The decision released Thursday by Judge Burton Lifland backed the lawsuit brought by trustee Irving Picard in 2009 against the late Beverly Hills financier Stanley Chais, seeking up to $1 billion in profits Chais and his family got from Madoff and other unspecified damages. Lifland denied a motion to dismiss the case.
Picard filed a similar lawsuit in December against Mets owners Fred and Jeff Wilpon and their partners for up to $1 billion, including more than $300 million in profits paid out by Madoff.
In both cases, Picard argues the recipients of Madoff's money should have known he was running a fraud.
"This is a clear sign to the Wilpons that they have not just a rough road ahead, but a very rough road ahead," said Anthony Sabino, a business law professor at St. John's University and bankruptcy law specialist from Mineola. "Lifland has set forth rulings . . . where he has time and again affirmed right of the trustee to bring these [clawback] cases."
"The Wilpons have virtually no chance of getting this case dismissed early," Sabino said.
A spokesman for the Wilpons and their Sterling Equities were unavailable for comment Friday. They have vehemently disputed the contention that they should have suspected Madoff was a crook.