Former UGA coach files bankruptcy after investors demand millions
After becoming involved in an allegedly fraudulent investment scheme, former University of Georgia football coach Jim Donnan and his wife, Mary, have filed for personal bankruptcy in a federal court in Georgia. Although the Donnans are not accused of wrongdoing in connection with the alleged Ponzi scheme, they have been asked to repay more than $8 million to other investors in the scheme. Their inability to pay back such a large amount sparked their bankruptcy filing, although they reportedly also owe several hundred thousand in other debts.
Reports indicate that the Donnans were early investors in the now-defunct investment company GLD Ltd., which filed for bankruptcy in February, claiming that it owed between $25 and $30 million to its investors. Following the bankruptcy filing, investors learned that the company’s owners had been running a Ponzi scheme, allegedly paying themselves and early investors such as the Donnans instead of buying inventory for resale and expanding the company, as investors were led to believe.
Investigators have not accused the Donnans of any wrongdoing in connection with the scheme. However, because they were early investors, they received their entire investment plus several millions of dollars from GLC. Now, later investors who saw their investments go down the drain are seeking repayment from the Donnans, in hopes of recouping at least some of their losses.
The Donnans offered to pay $5 million to later investors, but that offer was declined. Because they do not have assets over that amount, the Donnans were forced to file for bankruptcy, turning the messy dispute over to a federal bankruptcy judge.
Source: Online Athens, “Former UGA coach Donnan files for bankruptcy,” Lee Shearer, 2 July 2011