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“We are not conceding anything and will defend against all of the claims,” Lindblad said.
The case is on hold awaiting consolidated orders from U.S. Bankruptcy Judge Gregory Kishel that would impact that case and others, she said.
Crown Bank opened its doors in 2000 and caters to wealthier clients and their businesses. It is one of six banks targeted in the more than 200 clawback lawsuits that Kelley has filed against individuals and organizations he claims benefited from Petters’ scheme.
The banks include JPMorgan Chase & Co., from which Kelley is seeking $25 million; Associated Bank based in Green Bay, Wis.; Chicago-based BMO Harris Bank as successor to M&I Bank; Home Federal Savings Bank in Rochester; and Signature Bank in Minnetonka. None of the banks have settled yet.
To date, Kelley has collected $310 million for the bankruptcy estate, including $72 million in clawbacks. The list of clawback targets could grow longer, and existing targets could be on the hook for even more, given a recent court ruling.
Last month, Kishel ruled that clawbacks to recover “false profits” from Petters’ investors can go back farther than the normal six-year statue of limitations, up to 13 years from the 2008 bankruptcy filing.
Petters is serving a 50-year sentence in Leavenworth, Kan.
A dozen others have acknowledged guilt or were convicted in nearly five years of criminal investigations related to the Petters saga. The criminal drama largely came to a close with last month’s conviction of Twin Cities hedge fund manager James Fry.
Jennifer Bjorhus • 612-673-4683