Minn. College to Cede $600,000 of Financier Felon’s Gift

The College of St. Benedict has agreed to give up one-fifth of a $3-million gift it received from convicted Ponzi schemer Tom Petters in 2003, writes The Wall Street Journal.

The $600,000 from the St. Joseph, Minn., liberal-arts college will go into a cash pool for creditors of Mr. Petters, his foundation, and his businesses. Mr. Petters was convicted in 2009 of bilking investors out of several billion dollars and is serving a 50-year prison sentence. Officials overseeing the bankruptcy of his former business empire have sought to claw back funds from recipients of his largesse.

The 2003 gift funded renovation of the college’s 1,078-seat auditorium, which was renamed Petters Auditorium in honor of the donor’s parents. The name has since been changed. The repayment is part of a settlement between St. Benedict and the Petters bankruptcy trustee, which sued to recover the donation. The deal is to be reviewed this month by both a U.S. district court and a U.S. bankruptcy court.