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NEW YORK - (Mealey's) The owners of Major League
Baseball's New York Mets and the liquidation trustee of Bernard L. Madoff
Investment Securities LLC (BLMIS) agreed on March 19 to a $162 million
settlement of claims relating to the defendants' alleged profiting from Madoff's
massive Ponzi scheme (Irving H. Picard v. Saul B. Katz, et al., No.
11-3605, S.D. N.Y.; See January 2012, Page 43).
According to the memorandum of understanding filed
jointly by Picard and the 11 general partners of Sterling Equities, including
Mets owners Fred Wilpon and Saul B. Katz and nearly 50 family members and
related entities, in addition to the $162 million settlement, the parties have
agreed to a release of all further liability.
The defendants will be allowed to pursue their customer
claims against BLMIS and will be entitled to "full recovery" on those
claims. The only exceptions to the customer claims recovery are that the
defendants will not be entitled to an advance of their funds and that their
recoveries "will be assigned" as set forth in the memorandum of understanding.
Picard filed an amended complaint in the U.S. Bankruptcy
Court for the Southern District of New York, alleging that the defendants
violated various provisions of the Bankruptcy Code and the New York Debtor and
Creditor Law. In particular, he claims that the defendants received more
than $1 billion in fraudulent gains from BLMIS as part of Madoff's Ponzi
He sought to recover more than $295 million in allegedly
fraudulent transfers and
more than $710 million in additional fraudulent transfers of principle from the
The defendants moved to dismiss, and Judge Jed S. Rakoff
substantially granted the motion and narrowed certain of Picard's remaining
Picard then moved to have Judge Rakoff certify the three
key rulings in his opinion for interlocutory appeal or at least enter a final
judgment as to those claims that have been dismissed so that they may be
No Final Judgment
Judge Rakoff denied Picard's motion, ruling that he is
not entitled to final judgment or interlocutory appeal of the judge's ruling dismissing
a majority of his claims because granting his requests will only serve to delay
the "ultimate termination of the litigation."
On Jan. 20, the defendants moved for summary judgment,
and Picard moved for partial summary judgment.
Judge Rakoff granted Picard's motion and denied the
defendants' motion in a March 5 order, ruling that Picard may be entitled to
recover more than $83 million from the defendants because he has shown that the
"value" the defendants gave to BLMIS is "equal to the amount of their
Picard is represented by David J. Sheehan, Fernando A.
Bohorquez Jr. and Keith R. Murphy of Baker & Hostetler in New York.
The defendants are represented by Karen E. Wagner, Dana
M. Seshens, Robert B. Fiske Jr. and Robert F. Wise Jr. of Davis Polk &
Wardwell in New York.
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