Mets' owner strikes out with Madoff trustee

CitiField (Feb. 19, 2009)

CitiField (Feb. 19, 2009) (Credit: Newsday File / J. Conrad Williams Jr.)

For Sterling Equities, owner of the New York Mets, the baseball season went down the tubes.

Now some companies related to Sterling appear to be striking out when it comes to getting money back from the Bernard Madoff swindle, according to court records.

Last month the Mets Limited Partnership reported in the Madoff bankruptcy case that trustee Irving Picard had denied its claim "in the entirety."

While records of the U.S. Bankruptcy Court in Manhattan don't give details about the Mets partnership or the size of its original claim, they were signed by a key executive of the baseball team.

Madoff records also give the old Shea Stadium as the partnership address. (Another partnership, Sterling Mets Lp, which is listed in different court records as a team owner, apparently isn't involved in the denied claim.)

The claim denial means that the partnership has lost out on up to $500,000 from the Securities Investor Protection Corp. and on a share of the billions of dollars in assets Picard is finding. The partnership has filed a legal objection to Picard's decision with the bankruptcy court.

A key issue appears to be that the partnership's account with Madoff didn't have a positive "net equity" because it withdrew or transferred out more money than it had deposited, according to court records filed in the bankruptcy case.

In those instances, Picard is routinely denying claims because he says the customers where "net winners" by taking out more money than they put into Madoff's business.

Any excess withdrawals, Picard has said, utilized stolen customer funds. But scores of customers contend the amount listed on their November statements from Madoff, even if fictitious, should be the basis for the payments.

Sterling Equities had scores of accounts on a Madoff mailing list published earlier this year. News reports have claimed Sterling Equities lost as much as $700 million in Madoff's Ponzi scheme and would have to sell the baseball team, something the company denied.

While court records don't give details about Sterling Equities' claims, sources familiar with the investigation who didn't want to be identified indicate it didn't lose money and was able to withdraw about $50 million over what it invested with Madoff.

Under bankruptcy law, Picard could seek to claw back money from Sterling or others took out in excess of deposits. But Picard seems to be going after high rollers like Jeffry Picower, who is being sued for $7.2 billion, an amount that is a big part of the estimated $13 billion to $18 billion fraud. A spokesman for Picard declined to comment.

The role of the Mets Limited Partnership, which is registered in Delaware, in the ownership of the team wasn't spelled out in court papers.

A spokesman for Sterling Equities, the overall owner of the Mets, of which Fred Wilpon is chairman, declined to comment when asked to explain the corporate connections and reports that Sterling Equities didn't suffer financial harm.

But there appears to be a substantial connection between the Sterling business empire and the partnership. Mets Limited Partnership court documents were signed by David Cohen, who is also listed on the team's Web site as general counsel, on behalf of CDS Corp., the general partner. CDS  is a New York corporation formed in November 1986 of which Fred Wilpon is president, state records show.

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