Ex-guv seeks settlement in Madoff case

Mets owners Jeff and Fred Wilpon. Mets owners Jeff and Fred Wilpon. Photo Credit: AP, 2010

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Former Gov. Mario Cuomo wants to shift his mediation effort between the owners of the Mets and the trustee for victims in the Bernard Madoff Ponzi scheme into a higher gear.

Cuomo made a surprise appearance at a Manhattan federal appeals court hearing in the dispute Thursday. He separately pulled aside lawyers for the Wilpon family and trustee Irving Picard and was heard requesting that they contact his office Friday to schedule separate sit-downs so he could start mediation in earnest.

"The best thing that can happen is a settlement," Cuomo told Newsday before he talked with the lawyers.

Attorneys for the Wilpons and their Sterling Equities company, as well as Picard's counsel, were in court to argue over whether the trustee is correct in the way he is calculating the value of what investors lost in the Ponzi scheme.

Cuomo, appointed Feb. 10 by a bankruptcy judge as mediator, said he came to court to hear the oral arguments in a "search for information" for his mediation effort. He has yet to sit down with either the Mets owners or Picard, but has received briefs from both sides, said a legal source.

An appeals court ruling by the three-judge panel upholding Picard would weaken the Wilpons' negotiating position, while a decision against the trustee would strengthen it.

Rulings from the Second Circuit Court of Appeals can take as long as a year. If the Mets owners cannot reach a settlement with Picard, they could face a long wait before finding out if the courts will lift the financial cloud hovering over them. Picard is seeking up to $1 billion from Wilpon, Sterling and related entities to return to losing Madoff investors.

The lawsuit has put Mets owners Fred Wilpon and his brother-in-law Saul Katz under financial pressure and led them to put as much as 25 percent of the team up for sale and seek short-term financing from Major League Baseball.

Lawyers for the Wilpons say their accounts should be given the value Madoff reported on his last statement, dated Nov. 30, 2008. But Picard said those statements were bogus and investors like Wilpon and Katz who took profits from their accounts got money Madoff stole from other people. They contend they were victims of Madoff.

While the judges grilled lawyers for both sides, there was open skepticism of the Wilpons' argument. Madoff's figures were "figments of the imagination," said Judge Pierre Leval. Judge Dennis Jacobs questioned whether Picard should be forced to use customer statements made "on whatever amount Madoff made up while chewing on his pencil and looking at the ceiling."

Picard sued Wilpon, Katz and Sterling in December, alleging they received as "net winners" more than $300 million in profits from Madoff's scam and knew or should have known Madoff was running a fraud.

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