Yesterday, a U.S. District Court judge ruled that the Mets owner Fred Wilpon, along with his family holdings and all the rest of it, will indeed face trial March 19 over the matter of Madoff and the trustees and all that money. This is a confusing situation, with amounts of money unfathomable to normal humans, so we thought we’d try to break down the decision and its ramifications for you this morning, old-school style: with an FAQ.
So, kids ... [turns chair around, faces class] ... let’s rap. Whaddya got for us?
What does the $83 million the judge ordered them to pay mean? Is that just an ante or something? What’s the significance of that amount?
Judge Jed Rakoff ordered the Wilpons to pay $83 million before they even head to trial; no matter what happens in that trial, they have to pay it. But that sounds worse than it is. Frankly, $83 million is peanuts in the grand scheme of matters. If all the Wilpons have to pay in this mess is $83 million, they will have won. That $83 million represents the amount of profit the Wilpons made from Madoff; remember, they actually did all right with the guy.
What about the rest of it?
The $303 million left in the suit — Judge Rakoff had already decided the $1 billion the trustees were initially seeking was too high — will come down to the jury. If the jury decides that the Wilpons (who have denied knowing anything about the Madoff scam from the get-go) are culpable, they'll have to pay the rest of $303 million, which represents the amount of money the Wilpons initially invested.
Are they going to lose the trial?
Judge Rakoff sure doesn’t think so. Surprisingly, he said as much in his ruling, stating, "“Conclusions are no substitute for facts, and too much of what the parties characterized as bombshells proved to be nothing but bombast. Nevertheless, there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith depending on which assertions are credited.” Of course, Rakoff isn’t deciding the case, a jury is, and juries are a bit more prone to emotional decisions. And juries love to stick it to people who have the slightest association with Madoff, let alone stitched him a jacket. As a smart professor-type told The Wall Street Journal this morning, “Bringing it to the jury, you never know what is going to happen,” he said. “It’s a lot of money, Madoff is a hated guy and jury discretion could run pretty wide.” All that said: The general consensus is that it’ll be tough to prove the Wilpons were “willfully blind” to Madoff’s malfeasance.
If they win the trial, will they remain the Mets owners?
Almost certainly, yes. Having this come down to losing “only” $83 million would be an unqualified victory for the Wilpons.
If they lose the trial, will they remain the Mets owners?
It’d be tough. The issue is not so much the $303 million — though when you lose $303 million, you tend to feel it — as much as it would be a further contribution to the intense instability of the franchise, making it unlikely that any more minority investors would want to be involved. Even worse, because the $383 million is based on a two-year period of activity with Madoff, not the six-year period the trustees initially wanted, a verdict against the Wilpons would lead to more appeals that could cost the Wilpons even more. If they lose this, they’re probably done.
What does Scott Boras think about this?
Thanks for asking! Scott Boras has lots of opinions! He says the Mets’ ownership should be replaced because their lack of spending is an “ethical violation of the game.” Does this have something to do with the fact that all that non-spending is no longer going in the pockets of Boras and his clients? Perhaps!
Is there any unremittingly happy news with the Mets? Like, on the field?
Well, at 1 p.m. today, Johan Santana is going to pitch in a spring training game against the St. Louis Cardinals. It’s the first time he has thrown in an actual game since a minor league game last July. If he’s able to make it to opening day, he’ll be appearing for the Mets for the first time since September 2, 2010. The game is on SNY. Turn it on. Forget this Wilpon madness!