Fred Wilpon
The Madoff trustee, Irving Picard, filed suit some time ago against renowned nice guy and Mets owner Fred Wilpon, seeking what are often called “claw back” profits. According to Picard and other trustees (who try to unscramble Ponzi schemes) profits “earned” by winners of the scheme must be returned to those who are “losers.” The problem often is that those “winners” don’t have the money anymore. For Wilpon and his partner Irving Katz the “profits” were substantial—we are talking big money folks: $386 million big.
Our repeat person of the week, the Honorable Jed Rakoff, presiding over the case, threw much of it out. But a portion remains and both sides are lining up hired guns (oops: “experts”) to support their positions.
Although I’m a friend of investors and have specifically represented thousands of them in connection with Ponzi schemes, I’ve never liked these “clawback “ cases. Yes, I see the logic. At some level, they make perfect sense. Winners of illegal profits pay back losers and the Trustee tries to “minimize” the gap. But Fred Wilpon was duped too.
Of course there were whispers on Wall Street for years about Madoff’s legitimacy. Someone besides Harry Markopolos smelled a rat. But those rumors were just that and no one, from the SEC or DOJ, was putting together a case. So why should Wilpon take the hit. I say no “clawbacks” unless the trustee can establish the net winner (someone like Wilpon) had actual knowledge of the scheme and provided the bad guy (in this case Madoff) with substantial assistance.
Jury Decides Mr. Perelman Is Not Entitled to A Nickel or “That Explains How He got all His Money.”
Five time divorcee Ronald Perelman, is an icon of American Business. With a net worth in excess of $2 billion he has had some huge successes. But his decision to sue his deputy Donald Drapkin for $16 million for Mr. Drapkin’s failure to secure some records of the company he had built with Perelman is just plain over the top. Of course something else might be at play, but the jury wasn’t buying it. To reach a verdict in less than one hour means they hardly got through their lunch. In my experience, it takes more than an hour to just pick a foreperson.
Mr. Perelman needs another $16 million like I need a new caviar spoon. Just because you can sue someone doesn’t mean you must. How can people that rich be so stupid?