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The new Madoff-Wilpon judge makes the Mets’ prospects look a whole lot brighter

Jul 7, 2011, 9:33 AM EDT

Fred Wilpon, Jeff Wilpon

I missed this in all of the McCourt crap last week — I really do only have so much brain space for legal/financial baseball news — but the case against the Wilpons and Saul Katz was moved from bankruptcy court into regular old court court, which was what Wilpon and Katz had wanted.

And better yet, the judge handling it all, The Hon. Jed Rakoff, said a number of things from the bench suggesting — and it’s only suggesting — that he may view the Wilpons’ duty to inquire into whether Bernie Madoff was running a Ponzi scheme to be far less encompassing than the bankruptcy trustee, Irving Picard, has suggested.

Today there is a profile on the new judge in the New York Times — a maverick of sorts — that may hold even more good news for the Mets:

“I can’t guarantee this, of course, but my tendency is to try to get quick decisions,” he said during a hearing last week in which he evinced, at least for the purposes of the legal argument before him, a fair amount of sympathy toward the team’s owners, Fred Wilpon and Saul Katz …  He suggested that in accusing the owners of being “willfully blind” to the possibility that Madoff was a fraud during their many years of investing with him, the trustee might be holding them to an unfair standard.

Quick and favorable? Boy howdy, would that change things for the Mets, wouldn’t it?

  1. shaggylocks - Jul 7, 2011 at 9:48 AM

    Thank god. Picard was really trying to make Wilpon out to be an evil bastard, and Fred’s too much of a good guy for that.

    • paperlions - Jul 7, 2011 at 10:25 AM

      There is quite a gap between “willfully blind” and “evil bastard”. According to multiple documents, multiple sophisticated and knowledgeable sources told the Wilpon’s that Madoff had to be running a scheme because the numbers didn’t add up. If multiple companies tell you a guy you are heavily investing with is running a scam, and you don’t thoroughly check him out (which they did not) then you are being willfully blind. If Madoff was running a scheme, they didn’t want to know….which is bad enough….but to continue to recruit investors when you have been warned and not heeded the warning (and without informing those you are recruiting about the warnings, which you failed to check into) is just being reckless with other people’s money.

      I don’t think Wilpon is evil. He seems like a nice enough guy. He just didn’t want to find out that his thing that was too good to be true was in fact not true. He gambled and lost, but other people that didn’t know they were gambling also lost because of him. He should feel like a giant asshole.

      • dohpey28 - Jul 7, 2011 at 12:00 PM

        I don’t like Wilpon & Son the owners, however holding them responsible for not blowing the lid of Madoff when the SEC, foreign governments that invested with him and many many more powerful people then Fred didn’t find and/or say anything is a joke.

      • chrisny3 - Jul 7, 2011 at 12:36 PM

        You are wrong. There are no contemporaneous documents in which someone warned the Mets owners that Madoff was a “scam.”

        You bought into Picard’s BS hook, line and sinker. Which is understandable given the outstanding PR job he did, with help from many in the media.

      • paperlions - Jul 7, 2011 at 1:13 PM

        Honestly Chris, it is easy to buy into the claims Picard makes because they are much more consistent with facts coming to light than is anything said by the Wilpons. One by one, each of their public claims has been proven to be untrue, either because they were lying (the claim that Madoff monies were not tied into the daily operation of the Mets) or because they were simply wrong (that they would not have to sell a portion of the team).

      • chrisny3 - Jul 7, 2011 at 1:32 PM

        paperlions, regardless of what you thought of the Wilpons previously, you should read the facts of the case with a more open mind, I think that is impossible for you.

        As for the Mets owners saying they would not have to sell a part of the team, they said that before the overreaching lawsuit was filed against them. So at the time they said it., it could have been true. Circumstances change.

    • bignick1063 - Jul 7, 2011 at 10:37 AM

      He might be a good guy, but, he isn’t a good owner. Mets will continue to struggle with Fred and his son running the show.

  2. chrisny3 - Jul 7, 2011 at 12:33 PM

    I was wondering if Craig was ever going to comment on this latest development since he’s been all over the Madoff-Wilpon story since the beginning. Not surprised it took this long to show up, since it’s clearly a victory – albeit small and preliminary – for the Wilpons.

    Thankfully Rakoff is a judge who appears to have a strong record when it comes to fairness and credibility, and he won’t take crap from the Picard side the way Lifland would.

    I’ve always predicted that Picard will lose on the “should have known” part of his suit – if not early on then at least on appeal. While much still has to be decided, now it seems more likely than ever that Picard’s 700 million fraudulent reach will end up to be a failure.

    But I’m sure Picard is still happy because, win or lose, he has made a huge huge personal fortune billing SIPIC for his overreaching lawsuits which virtually guaranteed lengthy litigation – and a very happy retirement for him.

    • Craig Calcaterra - Jul 7, 2011 at 12:35 PM

      As I said in the post, I didn’t ignore it. I simply missed it. If you’d like to think I have an agenda against your favoritest owners in baseball, feel free to think it, but it’s not true.

      • chrisny3 - Jul 7, 2011 at 12:39 PM

        Somehow I think if it had been a ruling as significant as this but against the Wilpons, you would not have missed it.

      • Craig Calcaterra - Jul 7, 2011 at 12:40 PM

        And somehow I think that if it had been against the Wilpons you wouldn’t have shown up in the comments after such an extended absence.

        BTW: Nice going on your prediction that the Wilpons wouldn’t have to sell a chunk of the team with an option for majority ownership.

      • chrisny3 - Jul 7, 2011 at 12:43 PM

        And they are far from my “favoritest” owners. I just hate the way they have been unfairly persecuted by an out-of-control, greedy (for his own pockets) trustee who was aided by the media in his defamatory PR campaign.

      • chrisny3 - Jul 7, 2011 at 12:51 PM

        “And somehow I think that if it had been against the Wilpons you wouldn’t have shown up in the comments after such an extended absence.”

        I believe I’ve been here for every major development in the Wilpon-Madoff story — which up until now has been mostly negative. So I’ve not shied away from bad news.

        “BTW: Nice going on your prediction that the Wilpons wouldn’t have to sell a chunk of the team with an option for majority ownership.”

        Ahhh, go back into your archives and read again, Craig. I was always very very clear about my prediction, saying there would be no option for guaranteed majority ownership such as the one you had been referring to. And I ended up to be right there too (pending final approval and release of details of the deal). From what has been reported so far there is NO guaranteed route to majority ownership.

        If you need me to go back into the archives and find the actual quote for you, just let me know.

      • Craig Calcaterra - Jul 7, 2011 at 12:57 PM

        Oh, no need for that. You’re always very careful at using precise language, which you value far more than actual meaning or belief. So I’m certain you said what you’re saying you said.

        But it was also clear that you believed that the Wilpons would be beating off would-be minority owners with a stick and would be able to make a very favorable deal for themselves. And in fact, as far as we can tell at this point anyway, they have given Einhorn either an option to buy controlling interest in the team for a buck or, if the Wilpons pay him back, he will still retain a nice chunk — 17 percent of the team last I saw — for absolutely nothing.

        Not exactly the kind of deal one makes in the seller’s market you described.

      • chrisny3 - Jul 7, 2011 at 1:06 PM

        No, the reason I have been very precise with my words is because my statements are sliced and diced and have tended to be misrepresented so I want to make absolutely clear in this forum that I say what I mean. And in that instance and all others, I have been saying exactly what I mean.

        As for the potential buyers for the Mets, according to reports, there were over 24 initial suitors and 12-14 names were eventually passed on to MLB for additional vetting. Of those, at least 4 or 5 parties made eventual bids or were in the bidding process/final stages. Of those, the Mets owners selected Einhorn to be the eventual minority partner. Nothing from what has been reported leads me to think there was anything but a robust bidding process going on.

        As for the actual deal, do you really think forgoing the type of profits that Einhorn can make investing $200 million for 5 years in the type of hedge funds he himself operates is nothing? Really???? Seems to me that type of compounded profit is a big hefty chunk of change.

      • Craig Calcaterra - Jul 7, 2011 at 1:10 PM

        Sure, if it can get him either (a) a 17% stake of a valuable MLB team for $0; or (b) majority control of said valuable MLB team for $200,000,001.

      • chrisny3 - Jul 7, 2011 at 1:15 PM

        And by the way, I never predicted the Wilpons would be able to make a “very favorable” deal for themselves.

        What I predicted was that there would be NO guaranteed route to majority ownership, that SNY would not be a part of the deal, and that they would eventually be able to find a minority partner and wouldn’t have to sell over 49% of the team. I was right on all 3 counts.

        How you want to characterize the outcome is your choice. I tend to think that both sides got a good deal.

      • chrisny3 - Jul 7, 2011 at 1:26 PM

        “Sure, if it can get him either (a) a 17% stake of a valuable MLB team for $0; or (b) majority control of said valuable MLB team for $200,000,001.”

        But it won’t have cost him nothing because of the profits he would forgo investing $200 million for 5 years. For a truly sophisticated investor like Einhorn that could amount to an additional $200 million or more in returns (assuming a conservative 15% compounded annual return for 5 years).

        BTW, the penny buyout cost has been disputed, but even if it were real, again, that cost to Einhorn of lost returns on $200 million is quite significant.

  3. jimbo1949 - Jul 7, 2011 at 2:27 PM

    The main protaganist in this whole sad, sorry affair Madoff with billions; now how much is this new judge gonna Rakoff?

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