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Monday, March 19, 2012

Megdal: Wilpon group settles with the Madoff victims, freeing them to deal with more pressing debts

What life should be like! Even Francesspool popped a screw-top!

Compared to a bankruptcy and a messy court fight lasting years, the settlement provides significant value, and even lets the trustee marshal his resources elsewhere. That the $162 million ultimately comes from the pool of Madoff net losers should be vaguely galling to the actual net losers, since it means they are paying for Wilpon’s inability to pay. But it is after all the trustee’s responsibility to maximize returns for the victims, not settle scores.

One relevant question now is whether other potential investors were scared off by the Picard lawsuit, in which case they might hypothetically feel differently about investing in the team, or if the enormous financial burdens facing the current owners still make the proposition a nonstarter. After all, it’s still not a great deal, at least in money terms: They’re being asked to put up $20 million, with a nominal return of three percent annual interest and no option to cash out until 2018.

The answer to that question should come soon enough, either through a finalizing of those minority ownerships, or a bankruptcy triggered by Wilpon and his partners’ failure to pay one upcoming obligation or another. But a trial, which might at least have provided some finality to a saga that has gone on for far too long in the eyes of Mets fans—it was scheduled to end on April 3, just two days before the Mets begin the season by hosting the Braves—has been averted.

Picard is now out of the picture. Apparently pursuing justice on behalf of one brutalized constituency was enough for him.

Repoz Posted: March 19, 2012 at 04:53 PM | 7 comment(s) Login to Bookmark
  Tags: business, mets

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   1. asinwreck Posted: March 19, 2012 at 06:21 PM (#4084661)
Two questions.

Any chance the court does not approve this agreement?

Can the Wilpons cover $162 million and maintain ownership of the Mets?
   2. HowardMegdal Posted: March 19, 2012 at 06:30 PM (#4084668)
Two answers:

Very little.

They won't have to pay much of the $162 million, in all likelihood, and what they do have to pay won't be for many years. The threats to their ownership- and there are plenty- come in other debts, short-term and long-term.
   3. Adam Starblind Posted: March 19, 2012 at 09:07 PM (#4084748)

Very little.

Underscore that. Rakoff's attempt to stop the controversial settlement between the SEC and Citibank was all but reversed last week and should be completely killed in the near future. He's not going there.
   4. SteveF Posted: March 19, 2012 at 10:22 PM (#4084804)
Rubin is tweeting that the Mets have sold 12 minority shares at $20 million a pop, and paid back $65 million in loans from BoA and MLB.
   5. Adam Starblind Posted: March 20, 2012 at 07:42 AM (#4084924)

In addition, the settlement explicitly states that the amount arrived at represents a six-year standard of recovered money. That is vital for the trustee in approximately 250 other cases involving net winners. The difference between the trustee being able to reach back two years, a standard Rakoff alone came up with in the Wilpon case, and the six years the U.S. Bankruptcy Code prescribes, is worth approximately another $6 billion into the Madoff victim fund.

Doesn't Rakoff's ruling still control in the In re Madoff proceeding? Has Rakoff agreed to vacate that opinion?
   6. Adam Starblind Posted: March 20, 2012 at 08:19 PM (#4085624)
Ok, I'll open it to the floor. I really am curious, as for all I know he's right - does anyone know why Howard thinks Rakoffs rulings up to this point cease to operate on In re BLMIS Securities?
   7. Adam Starblind Posted: March 27, 2012 at 09:29 PM (#4090757)
Hello??? ello?? ello? elo? MEGDAL? egdal ... egdal ... egdal ...

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