The Wilpons essentially claim that because they had $500 million on statements with Bernard Madoff when he was arrested and shut down, they lost that amount.
However, lower courts largely have validated trustee Irving Picard's method for determining winners and losers. According to Picard, if you invested more money than you withdrew, you were a net loser. And if you withdrew more money than you invested, you're a winner, even if you thought you had more. If Picard were to rely on Madoff's fictitious statements to investors, pretty much everybody would be a winner, in essence, and there would be nobody who made off relatively OK to collect money from to distribute to people who lost principal.