Fraud charges swirling around Twin Cities businessman Tom Petters have spawned two more bankruptcies, including a Chapter 11 filing for Petters Company Inc., the financing arm that allegedly was used to deceive investors.
Minnetonka-based Petters Co. listed liabilities of between $500 million and $1 billion in its petition filed Saturday night in U.S. Bankruptcy Court in Minnesota. U.S. Bankruptcy Judge Gregory Kishel will preside over that case.
In a related bankruptcy filed by Petters Group Worldwide, the parent company listed liabilities of $50,000 or less.
"This action was taken as a protective measure," Andrea Miller, a Petters spokeswoman, said Monday. "It provides the court-appointed receiver, Doug Kelley, time to assess the businesses and develop plans for them that best serve the interests of their creditors, employees, suppliers and customers."
Kelley said Thursday he's evaluating which Petters' companies can be saved and which businesses should be sold or closed.
Polaroid, based in Massachusetts, remains an ongoing business. Meanwhile, Great Water Media, which published magazines in the Twin Cities, is up for sale, Miller said Monday. Magazine staff were among Petters employees laid off from their jobs on Friday.
The 20 largest unsecured creditors in the Petters Co. bankruptcy include large investment funds, a nonprofit organization and individuals.
Ritchie Special Credit Investments, based in Illinois, is listed with a claim of $111.8 million. Minneapolis-based Interlachen Harriet Investments is on the claim list for $69 million, and the Dorsey & Whitney law firm, Minneapolis, has sued Petters in an attempt to recover the Interlachen investment.