Mets settle Madoff claim

The owners of the New York Mets have reached a deal with Irving Picard, trustee for Bernard Madoff’s fraud victims. Mets principal owners, Fred Wilpon and Saul Katz will pay $162 million in a settlement reached Monday, but will make no payments for three years.

Picard had argued that the Mets team owners were aware of Madoff’s corrupt investment scheme, but continued their investments due to their gains.

Before reaching the settlement, jury selection had been set to begin in a civil trial in order to determine how much the team owners would owe Madoff’s other victims.

As part of the deal, Picard will no longer pursue a claim of “willful blindness” against the defendants after reviewing evidence, according to Judge Jed Rakoff.

Rakoff had already ruled that the team’s owners must pay up to $83.3 million for the profits they received from Madoff.

However, another ruling blocked Picard from trying to collect the full $1 billion he sought to recoup after filing hundreds of lawsuits in order to force those who profited from their investment to pay into a fund for Madoff’s victims.

“Although this is something of an anticlimax, it is always helpful and positive when the parties are mutually able to resolve their dispute,” Rakoff said.

Lawyers for Wilpon and Katz insisted their clients had no idea the investment was a sham, and highlighted that that the case has damaged the Mets’ financial picture, forcing the team to slash payroll and raise tens of millions of dollars by selling small chunks of the team.

The deal to delay payment for three years has left the team financially secure, according to Katz.

In additon, the Mets have also repaid loans of $25 million to Major League Baseball and $40 million to Bank of America, and have closed on the sales of 12 limited partner shares for $20 million each, a person familiar with the team’s finances says.

The Mets borrowed the money from MLB in November 2010 after being hampered by the lawsuit, a losing record and decreased attendance. It had been due to be repaid last November, but the time was extended until the end of March.

The loan from bank was taken out last year.

Hedge fund manager David Einhorn had agreed last May to purchase a minority stake for $200 million, but the Mets said in September that were calling off that deal and wanted to sell the $20 million stakes. Five of the stakes were bought by newcomers, and the rest by the current ownership group and its partners in the SNY cable network.