NY judge gives formal approval to Madoff-Mets deal
Friday, June 1, 2012
NEW YORK (AP) — A federal judge on Thursday approved the settlement of a lawsuit brought by a trustee for Wall Street swindler Bernard Madoff's victims against the owners of the New York Mets.
U.S. District Judge Jed Rakoff in Manhattan approved the deal after asking at a settlement hearing whether anyone objected and getting no response. He noted there were no written complaints filed after the deal was announced in March just before jury selection for a civil trial was to begin. He said the deal "appears to be a fair settlement."
The settlement calls for the Mets' owners to pay up to $162 million but nothing for four years. The deal was structured so the owners will likely pay much less than the maximum depending on what happens to their claims against Madoff's estate.
The judge said his only real decision was whether approving the deal was "worth giving up having Sandy Koufax in this courtroom." The retired Hall of Fame pitcher, a star for the Brooklyn Dodgers and the Los Angeles Dodgers, was among possible witnesses at a trial that threatened to bring negative publicity to the Mets just as they were about to start their new season.
Trustee Irving Picard, appointed by the court to recover money for victims of Madoff's massive Ponzi scheme, had originally sought $1 billion from the Mets' owners, saying they met regularly with Madoff and profited from their association at the expense of other investors.
Madoff is serving a 150-year prison sentence in Butner, N.C., after revealing in December 2008 that he cheated thousands of investors of roughly $20 billion for years, using money from new investors to pay returns to existing clients.
The agreement promises that neither side will disparage the other and that Picard will no longer accuse the Mets' owners of being "willfully blind," a legal term that was going to require him to prove they knew or should have known about the fraud but chose to ignore it. The litigation could have forced the team's owners to pay up to $383 million.
The deal was shaped so that the team's owners could owe much less than the $162 million they received in fictitious profits in the six years before Madoff's fraud was revealed.
The agreement calls for the sum to be reduced by money that would otherwise be paid for $178 million in losses claimed on behalf of dozens of accounts held in the name of defendants in the action against Sterling Partners, a business entity that includes the Mets' owners, along with real estate, sports media and private equity interests.
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