http://www.nytimes.com/2011/01/29/sports/baseball/29mets.html?_r=1&hp
Madoff Lawsuit Forces Mets to Seek More Owners
By KEN BELSON
Published: January 28, 2011
Fred Wilpon, the chairman of the New York Mets, said Friday that he was seeking “one or more strategic partners” to buy a portion of the team and offset the uncertainty created by a lawsuit seeking to recover money in the multi-billion dollar fraud orchestrated by Bernard Madoff.
A trustee is suing Sterling Equities, the Fred Wilpon-controlled investment company that owns the Mets.
Wilpon; his brother in law and co-owner of the Mets, Saul Katz, and their families had scores of accounts invested with Madoff — family trusts, real estate investment entities and an assortment of other business entities.
In December, the trustee for the Madoff victims, Irving Picard, sued Wilpon and Katz, seeking an undisclosed amount of money to compensate those who lost all or part of their savings and fortunes to Madoff.
The suit lists more than 90 entities controlled or associated with the two owners of the Mets.
A person involved in the Madoff cases said it was possible that Picard was seeking as much as $1 billion from Wilpon and Katz.
"I think he has a very serious problem,” the person said of Wilpon and the money Picard is seeking. "If that’s true, he might have to sell the Mets." The person asked not to be identified because of the sensitivity of the Mets’ situation.
In a statement Friday, Wilpon asserted that he would not give up principal ownership of the team.
“To address the air of uncertainty created by this lawsuit, and to provide additional assurance that the New York Mets will continue to have the necessary resources to fully compete and win, we are looking at a number of potential options including the addition of one or more strategic partners,” the statement said.
“Regardless of the outcome of this exploration,” the statement concluded, “Sterling will remain the principal ownership group of the Mets and continue to control and manage the team’s operations.”
The lawsuit was filed by Picard under seal in Federal bankruptcy court in Manhattan in a rare instance of secrecy involving his efforts on behalf of Madoff’s victims.
Lawsuits in such cases can only be sealed if the defendants claim the information contained in the legal filings contain trade secrets, other confidential business information or “scandalous” or proprietary information.
Last week, The New York Times and WNBC-TV filed a motion in bankruptcy court seeking to unseal the lawsuit. A hearing on that motion was set for February 9.
In the last week, two people in the city’s banking and real estate world said that Wilpon was quietly seeking a partner to buy a portion of the team because he needed an infusion of cash, presumably because of the pressure from the lawsuit.
Jeff Wilpon, Wilpon’s son and the chief operating officer of the Mets, insisted to The New York Times several times in the past week that no portion of the team was for sale.
Adding to the sense that the Mets are in some financial pressure was their unwillingness to spend any significant money in the current off-season, although the team finished under .500 last year and needs more talent to be a creditable contender. Their payroll, which exceeds $140 million, does remain one of the largest in baseball.
The Mets said they have hired Steve Greenberg, a managing director at Allen & Company, as an adviser. Greenberg, whose father, Hank, was the Hall of Fame slugger, has worked with the Mets before, including helping the team establish SNY, the cable network that carries Mets games, and in arranging for the 20-year, $400 million naming rights deal for Citi Field.
Wilpon originally bought a half-share in the Mets in 1980, and then bought out his partner, Nelson Doubleday in 2002 for $131 million. The team was worth an estimated $858 million last year, according to Forbes. Wilpon also built Citi Field, which opened in 2009.
