New York Mets owners and Bernard Madoff lawyer call halt to legal battle

http://www.guardian.co.uk/business/2012/mar/19/new-york-mets-bernard-madoff-lawyer

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A courtroom battle between the owners of the New York Mets baseball team and lawyers representing the victims of Bernard Madoff's massive Ponzi scheme was narrowly averted as the two sides settled on the courtroom steps.

The trial between Irving Picard, the trustee representing Madoff's victims, and Mets owners Fred Wilpon and Saul Katz had been due to start Monday. Picard had originally sued for $1bn and had accused the pair of "willfully blind" to Madoff's fraud. Charges they vehemently denied.

The $162m settlement is a victory for the Mets' owners, who have settled for a fraction of Picard's claim and faced a costly and potentially embarrassing court case as their team faces its own financial woes. Picard also withdrew the charge of willful blindness.

Outside the court Katz and Wilpon told reporters they were "very pleased" with settlement. "Now I guess I can smile," Wilpon said.

Wilpon, Katz and their families and businesses will now be eligible to receive up to $178m from the billions Picard collects from the investors who made money with Madoff. Their share will be credited toward the $162m settlement, making it unlikely they will ever face an out-of-pocket expense.

"Settlement terms are reached to create the maximum recovery for the BLMIS [Bernard L Madoff Investment Securities] Customer Fund, taking into consideration factors such as the vicissitudes of time-consuming litigation and the financial situation of the parties involved," David Sheehan, legal counsel to Picard, said in a statement.

A jury trial would have been high risk for both sides. The Mets have lost $121m in the last two seasons and their best player, shortstop Jose Reyes, was poached by the Miami Marlins. The team owes more than $400m to various banks as well as $25m to Major League Baseball. Takeover talks with hedge fund manager David Einhorn failed last year.

Despite a series of big wins, Picard has struggled to secure claims in recent months. Last year a judge rejected billions in dollars of claims Picard had filed against UBS and JP Morgan, leaving the trustee to pursue smaller settlements with the banks.

Mario Cuomo, the former New York governor, played a prominent role in mediating the settlement.