Mets Owners Madoff Fraud Costs Struggling Team $162 Million
The owners of the New York Mets have settled on a $162 million lawsuit for their involvement in the Bernie Madoff fraud case. The lawsuit is favorable compared to the original charges, but the team still faces extreme financial difficulties.
Irving H. Picard, the trustee who represents the victims of Madoff's financial fraud scheme, has come to an agreement with the Mets owners, who will pay $162 million in a lawsuit that was originally set at $1 billion.
Picard was appointed in 2008 by a bankruptcy judge to recover money for Mr. Madoff's victims. Thus far, the trustee has collected as much as $9 billion, the greater sum of it retrieved from what Picard considered unjust beneficiaries of "too good to be true" financial returns.
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Picard also accused Mets owners Fred Wilpon and Saul Katz of a turning a blind eye to fraudulent investments. The new lawsuit, however, revokes that charge and is unlikely to cost the baseball team owners any out-of-pocket cash.
The original claim of $1 billion would have forced them to sell the team, according to the owners.
"In an effort to stabilize the team's finances, the Mets appear to have sold 12 minority stakes in the club for $20 million each," the New York Times reported.
"I can't wait to get back to our businesses, which I love, and the first order of business, the first priority, is getting down to Florida tomorrow, getting to that spring training camp and bringing the Mets back to the prominence our fans deserve," Mr. Wilpon told the Times outside of federal court in Manhattan.
It is unlikely that the owners will have to pay all, if any, of the $162 million lawsuit. How much they pay will depend on Picard's efforts elsewhere, to retrieve the full amount owed to victims.
"The Mets' owners had applied to Mr. Picard to be reimbursed $178 million from their net loser accounts. If Mr. Picard's recoveries do not yield $162 million after three years, Mr. Wilpon and Mr. Katz have guaranteed to pay as much as $29 million," the Times stated.
Despite the Mets having settled the lawsuit favorably, the baseball franchise still faces other financial difficulties.
"The club has lost some $120 million over the past two years, has had to slash its payroll as attendance has fallen at Citi Field, and has had to put a portion of the team up for sale," the Times confirmed.
