Wednesday, November 02, 2011
Mets Owners to settle on secondary Madoff-related lawsuit
The widow of a former employee of Wilpon's Sterling Equities Associates filed a lawsuit in U.S. District Court in Manhattan in July 2010 alleging the real-estate company, which owns the Mets, and several of its top executives bear responsibility for letting employees put more than $16 million in 401(k) assets into accounts controlled by the now-jailed financier Madoff.
The lawsuit, which sought class-action status, contended that $16.2 million of the 401(k)'s $17.6 million in assets were invested with Madoff. It alleged that Wilpon had fiduciary responsibility for that decision on the grounds that Sterling Equities and several of its top executives should have known that Madoff was carrying out a massive Ponzi scheme that cost thousands of investors billions of dollars. Madoff, 73, revealed the fraud in December 2008, pleaded guilty to fraud charges and is serving a 150-year prison sentence.
The lawsuit said its plaintiff, Elyse S. Goldweber, was the beneficiary of the 401(k) plan built by her late husband, David A. Sloss. It said the majority of $280,420 in her husband's retirement plan was directly invested with Madoff "and has now been wiped out."
A letter jointly filed with the court Tuesday by plaintiff attorney Karin E. Fisch and defense attorney Myron D. Rumeld read: "The parties have reached an agreement in principle identifying the primary terms of a settlement of this action. The parties are preparing to share the terms of the settlement and other information with the Department of Labor ... in the hopes that the terms of the settlement will satisfy the Secretary that further litigation will not be necessary."
The Wilpons continue to face a larger lawsuit brought by trustee Irving Picard, who is trying to recover funds to distribute to victims of Madoff's Ponzi scheme, although a recent court ruling appears to limit the potential liability to $386 million rather than the original $1 billion sought by Picard.
The eventual amount owed, barring a successful appeal of a ruling by District Court Judge Jed S. Rakoff, may even limit any judgment to $83 million in profits allegedly withdrawn by the Wilpons over the final two years before Madoff was shut down by authorities.