The Mets owners are attempting to move their bitterly fought dispute with the trustee in the Madoff case out of bankruptcy court and into federal district court, which could buy them some time in their $1 billion legal fight.
In papers filed in Manhattan bankruptcy court, attorneys for the Wilpons said the clawback case started in December by trustee Irving Picard was "rife with false allegations" that contradicted evidence gathered early on. But more importantly, Picard's lawsuit should be moved over to federal district court because the case involves "significant questions" about the interaction between the securities investor protection and bankruptcy laws, the Wilpon court filing stated.
The legal maneuver was seen by one attorney involved in the Madoff case as a move to get the Wilpon lawsuit away from the bankruptcy court where Picard has won so many legal victories.
"The Wilpons are trying to get to a neutral playing field," said attorney Jerome Reisman of Garden City, who represents other Madoff investors. Similar transfer requests by JPMorgan Chase and HSBC banks succeeded earlier this year, he noted.
The new filing to the district court will chew up more time as the Wilpons and Picard try to mediate the case to a settlement before former Gov. Mario Cuomo, said Reisman.
Picard sued the Wilpons in December, claiming up to $1 billion, including about $300 million in Madoff profits, that he wants to claw back.
Bankruptcy attorney Howard Kleinhendler, who represents other Madoff clients, was skeptical the Wilpon legal gambit would work.
"I think it is a tough motion because the trustee is doing garden variety bankruptcy work," said Kleinhendler.
Reisman agreed and thought Picard might be allowed to handle the $300 million clawback case in bankruptcy court and litigate the rest with a federal district judge.
A spokesman for Picard declined to comment Thursday.