Clearer Picture Emerges of Charity Foundation’s Winners and Losers
PHILADELPHIA (AP) _ The University of Pennsylvania and the Pennsylvania Academy of the Fine Arts together made $3.6 million from investments with a now-bankrupt charity that made grand promises to its investors.
Philanthropist Laurance Rockefeller lost $3 million, according to papers filed in U.S. Bankruptcy Court.
Interim bankruptcy trustee John T. Carroll III filed roughly 500 pages of documents just before midnight Friday, including the first list of net winners and losers among the Foundation for New Era Philanthropy’s 255 investors. The filing represents the clearest, albeit incomplete, picture yet of New Era’s finances.
``In this filing we have attempted to reflect the true state of New Era’s affairs by ... using a net-cash basis in order to determine each creditor’s actual loss,″ Carroll said.
As a result, some nonprofit groups listed as creditors when New Era declared bankruptcy on May 15 probably won’t get the matching funds they were promised, but suffered no actual loss of their investments.
The university and the Academy of the Fine Arts had a combined net profit of $3.6 million from their investments. Rockefeller had a $3 million net loss.
Before it collapsed, the foundation had promised hundreds of charities, universities and museums nationwide that it would double their money in six months. Investors were told that anonymous donors would provide matching grants.
Lawyers for the Radnor-based foundation said its president, John G. Bennett Jr., has admitted that the anonymous donors never really existed. Prosecutors claim New Era ran a Ponzi scheme, paying earlier investors with deposits from newer participants. The organization listed $551 million in liabilities and $80 million in assets when it declared bankruptcy.
According to the filing by Carroll, investors deposited more than $225.9 million with New Era and received $153.3 million back, for a net loss of $97.9 million.
Some of the specific findings show:
_The University of Pennsylvania had a $2.1 million net gain.
_The Pennsylvania Academy of the Fine Arts had a $1.5 million net gain.
_The Academy of Natural Sciences gained $240,500 on a $5.1 million investment.
_Rockefeller’s wife, Mary French Rockefeller, lost more than $435,500.
_CB International in Wheaton, Ill., lost $2.3 million.
_Covenant College in Lookout Mountain, Ga., had a $1.15 million net loss.
_The MacLellan Foundation in Chattanooga, Tenn., had a $1.7 million net loss.
``The people who are in a positive position should return the money that they got because the money they received was other people’s money,″ trustee’s attorney Albert Ciardi Jr. told television station WPHL.
Carroll said no decision has been made yet about who will be required to return money. He has invited all creditors to a meeting scheduled for June 26 in Philadelphia.
``The academy is more than happy to go ahead with whatever the court says is an equitable solution,″ Academy of Natural Sciences President Keith S. Thomson told The Philadelphia Inquirer.
The court documents leave questions about some of New Era’s largest creditors _ individuals and institutions. No financial information was given for Lancaster Bible College, listed in the initial bankruptcy filing as the top contributor among charities, with investments of $16.9 million.
The court records listed as ``unknown″ the losses of New Era’s top individual donors, Clair Leaman of Coatesville and the Rev. Glenn Blossom of Chelten Baptist Church in Dresher. Leaman, who does missionary work, was listed in the original filing as having made $18.3 million in investments compared with Blossom, who invested $27.5 million.
Earlier this week, a judge denied a request from Bennett and his wife to increase their monthly living allowance from $5,000 to $9,880. Bennett said their monthly expenses included $975 for phone bills, $70 for cable TV and $125 for lawn care.