Ponzi Scheming Football Coach Agrees to Bankruptcy Settlement
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Ponzi Scheming Football Coach Agrees to Bankruptcy Settlement

June 29, 2012


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Jim Donnan, the former head football coach at the University of Georgia, has agreed to pay $7.35 million to a company that claimed in its bankruptcy filing that Donnan helped bilk them out of $40 million through a Ponzi scheme.

Retail liquidation company GLC Limited, which is based in West Virginia, filed for bankruptcy after its Ponzi-like furniture selling scheme collapsed, leaving hundreds of angry investors seeking lost funds.

After the scheme collapsed, Donnan and his wife also filed for Chapter 11 protection, although their case has not yet been resolved, according to a report from the Washington Post.

But GLC Limited’s bankruptcy deal was finalized this week, and it requires that Donnan make a healthy payment of $7.35 million to the company, although the company claims the former football coach owes it closer to $13 million.

In addition to this lump sum, Donnan also agreed to repay 80 percent of the losses incurred by the individual investors whom he lured into the Ponzi scheme. Investors are claiming in Donnan’s bankruptcy case that he owes them upwards of $27 million.

When Donnan filed for bankruptcy, the automatic stay put a temporary halt to most of the legal actions pending against him, which allows him time to sort out a settlement, but does not cancel his legal obligations, especially if he actually committed a crime.

Whether Donnan committed a crime is up for dispute, as he has not been formally charged with any criminal wrongdoing, but has been dogged by claims of corruption.

After working as a football coach and an analyst for ESPN, Donnan was a "major and early investor" in GLC Limited, which had a business model that centered on buying appliances and furniture for resale.

The company promised investors an alarmingly high return of 50 to 75 percent annually, and company officials claim that Donnan recruited new investors for what amounted to a Ponzi scheme.

When the company was unable to keep up with the pace of its promised payouts, it filed for bankruptcy in 2011. Shortly thereafter, Donnan made his own personal appearance in bankruptcy court.

In addition to Donnan’s work as a recruiter, the company also claims that Donnan personally profited from money he invested in GLC Limited, although Donnan disputes this allegation, and also says he played no role in the creation of the scheme.

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