Kallas Remarks: The Mets And Mediation
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By Steve Kallas
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When the news broke yesterday on Mike Francesa’s show that former New York Governor Mario Cuomo, Queens native, St. John’s grad and former minor league baseball player, had been appointed to mediate the Picard/Wilpon-Katz dispute, Mike had a number of questions about the appointment. Here are answers to some of those questions.
1 – HOW DID THE APPOINTMENT COME ABOUT?
The appointment was ordered by Judge Burton R. Lifland, the United States Bankruptcy Judge for the Southern District of New York who is in charge of the massive Madoff bankruptcy proceeding. According to Judge Lifland’s Order, dated February 10, 2011, “the parties have been informed of and consented to the Court’s choice of mediator.” Obviously, this is Judge Lifland’s idea and both sides have agreed to it.
2 – WHAT IS THE GENERAL PURPOSE OF MEDIATION?
According to the AAA (American Arbitration Association), “[m]ediation is a non-binding process where a neutral third-party (the mediator) works with the parties to reach a mutually agreeable settlement.” It will also speed up the process of, possibly, settling this case.
3 – IS THIS A GOOD THING FOR THE NEW YORK METS?
A fascinating question. If the Mets are defined as Fred Wilpon and Saul Katz, it is a good thing because this is a chance to settle this case. If a fan is viewing this as the owners should sell the team now because of all of these troubles then, depending on one’s personal feelings about the team and its present ownership, a fan may not like this.
4 – WHY DID THE APPOINTMENT COME ABOUT?
Judge Lifland decided “that there are special issues presented in the Adversary proceeding that suggest referral to an appropriately experienced mediator.” The New York Times has reported today that Governor Cuomo started doing mediations in the early 1970s and that Judge Lifland appointed Governor Cuomo to be a mediator in a large case involving asbestos-related diseases in 2004.
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5 – WHAT HAPPENS NEXT?
Governor Cuomo will now consult with attorneys for the parties and fix a reasonable time and place for an initial mediation conference of the parties with him. He will notify the attorneys in writing of the time and place. Governor Cuomo, as mediator, has the power to establish the time for all mediation activities, including private meetings between the mediator and the parties and the submission of all relevant documents.
6 – WHAT HAPPENS AT THE ACTUAL MEDIATION CONFERENCE?
At the conference, a representative of each party with complete authority to negotiate all disputed amounts and issues must attend the conference. In addition, if Governor Cuomo wants to, he can require the presence of a party representative or a non-attorney principal of the party with settlement authority at any conference. Governor Cuomo can also determine when the parties are to be present in the conference room.
7 – DOES GOVERNOR CUOMO MAKE A SETTLEMENT RECOMMENDATION TO THE PARTIES?
While the Governor does not have to make written comments or recommendations, he can, if he so desires, furnish the attorneys for the parties with a written settlement recommendation. Such recommendation, however, will not be filed with the Court.
8 – WHAT HAPPENS WHEN THE MEDIATION IS OVER?
Governor Cuomo will have to file a final report discussing the results of the mediation. If an agreement is reached, then paperwork (a stipulation of settlement or a motion for approval of the settlement) will be presented to Judge Lifland for his review. If no settlement is reached, then the case will be heard or tried as scheduled.
9 - CAN THE PUBLIC ATTEND THESE CONFERENCES?
No, these conferences are confidential. In fact, no statement made by the mediator, parties or others during the mediation can be divulged to the Court (so as not to influence the Judge one way or the other if there is no settlement reached) or any third party. Indeed, all records, reports or other documents received or made by the mediator shall be confidential and not provided to the Court, unless they would otherwise be admissible.
10 – CAN THIS CASE BE SETTLED?
Well, this will be a very difficult case to settle. If anyone can do it, it’s Governor Cuomo. But Irving Picard, the Trustee, is starting somewhere in the high hundreds of millions to, possibly, a billion dollars. The Sterling Partners, Fred Wilpon, Saul Katz and others, are steadfastly maintaining that they knew nothing and were duped by Madoff like all of the other investors. So they are starting at or near zero. That will obviously be a huge bridge to gap.
Do you have any questions for Steve? Fire away in the comments below…