All season we heard reports from various sources that the Mets were strapped for cash because owner Fred Wilpon and his company sustained big losses as a result of Bernie Madoff's Ponzi scheme. The Mets strenuously denied those claims, and a claim filed in bankruptcy court this week supports those denials.
Irving Picard, the court-appointed liquidator of Madoff's ill-gotten gains, made a filing in U.S. Bankruptcy Court on October 19th alleging that Mets LP invested $522.7 million in two Madoff accounts and withdrew $570.5 million. That's enough to pay for a couple of big free-agents to help the team escape the rubble of their 2009 season, so it's good news, right?
Not so fast. Picard also denied claims from the Mets limited partnership for more than $800,000 they were owed as a result of Madoff's malfeasance. Such a denial indicates that Picard doesn't believe they are owed money because they profited from Madoff's scheme. What's more, the Wilpons may actually become the target of suits by Picard and/or others looking to recoup the $48 million in ill-gotten gains. Former federal prosecutor Bradley Simon told Bloomberg News that Picard would be in violation of his fiduciary duty if he didn't go after the money gained by the Wilpons.
That's for the courts to figure out, but this news doesn't mean that the Mets didn't lose a good chunk of cash with Madoff. It seems quite possible that the Mets had assets that were once much greater than $570 million, real or artificial, and that they made other financial decisions based on those figures. That would go a long way toward explaining a lack of financial flexibility during the 2009 season and may serve as a harbinger for a slow winter around the hot stove as well.
In short, the Mets' paper profit may wind up doing them as much good as their talent on paper when the 2009 season got underway.
