Judge Jed s. Rakoff ruled this morning that the Met ownership group, led by Fred Wilpon, will face a jury trial on the question of whether they were willfully blind to Bernie Madoff’s scheme, beginning on March 19. I will be there to cover the trial and provide daily updates on the blog, along with the baseball coverage, because nothing will impact the Mets on the field nearly as much as the future financial viability and/or survival of their ownership.
The judge also ruled in favor of Irving Picard, trustee for the Bernie Madoff victims, on the question of whether Wilpon and his partners owe approximately $83 million in fictitious profits over the final two years of Madoff’s fraud. Exactly how soon, and how completely, that needs to be paid will go a long way toward determining how capable Wilpon and his partners will be of surviving the month financially intact.
More to follow on this, obviously. But before a judge who has been quite helpful to the Wilpon side in the past year, the owners did about as poorly as they could have today.
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Au contraire. The were not long ago looking at a possible billion dollars! Then 730 or so. Then it became 383. Now it’s 83 at the max with the judge saying he is skeptical that the plaintiff can prove his “willfully blind” case. Seems like the Wlpons did pretty well for themselves. Whatever the outcome, they’ll appeal and ask that the give-back be less, or nothing.
Afraid this isn’t really true. They face a trial with a potential for another $303 million, along with that $83 million judgment from today. Essentially, that $83 million is the floor, not the ceiling- though the judge left open the possibility of reducing it.
The real problem at the moment for Met ownership at the moment is that once that final number is set, they can either pay it, or post 110% of it via a bond and appeal it. And it isn’t clear where they’d get the money to do either.
It get complicated. I’m guessing that the judgment will be against a variety of Wilpon entities. I don’t know how much of that will against the Mets, per se. Along these lines, Mets may be totally straped for cash, but We don’t know how much cash may be available in Sterling, the Mets parent corporation, or the myriad of Wilpon entities and trusts that invested in “Madaff”. For example, if a trust for the benefit of Jeff’s children had $25 million of fictitious profits, that trust would be responsible for returning that money, not the Mets. There a lot more details to unfold, especially the Judge’s order which may detail who is on the hook for what It’s a business mystery thriller: “Who Killed the New York Mets”
Fred was quoted the other day as saying less than 2 million of the 83 is actual Mets money.
How true that is will soon be determined. More relevant still: how much of that money needs to be paid back by Sterling Equities. Doesn’t much matter which entity within SP needs to pay that back, since it is all controlled by the same partners.