News

December 18, 2012

Minnesota law helps charities limit their exposure to clawbacks

by Jon Tevlin, Star Tribune
Over the years, a very generous and well-known businessman showered Big Brothers Big Sisters of the Greater Twin Cities with money, more than $200,000 in all. For BBBS, which like most nonprofits struggled to keep its programs funded, it was welcome relief.

Unfortunately, the money didn't belong to the businessman, Tom Petters, who was eventually convicted of running one of the nation's largest Ponzi schemes.

Years after spending the money Petters gave them, BBBS and many other nonprofits faced the possibility of financial clawbacks, which would have forced them to pay back all of the money. The prospect for the agency was potentially devastating, said Robert McCollum, a board member.

"These are difficult times for all nonprofits," said McCollum. "It would have had a big impact on programs and the number of people they could serve."

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April 3, 2012

Minnesota Lawmakers Seek to Protect Nonprofits From Clawbacks

By Jacqueline Palank, Wall Street Journal
Minnesota lawmakers have passed legislation to protect nonprofits and religious groups from the so-called clawback lawsuits that are a crucial tool for recovering funds stolen from Ponzi-scheme victims.

That’s the idea behind the bill that now sits on the governor’s desk. If signed into law, the bill would limit the odds that these organizations could be sued under a current state law allowing the reversal of payments made in a fraudulent manner, according to the Star Tribune.

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April 2, 2012

Governor signs legislation protecting non-profits from Ponsi clawback claims

MINNEAPOLIS (WCCO) – It has been more than two years since Tom Petters was found guilty of running a $3.5 billion Ponzi scheme.

But the effort to recover money for Petters’ victims, some of which are in bankruptcy, has run smack into concerns by charities that received millions in donations from Petters and rely on that money to operate.

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