A Minnesota liberal arts college that was once a beneficiary of Tom Petters’s largesse will return $600,000 of the $3 million it received, the Wall Street Journal reported today. The College of St. Benedict, of St. Joseph, Minn., in 2003 proudly announced a $3 million gift from Petters, a local businessman, to renovate the school’s 1,078-seat auditorium. The facility was renamed the Petters Auditorium in honor of Petters’s parents. His mother was an alumna of the women’s college, while his father graduated from its brother school, St. John’s University. When Petters was arrested and charged with operating a Ponzi scheme that bilked investors out of several billion dollars. Following his arrest, his business empire — which once encompassed Polaroid and Sun Country Airlines — filed for bankruptcy protection. Officials overseeing the companies’ wind-downs has since sued those to whom Petters made payments of what was ultimately determined to be stolen funds, including charities and other organizations like College of St. Benedict (which ultimately renamed Petters Auditorium). With litigation to recover $2 million of the donated funds reaching as high as a U.S. appeals court, the College of St. Benedict and the bankruptcy trustee demanding the return of the funds participated in mediation in February. The talks yielded a settlement in which the college joined the ranks of other organizations that have agreed to return a portion of their funds.
