Bankruptcy Law

Owners of Mets Settle Madoff Suit on Day of Trial After Losing Burden-of-Proof Ruling

The owners of the New York Mets averted a jury trial scheduled for today with an agreement to pay $162 million to settle a suit filed by the Madoff bankruptcy trustee.

The suit had sought $300 million in fictitious profits reaped by the team in accounts held with convicted Ponzi schemer Bernard Madoff. U.S. District Judge Jed Rakoff announced the settlement today, just before jury selection was to begin. Reuters, the Associated Press, CNN and the New York Times have stories.

Trustee Irving Picard had alleged Mets owners Fred Wilpon and Saul Katz had ignored red flags that Madoff was running a fraud, an allegation they denied. Rakoff ruled last week that the burden was on the owners to show they acted in good faith, the New York Times (reg. req.) reported in a prior article. Lawyer Michael Kline of Fox Rothschild told the Times that the decision “shifted the pendulum” in the case.

The $162 million will be paid out of proceeds the owners expect to recover as a “net loser” of the scheme, the Times says.

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