03/05/12 5:19 PM EST
Wilpon, Katz must go to trial in Madoff case
By Anthony DiComo / MLB.com
"We are preparing for trial," Sterling Partners, the team's ownership group, said in a statement. "We look forward to demonstrating that we were not willfully blind to the Madoff fraud."
Federal judge Jed Rakoff had set Monday as a deadline to determine whether a trial was necessary. Now, it is up to a jury to decide whether to award Picard as much as $303 million in principal that Mets owners invested with Madoff. Rakoff has already discarded much of what was once a $1 billion lawsuit, but has ordered Wilpon and Katz to pay up to $83 million in fictitious profits earned through Madoff.
To receive more at trial, Picard must prove that the Mets owners were willfully blind to Madoff's scheme while investing with him.
"The Court remains skeptical that the trustee can ultimately rebut the defendants' showing of good faith, let alone impute bad faith to all the defendants," Rakoff wrote in Monday's decision. "Nevertheless, there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith, depending on which assertions are credited."
Rakoff had originally limited the scope of the lawsuit to $386 million, on the basis that Picard could only recover lost funds from the two years prior to Madoff's arrest -- not the six-year standard that Picard had been seeking. Of that $386 million, the Mets must pay up to $83 million to Picard irrespective of the trial results. The exact amount would be determined in a "subsequent order," according to Rakoff.
The March 19 trial may put an end to some of the speculation that has circled the Mets since Picard sued Mets owners in December 2010. A month after news of the suit broke, Wilpon and Katz announced that they would attempt to sell a minority stake in the team. Hedge-fund manager David Einhorn entered into exclusive negotiations with the Mets in May, but the two sides broke off talks in September, with the Mets unveiling a plan to sell multiple, smaller stakes in team ownership instead.
Wilpon revealed last week that the Mets are close to finalizing seven such sales, including four to partially team-owned cable network SNY. Sterling Partners has also purchased two additional shares to increase the club's liquidity. The Mets ultimately hope to sell a total of 12 minority shares valued at $20 million each, allowing them to pay back $65 million in outstanding loans from Major League Baseball and Bank of America, while also covering operating expenses and expected short-term losses.
"[Fans] shouldn't be concerned about us owning the franchise," Wilpon said last week, "because we intend to own the franchise for a very long time."