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Thursday, February 3, 2011
Suit against Mets to go public

ESPNNewYork.com

NEW YORK -- A lawyer for the trustee trying to recover money for the victims of the Bernie Madoff Ponzi scheme says negotiations have ended to settle a lawsuit filed against the New York Mets owners and their affiliated companies.

David J. Sheehan, a lawyer for trustee Irving H. Picard, sent a letter to Judge Burton R. Lifland of U.S. Bankruptcy Court in Manhattan on Thursday asking that he unseal the lawsuit filed Dec. 7 against Mets owner Fred Wilpon, chief operating officer Jeff Wilpon, president Saul Katz and dozens of entities and people connected to the Mets and Sterling Equities.

Karen E. Wagner, a lawyer for the Mets owners, said in a letter to Lifland later Thursday that her clients no longer opposed unsealing the suit.

A Feb. 9 hearing had been scheduled on a motion to unseal the suit filed by The New York Times and WNBC.

Sheehan wrote the defendants "have affirmatively taken action to try this case in the press and the court of public opinion."

"Defendants cannot cry confidentiality to this court while publicly attacking the complaint and continuing to frustrate the public's right to know the contents of the same complaint they disparage," he wrote.

Wagner, in her letter, wrote that settlement discussions ended after two unidentified lawyers violated court orders and disclosed confidential information to the Times, which reported last week that the suit sought to recover $300 million in what Picard called "fictitious profits."

"As a result, one-sided and misleading information was publicly disseminated both about the complaint and the defendants," Wagner wrote, adding that the complaint contained "unfounded conclusions." The Wilpons said last week they were exploring a partial sale of the team, a non-controlling interest of 20 to 25 percent, that would raise several hundred million dollars. Fred Wilpon said they made the decision because of uncertainty caused by the suit.

Picard has the leeway to not only go after ill-gotten gains but also can pursue greater amounts depending on what his investigation reveals about the conduct of Madoff clients.

Picard has already recovered about $10 billion from other Madoff clients who the trustee alleged accumulated the funds improperly, according to the Times report.

The Mets maintain that the Wilpons and Katz were unaware that Madoff was running a Ponzi scheme.

Information from ESPNNewYork.com's Adam Rubin and The Associated Press was used in this report.