Bernie Madoff: Fred Wilpon and Saul Katz's Foundations
Just how much money did Mets owner, Fred Wilpon, and his business partner and brother-in-law, Saul Katz, lose with Bernie?
I took a look at Wilpon and Katz's private foundations and both entities had pulled almost all of their money out of Madoff by the end of 2007. Odd because the investments, at least on paper, were reliably profitable.
NY Post sports columnist, Michael Vaccaro, suggested yesterday that Wilpon should have leveled with Met fans in the beginning of the season about how the team would be affected by his Madoff losses. The loss, initally rumored to be $300 million, was recently upped to $700 million by Larry King in a June GQ interview. King, a Madoff victim, was introduced to Bernie by Wilpon.
How much cash out of pocket Wilpon and Katz actually lost could be a different story. No one is saying whether the $700 million figure includes phantom profits from Madoff investments or whether Wilpon and Katz took out more money than they put in. To date, the bankruptcy trustee has not filed a clawback suit against any entity controlled by Wilpon and Katz but the trustee hasn't completed his work yet.
Another question is whether Wilpon and Katz put up Madoff accounts as collateral for their real estate ventures or other businesses.
Wilpon and Katz generally operate under the corporate umbrella, Sterling Equities, a privately held company. Sterling has a list of charitable foundations affiliated with the Wilpon and Katz families on its website.
Financial data about the foundations is included in 990s which are informational tax returns required to be filed annually with the IRS. The actual 990s are online at Guidestar and the Foundation Center's 990 Finder (no reg. req'd.)
The Judy and Fred Wilpon Family Foundation had $1.5 million invested with Madoff at the beginning of 2005. That year, the amount declined to $396k and, by the end of 2007, the date of the latest 990 filed, the amount invested in Madoff had been reduced to $74k.
In 2002, the Iris J.and Saul B. Katz Foundation had $3 million invested in Madoff. In 2005, the amount was $1.8 million. By the end of 2007, the date of the latest 990 filed, the foundation had no money invested with Madoff. The $1.8 million was transferred to another investment vehicle.
Between 2006 and 2007, Fred Wilpon contributed $3.4 million to his foundation which was all distributed to charity within the year it was donated. Prior to 2006, Wilpon had not made any contributions since at least 2001.
Saul Katz made no contributions to his foundation between 2001 and 2007.
The New York Mets Foundation had $745k in cash and no other assets at the end of its fiscal year in 2006. But the 990s for 2005 and 2007 are missing.
The Dayle and Michael Katz Foundation reduced its investment in Madoff from $734k in 2006 to $353k in 2007 and that amount included phantom profits.
The Len, Michael and Dayva Schrier Foundation was the only Wilpon-related entity to file amended 990s for back years. The amended 990s online only date back to 2001 so what the actual loss is cannot be determined. At the end of 2000, the foundation reported a balance of $397k but that probably includes phantom profits..
The Valerie and Jeffrey S. Wilpon Foundaton had $394k invested with Madoff at the end of 2006, the latest 990 available online. That amount includes phantom profits although Fred Wilpon did contribute $350k in cash to the foundation between 2001 and 2005.
The Phyllis and Thomas Osterman Family Foundation had $223k invested with Madoff at the end of 2007. That amount also includes phantom profits.
The other two foundations lost less than $100k and those amounts include phantom profits, too.
All of the foundations listed contributed to various charities ever year, another factor to be considered in the calculation of actual losses.
Fred Wilpon and Saul Katz didn't lose a lot of money with Bernie Madoff through their foundations nor did their families. Relatively speaking.
According to the NYT sports section this weekend, Fred’s still being kinda coy:
'Although he did not divulge what he, his business, Sterling Equities, or his family had lost — “that’s personal stuff,” he said — he noted that the estimates of the losses were wildly inaccurate and wildly high. One estimate of $700 million was reportedly made to GQ magazine in March by the talk show host Larry King, a friend of Wilpon’s who is also a Madoff victim.
...
'Bob DuPuy, the president of Major League Baseball, said that the Mets’ financial reports, which are filed quarterly, like those of other teams, have shown no financial distress or need to worry about the team’s long-term future under the Wilpons.
...
'Wilpon’s businesses, including the Mets, are privately held, making it extremely difficult to verify his or DuPuy’s assertions.'
Fred didn’t file a claim with Picard?
August 29, 2009 10:33 PM | Reply | Permalink
Seekonk,
If he put more money in his Madoff accounts than he took out, Wilpon is entitled to file a SIPC claim which provides refunds of up to a maximum of $500k for, I believe, each account.
Wilpon took more money out of his foundation's Madoff account than he put in. If that is the same case for his other Madoff accounts, Wilpon could be subject to a large clawback claim.
The Mets financial statements wouldn't reflect Wilpon's overall financial condition. He has a lot of money invested in real estate, for example, and the properties could be heavily leveraged.
One of my questions is whether any of Wilpon's loans were collateralized with Madoff accounts. The Madoff customer list shows a lot business accounts under the Sterling name.
August 30, 2009 10:53 AM | Reply | Permalink