Major League Baseball

Mets want Madoff docs to stay sealed

Published Feb. 1, 2011 12:00 a.m. ET

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The New York Mets’ owners asked a federal bankruptcy judge Monday to keep sealed a lawsuit by the trustee seeking to recover money for victims of Bernard Madoff’s fraud.

Irving Picard, the Madoff trustee, sued Mets principal owner Fred Wilpon and his real-estate investment firm, Sterling Equities Associates, in December.

Sterling Equities and its partners, including Wilpon, are among the “net winners” whom Picard claims withdrew more than they originally invested with Madoff.

On Friday, Wilpon said the team’s owners may sell a minority stake in the baseball team in order to remove uncertainty about funding its operations in light of the Madoff litigation. The team’s owners also may seek additional financing.

“Continued sealing of the Sterling complaint would enable the parties to continue with what have been, up to this point, good faith settlement discussions by both sides,” said Karen E. Wagner, a lawyer for Wilpon and the Sterling entities, in court papers filed late Monday.

The lawsuit is seeking to recover money from nearly 100 individuals, family foundations or entities associated with Sterling Equities, including several limited partnerships associated with the Mets. Several media organizations have moved to unseal the complaint.

A person familiar with the matter said that Picard is seeking more than $300 million that the Sterling entities and related people withdrew from Madoff’s firm above their principal investment. On top of that, the trustee is also seeking to recover some of their principal investment, alleging they knew or should have known the business was fraudulent, this person said.

Picard under federal bankruptcy law also could claim any principal withdrawn from those accounts in the 90 days before the December 2008 bankruptcy filing of Madoff’s firm, but it was not known whether such withdrawals were made or how much they might represent.

In court papers, Wagner said Picard has tried to paint the Mets owners and other Sterling defendants as persons who should have known that Madoff did no trading. She called the allegations “baseless” and “attempted character assassination.”

Wagner also raised concerns about leaks to the media regarding some details of the lawsuit.

Madoff, a longtime friend of Wilpon, is serving a 150-year prison sentence after admitting in 2009 to running a multibillion-dollar Ponzi scheme that lasted for decades.

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