Yesterday, he filed a lawsuit of particular note, against Sterling Equities and several members of the Wilpon family (owners of my beloved New York Mets). What is interesting for our purposes is the fact that Picard appears to be using a pretty sophisticated Litigation PR tactic: filing an incendiary complaint "under seal" as a negotiating tactic -- putting pressure on the other side to make the lawsuit go away before full details are unsealed. Here's a relevant passage from The New York Times' "Dealbook" (full Dealbook post is here):
In a press release, Irving L. Picard, the trustee, said that he was engaged in “good-faith negotiations” to settle the claims with Sterling and the other defendants...This is "good-faith negotiations?" I'd hate to see Picard acting in bad faith.
“In light of the ongoing negotiations between the Sterling defendants and the trustee, and consistent with Court orders, we have filed the complaint under seal,” said Fernando A. Bohorquez Jr., a colleague of Mr. Picard at Baker & Hostetler, the law firm overseeing the dissolution of the Madoff firm. “Under those circumstances, we will not move to unseal the complaint and exhibits at this time.”
Sterling Equities responded with a "no comment," citing the ongoing negotiations. I can only assume they were blindsided by the tactic, which I've seen used over the years in a handful of high-profile cases.
To be fair, Picard is under a deadline -- he must file any "clawback" claims against third parties by Saturday, December 11 (an excellent WSJ Law Blog post, here, details the recent filings). But why not let the Wilpon negotiations run their course? My Spider-sense tells me Picard felt the additional pressure of a potential public battle might move Wilpon and Sterling Equities in the right direction.
Now perhaps I'm reading tea leaves here. And whether it works or not (and what information is contained in the filing) is yet to be seen. But one element of a public fight would work in the Wilpons' favor: a clawback fight might once-and-for-all put an end to the rumors that the Mets' owners lost so much money in the Madoff fraud that their baseball operations are in trouble (click here for an example). An October 2009 filing by Picard showing that a Mets account actual made some $47 million did little to quell these rumors as Mets' ownership showed a tight pocketbook in recent free agent and draft markets. Ultimately, knowing the full extent of the Wilpons' Madoff losses (or profits) might be a good thing for the team going forward -- offering peace of mind to Mets' fans worried about their team's continued ability to be competitive (bearing in mind, of course, that peace of mind to a Met fan is a relative concept to begin with).
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