Sep 27, 2011, 5:50 PM EDT
The judge has issued a ruling in the bankruptcy case involving the Fred Wilpon, Saul Katz and the Bernie Madoff fraud. Full reports aren’t out yet, but it sounds like a bit of a mixed-bag, but generally good news for Wilpon and the Mets:
- Good news for Wilpon and the Mets: all but two counts brought by the bankruptcy trustee, Irving Picard, have been dropped;
- Bad news for Wilpon and the Mets: one of the two claims that remain — fraud — could, theoretically speaking, still leave them on the hook for a $1 billion liability, should the trustee prove his case;
- Good news for Wilpon and the Mets: there appears to be a higher burden of proof placed on the trustee than he had originally sought in order to make such a recovery: he has to prove that “the defendants willfully blinded themselves to Madoff Securities’ fraud” as opposed to having to show that they could have been aware of it had they exercised good judgment.
There is still risk here, but the risk of the massive, Mets-killing award of $1 billion is much lower, because the trustee will have to show some serious bad acts on the Wilpons’ and Katz’s part in order to get there, not just that they were generally unaware. And while, yes, there are many people who are skeptical that sophisticated business people like Wilpon and Katz had no reason to investigate Madoff’s investments further, there hasn’t been any suggestion that I’m aware of that they ignored actual evidence that a fraud was afoot and played the see-no-evil, hear-no-evil trick with respect to it.
So where does that leave things? Both sides seem to have risk here. The trustee has had most of his case blown away and, while there still exists the potential for a home run, it’s no sure thing at all. The Wilpons still have that giant potential liability there, but it’s not imminent. This is generally where parties to a big money suit take a step back and try to settle. It might be the best course for both parties here.
- MLB suspends Jonathan Papelbon seven games for incident during Sunday’s game 14
- VIDEO: Jacob deGrom begins game with eight straight strikeouts to tie MLB record 4
- Bud Selig says MLB and players union will meet this week about domestic abuse policy 4
- And That Happened: Sunday’s scores and highlights 67
- Cuban slugger Yasmani Tomas to command $100 million? 29
- Bruce and Brett Bochy make MLB history 29
- Settling the Score: Saturday’s results 17
- Zack Greinke homers, Dodgers demolish the Giants 17-0 at AT&T Park 20
- Chris Davis suspended 25 games for amphetamine use (92)
- A few thoughts about the discrimination lawsuit against the Mets (91)
- Giancarlo Stanton diagnosed with multiple facial fractures and dental damage (91)
- Bud Selig can’t remember the last domestic violence incident in Major League Baseball (87)
- A couple of initial thoughts on the Chris Davis suspension (83)