Friday, September 23, 2011
Ruling coming on $1B suit vs. Mets?
By Adam Rubin
NEW YORK -- U.S. District Court Judge Jed S. Rakoff is expected to issue a ruling as soon as Monday on whether to toss all or part of a $1 billion lawsuit against New York Mets owners, according to two people familiar with the case.
Trustee Irving Picard is suing Mets principal owner Fred Wilpon, brother-in-law Saul Katz and other family members as well as associated businesses and charities, seeking to recover the money to distribute to victims of convicted swindler Bernard Madoff's Ponzi scheme.
Picard seeks $300 million in alleged "fictitious profits" -- money withdrawn over the amount invested from certain Madoff-invested accounts. He also seeks $700 million in principal from the Wilpon family, alleging they were sophisticated investors who had warning signs that a potential fraud was occurring.
Rakoff seemingly set a high bar for the latter claim, leading legal experts to believe the $700 million portion could be thrown out while the $300 million portion would remain on the table for a trial in March.
The standard the judge articulated for recovering the $700 million "should have known" part during a hearing last month was: "You purposely turn away from learning something because you knew there was a high probability that you would learn something bad."
Once Rakoff's decision is announced, the sides then could have more serious settlement talks because the amount at stake would be more clearly defined.
Former New York governor Mario Cuomo has been appointed to mediate the dispute.
Adam Rubin covers the Mets for ESPNNewYork.com.