Saturday, 23 July 2016
Last updated 18 hours ago
Oct 23 2008 | 12:13pm ET
A federal judge has put a stop to the avalanche of lawsuits being filed against accused Minnesota hedge fund fraudster Tom Petters, giving his companies’ court-appointed receivers the “breathing room” they asked for.
U.S. District Judge Ann Montgomery in Minneapolis put a freeze on both existing lawsuits and on the filing of lawsuits against Petters and his companies. The receivers had argued that they have been swamped by the suits, which already number more than 30, and that it is impeding their efforts to preserve what’s left of Petters’ business empire.
“We’re seeking some amount of breather room to fulfill the receiver’s responsibilities,” Steven Wolter, law partner of receiver Doug Kelly, told the judge. He said it is both costly and time-consuming to find lawyers to represent Petters and the companies in the numerous cases.
Petters, who is accused of running one of the largest Ponzi schemes in history, faces a $3 billion fraud case.
Also yesterday, another federal judge agreed to consolidate the 10 bankruptcy cases involving Petters companies into one.
“These are special circumstances, I guess,” U.S. Bankruptcy Judge Gregory Kishel said across the Mississippi in St. Paul, Minn.