Court receiver to oversee Petters' 'entities'
- October 4, 2008 - 9:25 PM
A court receiver was appointed late last week to oversee various "entities" of Tom Petters, the jailed Twin Cities businessman who has been the subject of a whirlwind federal fraud investigation.
But it was unclear Saturday if a receivership order signed in a state court in Illinois has any effect on a company or companies whose place of business is Minnesota, as is the case with much of Minnetonka-based Petters Group Worldwide.
The appointment was made in circuit court of Cook County, Ill. Named receiver was Billy Procida of William Procida, Inc., a New Jersey management consulting firm. A spokesman for Procida said lenders representing more than $3 billion in loans to various Petters companies petitioned for Pocida's appointment.
It was not immediately clear how many Petters' companies or which interests would be under Procida's control.
Doug Kelley, the attorney retained by Petters Group to assemble a new management team to run the company, said he questioned the validity of the Illinois court order.
"Clearly that issue will have to be sorted out in court," Kelley said. "I'd like all employees and others who are part of the Petters company to know that steps have been taken to ensure an orderly process for the ongoing operation of these businesses and to ensure that the interests of no creditors are preferred over the interests of other parties. That's all that I can say about that at this time."
Petters is under federal investigation for a widescale investment operation that allegedly took billions of dollars from investors over a decade. Petters was arrested Friday and is charged with mail and wire fraud, money laundering and obstruction of justice
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