Wilpon's are familiar with these Lawsuits

[Giantmetfan07]

New York Times -- But for the owners, Fred Wilpon and Saul Katz, it is not the first time they have had their names and personal fortunes roughed up in a Ponzi scheme. An investment firm started by the two men had to pay back nearly $13 million two years ago when a hedge fund run by the scion of a wealthy New Orleans family collapsed in what was then regarded as one of Wall Street’s more brazen frauds.

The $13 million figure — modest when set against the damage the owners of the team face in the Madoff case — still made the firm one of the biggest losers in the $450 million scheme orchestrated by Samuel Israel III, and it turned out to be the largest settlement to date among investors who withdrew money from the fund. Israel, who is serving a 22-year term in federal prison, tried to avoid being incarcerated by faking a suicide in July 2008.

The firm Wilpon and Katz started, Sterling Stamos, was accused of having withdrawn money from a fund run by Bayou after detecting evidence of possible fraudulent activity. The firm took out nearly all of its $30 million from the fund months before it collapsed.

And that is, in both respects, exactly what the trustee for Madoff victims is doing to Wilpon and Katz now. According to two lawyers involved in the case against the Mets, the trustee, Irving H. Picard, argued in a lawsuit filed in December that the history of Wilpon and Katz’s dealings with Madoff meant they knew or should have known it might be a scheme, and that, as a result, other victims were entitled to hundreds of millions of dollars above and beyond what Wilpon and Katz might have made as profits. “Some of the legal principles adopted in Bayou are the same ones that the trustee is applying,” said Richard Kirby, the lead lawyer for the creditors committee in the Bayou case.

Interesting article here. In simplest terms for those who don't want to read all of that, which I quoted just a small sample of the entire article -- The firm Sterling Stamos, run by Wilpon and Saul Katz had invested in a fund run by Samuel Israel III, which resulted in a pretty big ponzi scheme 2 years ago, and when they realized it was fraudulent they pulled their money out before all hell broke loose, and eventually got into a similar situation they are in now -- the trustee to recover the money went after them accusing them of knowing it was fraudulent and still keeping the money. They ended up settling for $13M.

The number now they are being sued for in the Madoff scheme is in the hundreds of millions, we assume. They profited $48M from Madoff when they pulled the money weeks before the scheme hit public, and had supposedly originally invested $523M, meaning they withdrew $571M -- 5 bucks says I got that math wrong, haha -- and now they could be facing a situation where they settle for like... i dont know... $250-$300M, depending on how much the Trustee is going after them for.



The big thing for the Mets, is February 9th -- that is the day that a federal judge will decide whether the documents remain sealed -- For some reason, and it is rare that this happens, when the lawsuit was brought against Sterling Equities in December the documents were sealed, and really the only logical reason that would happen is if there were trade secrets and confidential business information in the documents, that would jeopardize their business altogether.

I was listening to WFAN this afternoon and one caller said that a way to think of it is -- if a Lawsuit was brought against the Coca Cola Company, and the court documents contained information on how they make their Coca Cola, yada yada more important financial and business stuff, then it would make sense to seal the documents.

And now, February 9th is that big day since the New York Times and WNBC Channel 4 have filed a motion to unseal the court records relating to this case.



gonna be interesting... but all in all, I feel bad for the Wilpons. If this is as bad as we think it is, then the Wilpons will probably not own even 50% of the team in two years from now, and after the hundreds of millions they've put into the team over the last 6 or 7 years now, and after creating the SNY Network and forking hundreds of millions into building Citi Field, now because of Bernie Madoff, they might not own any of it in the near future.