principal investment in the Ponzi scheme, the ruling indicated that he would only be able to take back money withdrawn in the last two years of the fraud, a decision that could also benefit others against whom he had launched so-called clawback suits.

Judge Rakoff’s decision comes after nearly a year of contentious legal wrangling between Mr. Picard and the team’s owners, Fred Wilpon and Saul Katz. Mr. Picard has accused Messrs. Wilpon and Katz of ignoring warning signs of the Ponzi scheme. In his ruling on Tuesday, Judge Rakoff handed the Mets owners, who have denied any wrongdoing, a partial victory by tossing out nine of 11 claims Mr. Picard made in his 373-page complaint.

The judge, rejecting the Mets owners’ request to dismiss the entire lawsuit, said Mr. Picard could continue to pursue less than half of the $300 million of alleged false profits and $700 million of principal he had originally sought. He said Mr. Picard could seek $83.3 million in allegedly false profits and $301 million in principal. But Mr. Picard would have to meet a high standard of proof to seize any of the Mets owners’ principal investment—showing that the owners were “willfully blind” to signs of the fraud and ignored red flags that would have uncovered it had they investigated, the judge said.

Read the complete article here: Judge Narrows Madoff Trustee’s Suit vs. Mets Owners – WSJ.com.

This entry was posted in Bankruptcy and tagged , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.
  • LH&M is considered a debt relief agency.
    LH&M helps people file for bankruptcy relief under the Bankruptcy Code.

    Attorney advertisement. Prior results do not guarantee a similar outcome.