Mets Settle Madoff Suit for $162 Million
NEW YORK (TheStreet) -- Owners of the New York Mets will pay $162 million to the liquidator of Bernard Madoff's Ponzi scheme, settling a lawsuit filed on behalf of investors who lost an estimated $20 billion.
The settlement, which took place on Friday, was announced Monday as the Mets owners Fred Wilpon and Saul Katz were set to start trial against Madoff's trustee Irving Pickard, who is seeking to recover funds from the Ponzi scheme to repay investors.
|The Mets owners wash their hands of the biggest Ponzi scheme in history for $162 million.|
U.S. District Judge Jed Rakoff, who was set to preside on the trial, announced the Mar. 16 settlement in a Manhattan court.
On March 5, Rakoff ruled that the Mets owners should forfeit up to $83 million profits from Madoff's Ponzi scheme. The $162 million settlement covers Wilpon and Katz's financial liability on any alleged knowledge of Madoff's Ponzi scheme, which was seen by trustee Picard to have been cause for them to withdraw money from the fund ahead of its December 2008 collapse.
The Wilpons invested with Madoff and then withdrew $47.8 million more than their initial investment.
Prior to the settlement, the Mets owners had been successful in getting Rakoff to reduce potential claims from $1 billion to $386 million. In the settlement, they now avoid facing a trial and a jury.
The co-owners of the Mets, who also own financial and real estate assets, are struggling to maintain control of the Mets after New York's second most popular baseball team suffered from financial difficulties in recent years.
Mets owner Fred Wilpon and his firm Sterling Equities are seeking minority investments in the Mets franchise to "address the air of uncertainty" over their finances on the heels of the Bernard Madoff Ponzi scheme. Recently, hedge fund magnate Steven A. Cohen of SAC Capital made a $20 million share investments in the Mets.
In 2009, Madoff pleaded guilty to the biggest Ponzi scheme in history and is currently serving a 150-year sentence in a North Carolina prison.
For more on Judge Rakoff, see his rejection of a SEC settlement with Citigroup. For more on the Mets and sports team sales, see why Mets and Dodgers deals are driven by the bottom line.
Written by Antoine Gara in New York.