March 19 (Bloomberg) -- The New York Mets owners agreed to pay $162 million to settle a $303 million lawsuit by the liquidator of Bernard Madoff’s firm, just before they were due to go to trial for allegedly ignoring the fraud.
Fred Wilpon, Saul Katz and related defendants reached the settlement with the liquidator, trustee Irving Picard, March 16, U.S. District Judge Jed Rakoff in Manhattan said today.
Rakoff ruled on March 5 that the Mets defendants must give up as much as $83 million in so-called fictitious profits from Madoff’s Ponzi scheme and face a jury trial over an additional $303 million. The main question for the trial was to have been whether the owners acted in bad faith when they withdrew money from the brokerage Madoff used to run his swindle.
The Mets owners opposed a jury trial and tried unsuccessfully to get the remaining claims brought by the Madoff trustee, Irving Picard, dismissed after Rakoff cut them back to $386 million from $1 billion.
Picard’s lawyers had said they were confident a jury would find the Major League Baseball club’s owners deliberately ignored the fraud because it benefited their businesses, ranging from the team to real estate.
The Ponzi scheme cost investors an estimated $20 billion in principal, according to Picard.
Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors called the biggest Ponzi scheme in history. He’s serving a 150-year sentence in federal prison in North Carolina. Picard and his law firm, Baker & Hostetler LLP, have charged about $273 million in fees for liquidating the Madoff firm since it collapsed in December 2008.
The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).