The Mets-Madoff Settlement: Give the Judge an Assist
With much media coverage, the Mets’ ownership settled their case with bankruptcy trustee, Irving Picard, who represents the victims of the Bernie Madoff scam. At first blush, the settlement appears somewhat favorable for the Mets owners as they were given 3 years to pay a reduced amount.
The detail that did not get much media notice is how Judge Rakoff made this settlement the inevitable outcome. When Judge Rakoff ruled that Picard couldn’t recover the astronomical sum of $1 billion from the Mets’ owners for their alleged knowledge of Madoff’s fraud and held that the most the Mets could pay was $303 million, the court set a financial “ceiling.” In turn, when the court ruled that the Mets owners were on the hook for at least $83 million in fictitious profits, the judge set a financial “floor.”
With a ceiling and floor built by the court, all the parties had to do was to choose a number in-between and that’s precisely what occurred. Once the court boxed the parties into a settlement range, the was no incentive to “roll the dice” on an expensive trial with an uncertain ending.
My name is Christopher Fusco. I am the managing partner of Callahan & Fusco, LLC with offices in New York, New Jersey, and Pennsylvania.