Tag Archives: NY Mets

BERNIE MADOFF COULD HAVE BEEN AN OWNER OF THE NEW YORK METS

                                                                                       Kallas Remarks by Steve Kallas

 With the unsealing of the mammoth, 365-page complaint in the Madoff bankruptcy case of Picard v. Katz, Wilpon, et al., there will be many things for the public, and especially, Mets fans, to digest. But here’s the most Amazin’ (pun intended) thing: Bernie Madoff could have been an owner of the New York Mets.

Of all the crazy things that have already come out of the greatest Ponzi scheme in the history of the world (Madoff is doing 150 years in prison, unrepentant), this is perhaps the craziest. But it’s all right there in the unsealed complaint filed by Irving Picard, the Trustee for the Liquidation of Bernard L. Madoff Investment Securities.

A reading of the complaint discusses the fact that Bernie Madoff invested at least $12 million in “Sterling-related investments.” Sterling is defined in the complaint as Fred Wilpon, Saul Katz and others. One of the investments offered to Bernie Madoff was partial ownership of the New York Mets. Quoting from the complaint:

“The only time Sterling offered Madoff an opportunity to invest that he declined was in the Mets, when in 2002, Doubleday sold its 50% ownership of the Mets and Sterling offered Madoff partial ownership interests in the franchise.”

You can’t make this stuff up.

The complaint goes on to discuss the various investments that Madoff did invest in with the Sterling defendants. But they are irrelevant to the general public compared with the notion that Madoff could have been a Mets owner.

While it is still unclear why this complaint was sealed in the first place (the offered idea that it was sealed so the parties could work out a settlement isn’t really a viable answer), one can make a good guess that nobody in the Mets organization wanted the word to get out that the architect of the biggest Ponzi scheme ever almost owned a piece of the New York Mets.

While this complaint will be read, analyzed, over-analyzed and discussed in the days, weeks, months and even years ahead, nobody will find anything more unusual (scary?) than the fact that Bernie Madoff, in 2002, almost became an owner of the Mets.

Unbelievable.

© Copyright 2011 by Steve Kallas.  All rights reserved.

BIZARRE TWISTS AND TURNS IN THE METS-MADOFF CASE

                                                                                       Kallas Remarks by Steve Kallas

It doesn’t seem to be getting any better for the Wilpon family. Real-estate hasn’t been very good for a few years. The New York Mets haven’t been very good for a few years. And now, with a sealed lawsuit hanging over their heads in the Madoff case, comes word from the New York Times about a strange older case where an investment firm started by Fred Wilpon and Saul Katz, his brother-in-law and partner, had to pay back $13 million two years ago when a hedge fund collapsed due to fraud.

THE MADOFF CASE

It’s hard to decipher all of the case (or cases) against the Wilpons, the Mets and all the related entities. The “clawback” case that has been in the news is a relatively simple one: when you take out more money than you put in to an investment and the company goes bankrupt, a trustee can come after that differential whether the Wilpons had any knowledge of the fraud or not. Obviously, however, it’s much worse if they were involved, had knowledge or, those dreaded words, “should have known” about the wrongdoing.

In the specific clawback case filed in the bankruptcy court in the Southern District of New York, trustee Irving Picard is suing Wilpon and Katz for at least the difference between the $522.7 million that they put into Madoff accounts and the $570.5 million that was taken out (that is, a profit of $47.8 million).

When the suit was announced in early December 2010, the Mets organization, and especially Jeff Wilpon, Fred’s son, repeatedly said that it would have no impact on the Wilpon family’s ability to run the Mets franchise.

Until they announced this past Friday that it would.

FEBRUARY 9 IS THE BIG DAY

While there has been much speculation as to how much the trustee is trying to get from the Mets (hard to believe even a $47 million loss would cripple the Wilpons so much as to seek a “minority partner or partners” for the team), it’s hard to figure out what exactly is going on. Are there numerous suits relating to Wilpon entities that put the Wilpons and the Mets at risk for a loss of hundreds of millions of dollars (everyone now seems to agree that the $1 billion number bandied about last week is way too high)? Did the Wilpons and Katz have any knowledge of the wrongdoing? Did the Mets borrow against monies they turned out not to have, causing them severe cash flow problems?

These are just a few of many questions that need to be answered.

Lots of information on these and other fascinating questions may well be answered in bankruptcy court in Manhattan on February 9, 2011. The New York Times and WNBC Channel 4 have filed a motion in the bankruptcy court to unseal the court records relating to the Madoff/Mets case(s).

Nobody even seems to know at this point why the case(s) was sealed in the first place. A rare occurrence, usually there must be some very good reason, like a trade secret that couldn’t be disclosed or some other confidential business information.

It’s very hard to seal a complaint and many legal experts have spoken out against such a holding in this particular case. Here’s what part of the motion says:

“To the extent there are any allegations of financial impropriety by the team’s owners, the taxpayers who have provided them substantial financial support have the right to know about it.”

Yikes! That’s a direct reference to the $300 million dollars of taxpayers’ monies that were given to the Mets over the last few years. Scary stuff, no?

It would be hard to see how a judge will justify not making this and maybe other complaints public. At a minimum, the judge will have to explain why they were sealed in the first instance. A viewing of this and other related lawsuits would shed more light on the problems of the Mets and their owners

BUT IT ONLY GETS WORSE FOR WILPON AND KATZ

Now the New York Times is reporting that something similar to the Madoff scam has already occurred with a company founded by Fred Wilpon and Saul Katz. According to an article written by Alison Leigh Cowan in the Times, Wilpon and Katz started an investment firm that, two years ago, had to pay back nearly $13 million when a hedge fund collapsed from a Ponzi scheme.

The Times goes into the many similarities between this $450 million fraud, perpetrated by Samuel Israel III (now serving 22 years in prison), and the Madoff scam. The firm that Wilpon and Katz started, called Sterling Stamos, was accused of withdrawing money from a Sam Israel-entity named The Bayou Group after detecting evidence of possible fraudulent activity. Because of this alleged knowledge, lawyers for the defrauded went after Sterling Stamos for more than the $30 million that they took out (possibly something that the trustee in the Madoff case is trying to do; that is, go far beyond the simple “clawback” number of $47.8 million).

Sterling Stamos settled the case for the afore-mentioned $13 million with no admission of liability. In the present Madoff case, Fred Wilpon announced on Friday that his lawyers are trying to settle the present suit by Irving Picard, the Madoff trustee. As to the older case, a spokesman for the Mets said that Wilpon and Katz would not comment.

In a further bizarre side note, the third partner, Peter Stamos, a brilliant Rhodes Scholar and Harvard Law School graduate, was married for 29 days to fellow law school student Silda Wall, years before she married former Governor Eliot Spitzer. According to the Times, a spokesman for Mr. Stamos declined to comment.

Is there a movie here somewhere or what?

SO, WHERE DO WE GO FROM HERE?

Well, in this writer’s opinion, much will be determined on February 9, unless the lawyers for Wilpon and Katz find out a way to globally settle the case by then. If they don’t, it will be hard to understand how the present Madoff cases will remain sealed. If unsealed, many (but not all) questions may be answered. As for the Times uncovering of the older hedge fund fraud, that is nothing but bad news for Fred Wilpon and Saul Katz.

Whether they like it or not, they’ve got a lot of explaining to do. It will be hard to dance around the cumulative impact of what’s going on.

It’s now tougher than ever to be a Mets fan, don’t you think?

© Copyright 2011 by Steve Kallas.  All rights reserved.

AMATEUR HOUR IN QUEENS — WILLIE RANDOLPH FIRED AT MIDNIGHT

                     Kallas Remarks by Steve Kallas

It’s hard to argue with the fact that Willie Randolph was fired by Mets General Manager Omar Minaya Monday night.  The best you could come up with if you’re a Randolph guy is that the Mets have won three of their last four and four of their last six.  Maybe they’ve turned the corner.  But the stench of last year’s epic collapse (a seven-game lead with 17 to play and they didn’t even make the playoffs) never went away and the maddening inconsistencies of this season look like they might never go away. 

    

But the amateurish nature of the firing – around midnight out on the West Coast after a 9-6 Mets win over the Angels – won’t soon be forgotten by Mets fans and critics alike.  It’s hard to believe that Fred Wilpon, who seemed to have a clue and who went to high school in Brooklyn with the great Sandy Koufax, would allow this, let alone sanction it.  But it really is amateur hour in Queens – Jeff Wilpon is on his way to becoming James Dolan (that should make Mets fans quiver with fear), Omar Minaya often seems to have brain lock as he’s trying to sidestep legitimate questions about the Mets, and the whole team, with a $140 million payroll, seems to have forgotten how to play the game.

    

You know the old adage – you can’t fire all of the players so the manager has to go.  And you can bet that Minaya is looking over his shoulder because he’s next if Jerry Manuel (Willie Randolph II, maybe?) can’t turn things around.  Did Randolph elect to go down with the ship when Minaya wanted to fire a couple of his coaches?  Well, that could be what happened, although it remains to be seen if that info will get out.  Could Willie have stayed if he allowed the sacrifice of pitching coach Rick Peterson and first-base coach Tom Nieto (what exactly did he do wrong?) or did he say if they’re going I’m going, too?  That remains to be seen.

    

But what we never saw was Jose Reyes (have those comparisons to Derek Jeter stopped yet?) bust it on every play.  What we never saw was Carlos Delgado make much of an effort to field balls near him at first.  What we never saw was any consistency from the talented Oliver Perez (what happened there, Rick Peterson?).  What we never saw was the Human Disabled List, Moises Alou, stay off the disabled list.  Willie Randolph couldn’t go out and do these things for these players.  A star and multiple World Series champion as a player and coach, Willie was and is a classy guy who simply couldn’t get the message across to these guys.  How will Jerry Manuel be different?

    

Nobody said that Willie Randolph was Casey Stengel.  Nobody said that Willie Randolph was Billy Martin.  But you don’t have to be a brilliant X’s and O’s guy or a fiery (outwardly, to satisfy the fans and media?) manager to lead a team to a World Series.  Remember, nobody accused Joe Torre of either when he came to the Yankees in 1996.  And, frankly, everybody questioned Torre’s moves more and more after first, Don Zimmer, and then, Mel Stottlemyre, left the Yankees because of George Steinbrenner.  But Torre had the four rings in the bank as Yankee manager, something Willie never had as Met manager.

 

IT’S THE SCHEDULE, STUPID

 

     Take a good look at the timing of the firing – not the bush-league midnight (3 a.m. in New York – what, the Mets thought they wouldn’t get hammered as much if they did it at 3 a.m.? – Of course, they’ll get hammered more for that) firing but the timing of their schedule.  After two more against the Angels, the Mets play six as easy as you can get games: three each against woeful Colorado (28-42) and more woeful Seattle (24-46).  You can bet that Minaya considered this because it will be very hard for Manuel to get off to a bad start with this kind of schedule.  Conversely, if he let Willie manage the next eight games, there would be a good chance that he and the Mets would go on a “hot” streak, caused, of course, by the weak schedule.  After that, however, four against the Yankees, including one of those make-up day-night doubleheaders in New York.  Very interesting, no?  

    

Could the Mets have fired Willie after last year’s historical collapse?  You betcha.  Credit to them for giving Willie the chance to come back this year.  Could he have righted the ship this year?  Well, we’ll never know the answer to that now. 

    

It’s not so much that the Mets did it.  Of course, it’s the way they did it.  Amateur hour is alive and well in Queens and, with the departure of Willie Randolph, most of the class in the organization has left the building.

 

 

© Copyright 2008 by Steve Kallas.  All rights reserved.