Many Texas residents know how challenging financial difficulties can be to recover from. In many cases, personal bankruptcy may be one way to help ease this burden.
The ex-coach of a popular southern university football team has accepted a proposed bankruptcy settlement with a company and its investors who claim that he owes them $40 million; which they claim to have lost in a Ponzi scheme. The former coach has agreed to pay retail liquidation company GLC Limited $7.35 million as a part of his personal bankruptcy settlement. GLC Limited claims the ex-coach owes them over $13 million.
The ex-coach also agreed to repay 80 percent of the losses to investors which he recruited for the liquidation company. The investors claim that they lost approximately $27 million as a result of the claimed Ponzi scheme.
The bankruptcy settlement has yet to be finalized, since it requires the court's approval. GLC Limited is being restructured in a different state from where the ex-coach had filed for a personal bankruptcy in July with his wife. This means that the bankruptcy settlement requires the approval of judges from both states.
The federal judge in Ohio, where GLC is being restructured, has already signed off on the proposed settlement. The federal judge in Georgia, where the ex-coach filed bankruptcy, has yet to approve of the repayment agreement. The ex-coach was an early investor in the liquidation company and later recruited other investors under a business scheme that promised payouts of 50 to 70 percent interest annually. He also charged commissions of more than 20 percent for convincing fellow college coaches to invest in the company.
There are several options for bankruptcy in Texas or anywhere in the United States. The most common forms of bankruptcy for individuals include Chapter 7 and Chapter 13. Each of type of bankruptcy protection offers different levels of protection and structuring to promote a successful release from financial hardship. In this instance, after a questionable business deal went bad, the ex-coach was able to use bankruptcy to confront the financial issues that developed in an orderly fashion under the supervision and control of the court.
Source: StarTribune.com, "Ex-UGA coach Donnan reaches proposed bankruptcy settlement with firm in Ponzi scheme case," June 23, 2012