MANHATTAN (CN) – The owners of the New York Mets may have to pay $83 million to the victims of Bernie Madoff’s Ponzi scheme, a federal judge ruled Monday.
Irving Picard, the court-appointed trustee of seized Madoff assets, has accused Mets owner Saul Katz and others of making up to $386 million by “willfully blinding” themselves to the $65 billion fraud.
As the Mets and Picard prepare to go to trial, the parties submitted dueling summary judgment motions. Picard said U.S. District Judge Jed Rakoff should order the Mets to release $83 million in illegal profits, and the Mets owners said the court should toss the charges completely.
Rakoff partially granted Picard’s request on Monday, deferring a decision on how much Katz must pay.
“The trustee’s motion for partial summary judgment is granted, because the court concludes that the ‘value’ the defendants gave to Madoff Securities – and therefore the amount that they received from Madoff Securities during the applicable two-year period that they can withhold from the Trustee under § 548(c) unless the trustee shows bad faith – is equal to the amount of their investment,” the four-page order states. “But the exact amount thereby due the trustee (though capped at the $83,309,162 that the trustee expressly seeks on this motion), and how payment should be apportioned among the defendants, will be determined in a subsequent order and may require further briefing and oral argument.”
Rakoff would not let Katz and company off the hook for the remaining charges, but he asserted that the claims they are defending contain more “bombast” than “bombshells.”
“The defendants’ motion for summary judgment is denied, though the court remains skeptical that the trustee can ultimately rebut the defendants’ showing of good faith, let alone impute bad faith to all the defendants,” Rakoff wrote. “More generally, the court is concerned that much of the ‘evidence’ that the parties proffered on summary judgment did not comport with the Federal Rules of Evidence and therefore is neither cognizable on these motions nor admissible at trial. Conclusions are no substitute for facts, and too much of what the part is characterized as bombshells proved to be nothing but bombast. Nevertheless, there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith depending on which assertions are credited.”
Spokespeople for Picard and the New York Mets did not immediately reply to requests for comment.
Trial is slated for March 19.
Sterling Partners, the group that owns the Mets, played down the significance of the decision.
“We are preparing for trial,” the group said in a statement. “We look forward to demonstrating that we were not willfully blind to the Madoff fraud.”