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.
- The State of the Trade Deadline: Yesterday was pretty sleepy. Will general managers wake up today? 7
- Cardinals acquire Justin Masterson from Indians 48
- There’s a “very good chance” the Red Sox trade Lackey and Lester 53
- Hey, Rube: Phillies pay dearly for Amaro’s misguided loyalty 89
- And That Happened: Tuesday’s scores and highlights 57
- Dodgers announce Vin Scully will return for 2015 season 52
- Jon Lester scratched Wednesday amid trade speculation 38
- Rays are “talking and willing” to trade ace lefty David Price; Cardinals and Dodgers interested 41
- Expert’s Corner: How to troll fans of all 30 teams (201)
- “Caucasians” t-shirts are hot sellers on Canadian Indian reservations (199)
- Rangers’ retirement gifts for Derek Jeter: Yankees cowboy boots, signed George W. Bush photo (108)
- Must-click link: sexual depravity — and possibly rape — in the minor leagues (105)
- The Nationals and Orioles dispute over TV money is about to explode (104)