Well, the legal wrangling between the Trustee, Irving Picard and "The Wilpon Camp" continues . As you know , the venue has shifted from Bankruptcy Court to U.S. District Court . The case has been assigned to Judge Rakoff .
So how has the Trustee shifted gears ? First off, Judge Rakoff has preliminarily noted that he may very well apply "Securities Law " rather than Bankruptcy Law. Picard therefore must argue what Securities Law standards now apply against Wilpon and Company . Secondly, as I understand it , Picard is now arguing that assuming Wilpon was an "ordinary investor " rather than a "sophisticated investor", that he still had a duty to make a reasonable investigation after certain "red flags " became evident to Wilpon.
That may very well be the crux of the battle...Picard now argues that there were numerous red flags obvious to Wilpon and Katz; Wilpon's team will most definitely argue that there were no contemporaneous red flags, but rather that they have been concocted by the Trustee and his legal team "after the fact " in an effort to make out a "prima facie case".
So you now have the battlegrounds...My prediction...Judge Rakoff does not dismiss the case in its entirety, but significantly limits the scope of potential recovery for Picard.
In other words, round one to Wilpon! Let's wait and see....
No comments:
Post a Comment