Mets baseball team settles in Madoff lawsuit

The hotly awaited trial to determine whether the owners of the New York Mets baseball team should give up $303 million earned from Wall Street fraudster Bernard Madoff ended Monday before it had begun. Under a last-minute settlement, the defendants agreed to pay back $162 million over the next five years, while the official trustee pursuing them will abandon his lawsuit, Judge Jed Rakoff announced in Manhattan federal court. The lawsuit alleged that the Mets owners must have known Madoff was a cheat when he paid huge returns from what was in fact a multibillion dollar Ponzi scheme and that they deliberately turned a blind eye. Under the settlement the trustee "will no longer pursue the willful blindness claim against the defendants," Rakoff said. The deal was unveiled in a packed courtroom all ready to go to trial. Mets co-owners Fred Wilpon and Saul Katz, whose financial situation at the troubled Major League Baseball club is as rocky as the players' performance, were visibly relieved. The settlement also mandates that the two sides, locked in bitter dispute until now, bury the hatchet, saying "all parties agree not to make any disparaging statements" about each other. "All I can say is love is wonderful," a jovial Rakoff commented. The deal saved the Mets owners millions of dollars and may also have saved the Madoff trustee, Irving H. Picard, from costly failure. Picard, who is about halfway toward his stated goal of recovering some $20 billion in funds from former investors with Madoff, originally wanted to squeeze $1 billion from the Mets. The money Picard gathers will be paid out to investors deemed to have been victims of Madoff's scam. But before the settlement deal, Rakoff had limited Picard to an initial sum of $83.3 million, which the Wilpon family must pay back, and gave him the opportunity to persuade a jury in the civil trial that another $303 million had to be returned. Rakoff had said he was "skeptical" about Picard's chances of proving the alleged "willful blindness" by Wilpon and Katz. A pillar of Wall Street investors, Madoff handled huge sums of money for a Who's Who of the wealthy and powerful, ranging from international banks to Hollywood stars, and a host of institutions and individuals from his Jewish American community. Bringing clients steady returns whatever the wider economic situation, Madoff earned the reputation of financial miracle worker. However, instead of making real profits, he was simply taking money from new investors to divide up and pay to existing clients, a scheme that worked until the stock market crash of 2008 prompted a cascade of redemption requests. While court proceedings had been expected to revolve around the dry details of financial dealings by the Mets before Madoff's 2008 arrest and implosion of his pyramid scheme, the scheduled trial stoked widespread public interest in a city obsessed with baseball and finance.