Tom Petters Bankruptcy Filing Confirms Liquidation Plan

by San Antonio Attorney

The company of Tom Petters, who recently filed for bankruptcy, has already created a liquidation plan in order to resolve debtor and creditor’s claims.

Doug Kelley, the trustee of the Chapter 11 filing, said that the liquidation plan was approved by creditors and will distribute $172 million to victims who have lost money while on investment with Petters through the investment funds.  The victims will receive 10-14 cents per dollar.

This plan was approved by Judge Kishel and the creditors are expected to receive payments within 10 days.  These claims can be traced back to 2008, when Petters was guilty of committing the biggest financial fraud in Minnesota.

The 58-year-old businessman devised a $3.5 billion Ponzi method, along with his accomplices across the country.  Petters once spearheaded a huge business empire that included Sun Country Airlines, Fingerhut and Polaroid.  Petter eventually succumbed to fraud and was sentence to 50 years in prison in 2009.

The $172 million, acquired through sales of Petter’s remaining assets and stock, will be utilized to create a liquidation trust.  The funds will be given to the victimized investors especially through the funds connected to the Palm Beach Finance Partners and Estates by Lancelot.

There is a second trust created to fund current lawsuits against BMO Harris Bank.  Though some cases are already settled, some lawsuits are directly connected to Petter’s scheme.

Kelley revealed that he is currently waiting for more funds to be released to the creditors, to be ready for distribution following the terms of the plan approved the previous week.

Petters Group Worldwide was run by Petters himself and the company used the money of the investors to purchase and resell electronics.  However, this was only a front for their Ponzi scheme, used to pay other non-related investors and fund other businesses.

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