Some highlights:
Altogether, as set forth in the complaints filed in the Litigation, the Petters Trustee, Petters Receiver and Liquidating Trustee assert that MTC received in the aggregate, approximately $8,247,319.51 in transfers from the Petters Receivership Defendants, the Vennes Parties and PCI. In particular:
a) During the period beginning on or about April 1998 and ending on or about December 2007, one or more of the Receivership Defendants made transfers totaling $ 1,979,883.00to MTC;
b) During the period beginning on or about August 2000 and ending on or about September 2005, PCI made transfers totaling $476,830.00 to MTC;
c) During the period from February 4, 1998 through May 14, 2003, the Vennes Parties made transfers, including transfers made through the Fidelis Foundation, to or for the benefit of MTC in the amount of approximately $2,817,000; and
d) During the period beginning on or about June 2004 and ending on or about July 2008, the Vennes Parties made transfers totaling $5,790,606.51 to MTC of which (i) approximately $2,689,606.51 of these transfers are asserted by MTC to be unrelated to donations made by the Vennes Parties and (ii) approximately $ 1,451,000.00 of these transfers were made by Mr, Vennes to MTC to refurbish and repair the Hope Commons Building located in Minneapolis, Minnesota, which is partially occupied by Teen Challenge under a tenant-friendly twenty-five year lease.The settlement terms:
Cash consideration: upon approval of the Settlement, MTC shall pay or cause to be paid $2,051,000.00 ("Settlement Payment" ) in settlement of the Litigation. The Settlement Payment is comprised of two components, $600,000.00 of the Settlement Payment is directed at settling all claims the Petters Receiver and the Petters Trustee have against MTC directly based on transfers to or for the benefit of MTC made by entities for which Mr. Kelley serves as receiver or trustee (the "Direct Claim Amount" ). The remaining $1,451,000,00 is directed at settling all claims the Petters Trustee and the Liquidating Trustee have against MTC resulting from transfers MTC received from either of the Vennes Parties, either directly or through the Fidelis Foundation ("Indirect Claim Amount" )....and...
Allocation of the Settlement Payment with respect to the Indirect Claim Amount: The Petters Trustee, on behalf of PCI, will receive 50% ($725,500,00) of the Indirect Claim Amount on account of his settlement of his claims that predate November 30, 2003. In general, these claims are premised on the theory that MTC was a ) 550(a)(2) subsequent transferee of transfers made initially by PCI to one or both of the Vennes Parties. The remaining 50% ($725,500.00) of the Indirect Claim Amount is allocated 50% to the Petters Trustee on behalf of PCI ($362,750.00) and 50% to the Liquidating Trustee ($362,750.00) ("Palm Beach Settlement Payment" ) according to the Allocation Agreement.MNTC also has to drop its motion to dismiss.
The settlement motion explains that there would be problems in going ahead with the clawback, including the cost of litigation and discovery and the recently passed Minnesota Uniform Fraudulent Transfer Act (MUFTA). And then there is the complication of the trial in October:
Moreover, a significant focus of the litigation will be the Vennes Parties themselves. To that end, the pending criminal case against Mr. Vennes is currently scheduled for trial in the fall of 2012. The possibility exists that discovery from the Vennes Parties may be delayed until the conclusion of that proceeding.Will we learn more about the business relationship between Frank Vennes and Minnesota Teen Challenge at the trial? Stay tuned.
