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January 31, 2023

PwC Is Raking It In on Old Fraud

As the multibillion-dollar scheme led by Tom Petters approaches its sixth anniversary, the meter is still running for the lawyers and accountants sorting through the corporate empire created by the former Wayzata businessman, and the array of creditors and investors who did business with him.

More than $83 million has been paid to the lawyers and accountants working on the Petters bankruptcy after a federal bankruptcy judge last week approved $3.5 million for another stretch of legal work.

So far, trustee Doug Kelley and a team of lawyers and accountants have recovered nearly $400 million in various legal proceedings, including funds from the sale of Sun Country Airlines and Polaroid, both of which were owned by Petters.

The recovery ratio to date is $5 recovered for every $1 spent on professional fees. By comparison, in the bankruptcy of convicted New York Ponzi schemer Bernard Madoff, the recovery ratio is approximately 10 to 1 ­— legal fees totaling $927 million on recoveries reaching $9.8 billion. [Minneapolis Star Tribune]

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