Following a mediation process, 30 former associates of convicted Ponzi schemer Tom Petters have agreed to repay nearly $8.5 million to the bankruptcy estate of Petters' companies, according to media reports.
The Star Tribune reported that the "officers, directors, employees, and strategic partners" of Petters-who is serving a 50-year prison sentence for orchestrating a $3.65 billion fraud scheme-agreed to the settlements following "clawback" lawsuits filed by bankruptcy trustee Doug Kelley.
The $8.5 million in settlements represents about one-third of the $22.8 million sought by Kelley from the 30 Petters associates, the Minneapolis newspaper reported. The deals still require approval by bankruptcy judge Gregory Kishel, and money that Kelley recovers is expected to be distributed to victims of the Ponzi scheme.
According to a report by the Pioneer Press, clawback suits were filed against 56 former employees, and while some other settlements are expected to surface soon, attempts to reach a deal with more than 10 failed, and Kelley expects those cases will move toward trial.
Kelley's attempt to "claw back" funds, mostly from parties who profited from their investments with Petters, has been a long and contentious process.
About 200 clawback lawsuits seeking to claim more than $1.6 billion have been filed in the Petters bankruptcy, and about half of the targets have filed motions to dismiss the suits. According to the Star Tribune, the fight over those motions is expected to play out later this month.