Mets owners settle Madoff suit
Brothers-in-law Fred Wilpon and Saul Katz, owners of the New York Mets, have agreed to pay $162 million to settle a case brought against them by Irving Picard, the trustee for the victims of Bernard Madoff's Ponzi scheme. The settlement was announced the day jury selection was to have begun in the case.
A New York Times report noted that under the terms of the settlement, Wilpon and Katz will receive $178 million from Picard for money they lost in some of their Madoff accounts; that money will be used to repay the $162 million, which they agreed to pay Picard to reimburse Madoff's victims for fictitious profits they made on other accounts. Thus, Wilpon and Katz may not have to pay Picard anything out of their own pockets.
The Times report noted that the Mets have sold all 12 minority stakes in the team that had been marketed since September. Only five of the shares, which sold for $20 million each, were purchased by outsiders, the Times article said. The Wilpon and Katz families bought three of the shares, and the two cable companies that own part of Mets cable network SNY bought four others.
The Times article said the Mets are expected to announce that they have repaid a $25 million loan from Major League Baseball and a $40 million loan from Bank of America. However, according to the report, the team -- which lost $121 million over the last two years and has slashed payroll -- owes about $400 million to a syndicate of banks.
A Wall Street Journal report said the settlement with Picard "apparently was as much about [Wilpon and Katz's] reputations as it was about the money." Former New York Gov. Mario Cuomo, the mediator in the case, told the Journal he sensed that Katz and Wilpon, who contend they were unaware of Madoff's fraud, were upset that their reputations had been "besmirched." (Sources: New York Times, March 19, 2012; Wall Street Journal, March 20, 2012.)
Posted Tuesday, March 20, 2012 • Permalink