January 18, 2012 / 1:57 AM / in 7 years

Judge rejects Madoff trustee appeal in Mets case

New York (Reuters) - The Madoff trustee suing the owners of the New York Mets may not appeal last summer’s ruling tossing out most of his $1 billion claim, a U.S. judge ruled on Tuesday, setting the stage for a March trial unless the two sides reach a settlement.

The case brought by trustee Irving Picard, part of his global quest to recover billions of dollars lost in the biggest investment fraud in history, originally sought $300 million in profit and $700 million in principal. The amount was whittled down to about $386 million by U.S. District Judge Jed Rakoff under his interpretation of the law.

The trustee accuses Mets owners Fred Wilpon and Saul Katz, who invested with Bernard Madoff for decades, of having ignored warning signs that the financier was running a Ponzi scheme. Madoff pleaded guilty in March 2009 to orchestrating a classic Ponzi scheme in which early investors are paid with the money of new clients. He is serving a 150-year prison sentence.

Picard argued that Rakoff’s decision last year to reduce the amount of his claims against the Mets owners would have an impact on hundreds of other lawsuits to recover money for victims of the fraud.

Wilpon and Katz said they were not aware of Madoff’s wrongdoing and were also victims of the fraud.

In a written decision on Tuesday, Rakoff said Picard could not appeal. He said that the main effect of granting the trustee’s motion “would be to materially delay, rather than materially advance, the ultimate termination of the litigation.”

The judge added, however, that “the factual record developed at the forthcoming trial of this case will likely have relevance to many of the issues that the Trustee seeks by his motion to put before the Court of Appeals.”

The jury trial is scheduled to start on March 19 in Manhattan federal court.

Picard’s spokeswoman, Amanda Remus, said the trustee had no immediate comment.

The case is Picard v Katz in the U.S. District Court for the Southern District of New York, No. 11-3605.

Reporting By Grant McCool; Editing by Gary Hill

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