Former Georgia coach reaches bankruptcy deal
The former football coach for the University of Georgia has reportedly agreed to a bankruptcy settlement with a retail liquidation company and several of its former investors who are accusing the coach of illegally profiting off of a Ponzi scheme. Under the agreement, Jim Donnan will pay nearly $30 million to both the company and its investors.
The bankruptcy settlement resolves the accusations that were leveled at Donnan from both sides of the dispute. The company, GLC Limited, alleges that Donnan profited from money that he invested with GLC, as well as from commissions of up to 20 percent that he charged for recruiting other people to invest in the company. On the other side, those investors allege that Donnan recruited them to join in on a Ponzi scheme, and that he therefore owes them about $27 million.
Under the bankruptcy settlement agreement, Donnan will repay $7.5 million to GLC Limited, as well as 80 percent of the alleged losses of the people he recruited to invest in the company. The agreement has been approved by the bankruptcy judge overseeing GLC’s restructuring, but it still needs to be approved by the Georgia judge overseeing Donnan’s personal bankruptcy case.
GLC’s owners had previously accused Donnan of playing a large role in the creation and execution of the Ponzi scheme that resulted in GLC’s 2011 bankruptcy filing. Donnan has repeatedly denied the claim, and has not been charged with any criminal offenses in connection with the alleged scheme.
To read more about Jim Donnan’s bankruptcy case, see our previous Atlanta bankruptcy blog post.
Source: Associated Press, “Ex-UGA coach reaches proposed deal in bankruptcy,” June 24, 2012