Picard needs to establish not that Wilpon and Katz knew what Madoff was doing, but that they were presented with numerous warnings or signs of Madoff’s scheme, Picard states in court papers.

Picard alleges that Katz had a conversation with a business partner, Charles Klein of American Securities, about purchasing insurance for its own investment portfolio and recommended Sterling also look into it. The trustee says an executive with Sterling allegedly met with an insurance representative and reported back to Wilpon and Katz about what the executive termed as "Madoff insurance."

Previous depositions of Katz contradict Picard’s allegations, Sterling says. In a transcript included within Sterling's filing, an attorney asks Katz what he thought about the insurance idea after speaking with Klein.

"We weren’t going to buy insurance on something that we thought was as good as gold and a waste of money," Katz answers.

Sterling also looks to get pre-trial evidence from Picard, who must have spoken to Klein in order to develop his allegations against the Mets’ owners. Picard is "compelled" to come forward with this evidence but has "put forth no evidence from Mr. Klein…which suggests once again that he has no evidence to support his claim," Sterling says.

Sterling asserts that the “shopping spree” allegation “cannot carry the weight of the trustee’s billion-dollar demand.”