Both men, according to a source familiar with the talks, said the federal lawsuit against them by Irving Picard, the bankruptcy trustee in the Bernard Madoff case, amounted to character assassination, and they weren't interested in a settlement. At that point, Cuomo, who had been appointed mediator by a bankruptcy court judge, had no illusion his job would be easy.
What a difference a year and the imminence of a trial can make.
"When you get to this, the moment of truth, that new urgency is the push that gets them over the line," Cuomo said. "The closer you get to reality of the trial, the more you feel the dangers, the heat coming off it."
About 10 days ago, he called Wilpon and Katz again into his office at Willkie Farr & Gallagher in Manhattan for a frank talk. "They came. I spoke to them, I simply made the pitch. 'This is your last chance,' " recalled Cuomo. Then, in the past week lawyers for Picard, Wilpon and Katz started to hunker down for some serious deal making. Each knew a trial had risks.
"Number one, they may lose. Number two, they may win and then face an appeal. Number three, in either case it's going to cost a fortune," Cuomo said. Lawyers for Picard and the Mets owners swapped proposals and counterproposals through Cuomo, his partner Brian E. O'Connor and firm associate Emma J. James. At times, opposing lawyers talked directly by phone.
What solidified the deal for Wilpon and Katz was Picard's willingness to drop his claim they were willfully blind to Madoff's fraud, an allegation that stung them deeply -- and could have cost them $303 million in damages if it stuck. "That decision removed from the defendants that sword of Damocles that was hanging over their heads and getting closer and closer to their neck," Cuomo said.