Saturday, October 15, 2011

Owners of the Mets are seeking to avoid a jury trial


The owners of the Mets are seeking to avoid a jury trial in the case filed against them by the trustee for the victims of Bernard L. Madoff’s fraud. The owners could be forced to pay hundreds of millions of dollars in the case.

In papers filed Friday in Federal District Court in Manhattan, lawyers for the team’s owners said that the trustee, Irving H. Picard, “is not entitled to a jury trial” because the two remaining claims arise out of the bankruptcy code. Generally, bankruptcy courts are not authorized to conduct jury trials.

They are saying, in essence, that a case that started in Federal Bankruptcy Court but is now being heard in United States District Court should be tried under bankruptcy rules by Judge Jed S. Rakoff. Picard responded with a request for a jury trial. “Despite the defendants’ trepidation to submit to a jury’s judgment, the trustee’s constitutional right remains,” his filing said. “Nothing here impedes that.”



The request to avoid a jury trial could indicate that the Mets’ owners feel confident in rolling the dice with Rakoff, who last July agreed to move the case to his court from bankruptcy court and who has said bankruptcy court is a form that can have “tunnel vision.”

The Mets’ owners might not want to try a case that involves the interplay of securities and bankruptcy law in front of a potentially unpredictable jury.

A ruling by Rakoff last month appeared to give Fred Wilpon and Saul Katz, the Mets’ owners, hope that the case was going their way. Rakoff dismissed 9 of the 11 claims filed by Picard against Wilpon and Katz and limited to $386 million the amount of fictitious profits Picard can pursue from them.

Picard had been seeking $1 billion in fictitious profits and principal paid out in the last six years of the fraud, as permitted under New York State law. Rakoff ruled that Picard had produced sufficient evidence that Wilpon and Katz might have been willfully blind to warnings about Madoff for that claim to go to trial. But he disallowed a claim that would have made it easier to recover money from the two men.

Picard has filed a motion seeking to appeal Rakoff’s decision.
Related Posts Plugin for WordPress, Blogger...