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NEW YORK (Reuters)—In the trial over whether owners of the New York Mets turned a blind eye to Bernard Madoff's Ponzi scheme, jurors are expected to hear about fabulous fortunes.
The court-appointed trustee who brought the case hopes that they don't hear about the one earned by his firm.
Irving Picard, the court-appointed trustee, has sought an order to exclude any evidence concerning the more than $275 million in fees that the army of lawyers at his law firm, Baker & Hostetler L.L.P., racked up in their effort to recoup money for Madoff victims.
In the request, Mr. Picard anticipates that lawyers for the Mets owners will raise the legal fee issue. He argues that the fees are irrelevant to the trial and could unfairly prejudice the jury against him. U.S. District Judge Jed Rakoff, who will oversee the trial that is expected to begin Monday, has yet to rule on the order.
The trial will explore the wealth of the Mets owners, Fred Wilpon and Saul Katz, who began investing with Mr. Madoff in the 1980s. Mr. Picard has accused the Mets of ignoring red flags about Mr. Madoff's fraud.
Mr. Picard is seeking more than $300 million in principal the Mets' owners invested and recouped in the two years before Mr. Madoff's 2008 arrest. In addition, Mr. Picard also is seeking to claw back $83.3 million in "fictitious profits" that the Mets earned in their accounts as a result of Mr. Madoff's scheme.
Mr. Picard was appointed as Madoff trustee in December 2008 shortly after the fraud was revealed. He has since filed hundreds of lawsuits in his effort to return money to victims, but the Mets case would be the first to make it to trial.
The case was first filed in bankruptcy court in Manhattan where Mr. Madoff's firm is in liquidation. Lawyers for the Mets successfully argued that the case belonged in federal court because the case raised questions beyond bankruptcy law.
Since bankruptcy-related cases are rarely heard by juries, the fees made by a trustee are not often an issue of contention before trial, according to legal experts. The Mets case could be a rare case in which a jury learns just how lucrative trusteeship work can be.
In its most recent fee application made to the bankruptcy court overseeing the Madoff case—which covered the period from June 1, 2011, through Sept. 30, 2011—Picard and Baker & Hostetler sought nearly $48 million.
According to the application, Mr. Picard billed 674.7 hours at an hourly rate of $850 for a total of $573,495. David Sheehan, another Baker & Hostetler partner and the lead attorney for Mr. Picard, billed 877.9 hours, also at $850 an hour, for a total of $746,215. It's not known how much Mr. Picard has personally received for his work on the Madoff case.
In a court filing earlier this week, lawyers for the Mets owners argued that Mr. Picard's request to exclude from the court record fee information was unfair. Mr. Picard is trying to have it both ways, they wrote, by "portraying himself as a tireless champion of defrauded victims" on the one hand but on the other hand, hiding the fact that the "trusteeship has been a very lucrative assignment."
According to Mr. Picard, lawyers for the Mets owners previously sought to depose Mr. Picard about his fees and his choice of counsel. The defendants, Mr. Picard said, wanted to understand whether there was "any pecuniary incentive tied specifically to this litigation." But Judge Jed Rakoff rejected the request to depose the trustee, according to Mr. Picard.
The federal court case is Picard vs. Katz, U.S. District Court, Southern District of New York, No. 11-3605.
NEW YORK (Reuters)—Owners of the New York Mets struck out as a federal judge refused to dismiss a $386 million lawsuit by the trustee seeking money for victims of Bernard Madoff's fraud, clearing the way for a possible March 19 trial.