If you want the full story of why Irving Picard, trustee for the Bernie Madoff victims, chose to settle, check out my piece at Capital New York. But in the meantime, as we ponder this off day for the team in Florida, here’s the basics as they relate to the Mets.
- If you were hoping the Fred Wilpon ownership group would sell, this is bad news. The trial offered a knockout blow, and had a jury found for the trustee, bankruptcy likely would have followed. (Hence the settlement, as you’ll see in the larger piece.) Instead, the Mets not only have more time- any money due to the trustee wouldn’t begin to be paid out until four years from the date the settlement is approved, or likely April 2016- but the legal avenue is no longer a pathway toward forcing the Wilpon group out. So it is significant, though how significant depends on the issues below.
- The settlement is far from getting the Wilpon group out of financial difficulties. Remember, the sale of minority shares in the team- often ascribed to the lawsuit, or “uncertainty” from the suit, as it was described by the Mets when it started- is not intended to pay any settlement at all, and never was. The $200 million is intended to pay off current pressing debts like the $40 million bridge loan due back to Bank of America, $25 million due back to Major League Baseball, and a portion of the $430 million debt against the team due back in 2014. That portion was $100 million when the deal to David Einhorn nearly went through last summer, and there’s no reason to believe it would be less now.
- They don’t have those investors yet. If the trial is what kept other investors from joining the seven shares already accounted for- one from Saul Katz, one from Jeff Wilpon, four from SNY, and one from hedge fund manager and leading candidate to buy the Dodgers Steven A. Cohen- then we’ll soon see the Mets add more. If the large number of outstanding debts Sterling faces- in addition to those mentioned above, there’s another approximately $600 million due on Citi Field in bi-annual payments that totaled $43.7 million last year and interest on both the Mets debt and a $450 debt against SNY (itself due in 2015) that totaled $50 million last year.
So time will tell if this was merely an ephemeral victory, or the first step in a Wilpon comeback. Make no mistake, however: it was a huge bullet dodged.