A controversy is brewing in regards to the unsealing of Mets’ bankruptcy records which are related to illegal profits Mets owners allegedly received from the Madoff scheme. Right now Universal Inc. and The New York Times Company are demanding that the bankruptcy records related to Madoff profits be unsealed because they say it is in the public interest.
“The large organization and ownership structure behind the Mets team is also an important New York business institution that employs hundreds of people and that recently received enormous public financial support to build a lavish new stadium, during the same period in which Madoff’s massive Ponzi scheme of many years was in its final tottering phase,” the court document states. “To the extent there is any alleged connection between those substantial strands of commercial activity, one legal and one not, and/or to the extent there are any allegations of financial impropriety by the team’s owners, the taxpayers who have provided them substantial financial support have the right to know about it.”
But should those bankruptcy records be unsealed simply based on public interest claim?
This is a sticky issue. Bankruptcy courts have the discretion to seal records within the bankruptcy case of a corporate entity if the information being sealed is a trade secret or is so critical to the business of the entity that its disclosure would give competitors an unfair advantage. At this point it is not clear if the records in this bankruptcy case qualify for sealing under the trade secret clause; but it is clear that the bankruptcy court presiding over the Mets bankruptcy felt that it was in the best interests of the debtor and their creditors to seal the records.