Author Topic: Madoff Decision Is Significant Setback for Owners of Mets  (Read 696 times)

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Offline welch

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Mets owners have to give up $300 million:

Madoff Decision Is Significant Setback for Owners of Mets

From the moment they were sued last year for $1 billion by the trustee for the victims of Bernard L. Madoff’s fraud, the owners of the Mets have fought every aspect of the enormous claim.

They rejected the trustee’s bid for what he called hundreds of millions in “fictitious profits,” dismissing his idea that they had been “net winners” over their decades of investing with Madoff.

They also derided the trustee’s bid to force them to pay back hundreds of millions more — the trustee claimed the owners had been willfully blind to evidence Madoff might have been a fraud — as a gross overreach that was backed by distorted or fabricated evidence.

On Tuesday, however, a federal appeals court in Manhattan appeared to settle a sizable chunk of the suit. Under its ruling, the team’s owners, Fred Wilpon and Saul Katz, could have to turn over at least $300 million to the trustee. It is a major financial setback for the owners who, faced with an unprofitable baseball operation, have already been forced to sell a portion of the team just to stop the bleeding of money.

The United States Court of Appeals for the Second Circuit, in a unanimous ruling by the three-judge panel, said the trustee’s central formula for deciding how to recoup and redistribute the money that had moved through Madoff’s vast Ponzi scheme was appropriate. The trustee, Irving H. Picard, had decided that investors who had taken more money out of their accounts with Madoff than they had put in had to return their “net winnings.”

It was that calculation that led Picard to make the $300 million claim against Wilpon and Katz. He had charged that scores of the accounts the men, their families and businesses had with Madoff had wound up “net winners” over the years.