More than $83 million has been paid to the lawyers and accountants working on the Tom Petters bankruptcy. A federal bankruptcy judge last week approved $3.5 million for another round of legal work.
So far, trustee Doug Kelley and his team of lawyers and accountants have recovered nearly $400 million in various legal proceedings. But they haven’t got much bang for the buck. The ratio is $5 recovered for every $1 spent on fees for attorneys and accountants. By comparison, the Bernie Maddoff recovery ration was $10 recovered for every $1 on legal fees.
Kelley predicts that ratio will improve a lot in the coming months. He has several pending clawback lawsuits in excess of $100 million that could lead to more money being recovered. There are approximately 75 such claims that are in the neighborhood of $1.7 billion including principal and interest.
“It’s taken a lot of front-end legal and accounting work to get to this stage,” Kelley said. “The percentage will look a lot better as we make more recoveries.”
Since the fraud was first revealed in September 2008, 13 people have been convicted on criminal charges related to the Ponzi scheme, including Petters, who is serving a 50-year sentence in a federal prison in Leavenworth, Kan.