Bankruptcy judge rules in favor of Georgia coach
A federal bankruptcy judge has reportedly rejected a fraud claim made by a former University of Georgia football player against former UGA coach Jim Donnan. In the ruling, the judge stated that there was no evidence that Donnan engaged in deceptive conduct and, as such, that the player was not eligible to have access to Donnan’s assets before other investors.
Donnan and his wife filed for personal bankruptcy last summer after being ordered to pay millions in restitution in connection with an alleged Ponzi scheme.
The Donnans were initial investors in a company that used investors’ money to buy discontinued appliances and furniture for resale. However, the owners reportedly only spent a small portion of that amount on that stated purpose, and used the rest to pay big returns to the Donnans and other early investors.
Although the Donnans were not accused of any wrongdoing in connection with the alleged scheme, they were ordered to pay about $8 million to other investors who had lost money in the scheme.
They had previously offered to repay $5 million, but that claim was rejected. Because they had insufficient assets to pay the extra $3 million as ordered by the court, they were forced to file for bankruptcy. You can read more about their case in our earlier bankruptcy blog post.
Soon after the bankruptcy filing, former UGA linebacker Kendrell Bell filed a claim in bankruptcy court alleging that Donnan fraudulently convinced him to invest $2 million in the now-defunct company. He objected to the Donnans’ bankruptcy plan, asking the court to allow him early access to Donnan’s assets.
The judge refused to grant that request, stating that there was no evidence that Donnan had used fraud to get Bell to invest in the company.
Source: Athens Banner-Herald, “Judge says coach Donnan did not deceive former player,” Lee Shearer, Feb. 20, 2012