Investors to get some cash back from Petters crony

Updated: March 24, 2011 - 9:19 AM

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Investors with Frank Vennes, the unindicted co-conspirator of former Wayzata businessman Tom Petters, will get 35 to 74 cents on the dollar for their losses in the state's largest fraud, according to a court order filed Tuesday.

Three banks whose loans were secured by assets of Vennes will receive 65 percent to 74 percent of their losses, or $11.4 million.

Investors with personal guarantees by Vennes will receive half of their losses, while those without personal guarantees will recover about 35 percent of their losses. This group will receive $16.4 million.

Under Vennes' direction, investors, including faith-based organizations, invested millions with Petters, not knowing that Petters was operating a multibillion-dollar Ponzi scheme.

Like Petters, the estate of Vennes has been under the control of a court-appointed receiver since 2008, when the fraud was exposed. The receivership of Minneapolis attorney Gary Hansen is dissolved in the same order by U.S. District Judge Ann Montgomery.

The plan was opposed by Petters receiver and bankruptcy trustee Doug Kelley, who wanted the proceeds from both estates combined for distribution.

DAVID PHELPS

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