Ex-UGA coach didn't cheat player from Augusta, judge rules

Tuesday, Feb. 21, 2012 7:10 AM
Last updated 8:02 PM
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ATHENS, Ga. — A federal bankruptcy judge has rejected a former University of Georgia and NFL player’s claim that former UGA football coach Jim Donnan duped the player out of $2 million.

Former star linebacker Kendrell Bell -- a standout at Laney High in Augusta – claimed Donnan got him to invest $2 million in a West Virginia company that actually was a Ponzi scheme, using money from later investors, like Bell, to pay big returns to earlier investors, including Donnan.

But United States Bankruptcy Judge James P. Smith found no evidence Donnan deliberately deceived Bell in a ruling handed down earlier this month.

Donnan filed for bankruptcy protection in 2011 after the West Virginia company, GLC, filed for bankruptcy.

Bell and some other investors have objected to provisions in Donnan’s bankruptcy plan, saying Donnan talked them into investing in the company even though Donnan knew their chances of recovering their investments were slim to none.

Lawyers for Bell had asked Smith to allow the former player to claim part of Donnan’s assets ahead of other investors, even though Bell had missed a deadline to file such a claim.

Smith denied Bell permission to file the claim, however.

“The evidence establishes that, at some time, Donnan had guaranteed Bell that he would get his money back and had told Bell that he would be taken care of. However, simply making promises to take care of a creditor, and even guaranteeing payment, does not equate to deceptive conduct relating to the dischargeability objection deadline that would justify equitable tolling. In fact, the Court can find no deceptive conduct on Donnan’s part in connection with his postpetition communications with Bell,” Smith wrote. “The court finds that there has been no deception or actual fraud about the dischargeability objection deadline by Donnan in his communications with Bell.”

Donnan had helped recruit investors for GLC, according to court papers. According to Donnan, he told people about GLC because it seemed like a good investment opportunity before the company ran into trouble. Investors included well-known sports figures like Bell, North Carolina State University basketball coach Mike Gottfried, Texas Tech and former Kentucky basketball coach Billy Gillispie and Texas Tech football coach Tommy Tuberville.

The company’s owners, Greg and Linda Crabtree, claimed to be using investors’ money to buy discontinued appliances, furniture and other goods for resale. But according to court documents, the company collected some $82 million from investors and bought less than $12 million in inventory. The rest went to pay big returns to earlier investors, including the Crabtrees, Donnan and members of Donnan’s family.

Donnan and his family were among the first investors, putting about $5.4 million in GLC, then getting $14.6 million back, according to documents filed in the case.

GLC filed for bankruptcy about a year ago, owing about $27 million to investors and lenders.

Bell was the NFL’s defensive rookie of the year in 2001 after playing for Donnan at UGA, but injuries ended his career prematurely.

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rmwardsr
525
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rmwardsr 02/21/12 - 08:32 am
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Sounds like a bunch of legal

Sounds like a bunch of legal mumbo jumbo b.s. to me. Whether he was past the deadline or not, this has all the trappings of a ponzi scheme and why Donnan is not being prosecuted for this crime is beyond me.

KNECKBONE
26
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KNECKBONE 02/21/12 - 09:00 am
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thank god all my money is in

thank god all my money is in -stage coach company and betamax machines and 8 tracks .

soldout
1280
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soldout 02/21/12 - 09:24 am
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If you watch American Greed

If you watch American Greed you see people falling for this stuff all the time. You can put your money in the stock market and use a good timing system and avoid this kind of mess. Best financial advice I ever heard was "cheerfully give God 10% and save 10% and never go to bed worried about how to pay a bill"

prov227
2924
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prov227 02/21/12 - 10:09 am
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Good advice.

Good advice.

kiwiinamerica
924
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kiwiinamerica 02/21/12 - 10:54 am
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The fix is in. From the
Unpublished

The fix is in.

From the article:

".......the company collected some $82 million from investors and bought less than $12 million in inventory. The rest went to pay big returns to earlier investors, including the Crabtrees, Donnan and members of Donnan’s family."

That folks, is what you call a ponzi scheme.

The only difference between Donnan and Madoff is three decimal places (millions vs billions).

David Parker
7923
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David Parker 02/21/12 - 12:55 pm
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guaranteeing payment, does

guaranteeing payment, does not equate to deceptive conduct relating to the dischargeability objection deadline that would justify equitable tolling.

uhhhhhhhhhh

Dixieman
12942
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Dixieman 02/21/12 - 01:30 pm
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0
English language version: 1.

English language version:

1. There are deadlines for filing claims in lawsuits so that they can be resolved. Bell missed the deadline.
2. Donan didn't do or say anything to cause Bell to miss the deadline, so there is no ground for extending it.
3. Investments go up and down, and Donan's statements did not rise to the level of a formal legal guarantee.
Clear now?

Willow Bailey
20579
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Willow Bailey 02/21/12 - 01:47 pm
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Dixieman , great

Dixieman , great clarification regarding the bankruptcy filings. But, Donan and his cronies still reek of taking advantage of this simpleton, yes?

lsmith
105
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lsmith 02/21/12 - 03:41 pm
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Let's see Donan gets back
Unpublished

Let's see Donan gets back 14.5 million on a 5.5 million investment and he didn't know anything about a scam going on? That's a unrealistic return and he knew it. Looks like he helped fund this scheme in the beginning and then used his connections to keep it going. Bell was a chump but didn't deserve to lose all his money deadlines or no. Donan wasn't much of a coach, sounds like he was less a mentor and friend.
" A fool and his money are soon parted". Don't invest in flighty adventures you know nothing about. Earlier poster was right, "American Greed" program highlights just how prolific this sort of thing is.

americafirst
958
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americafirst 02/21/12 - 10:30 pm
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DixieMan, your 3rd point is

DixieMan, your 3rd point is not accurate. The judge only ruled that Donnan's post-petition (after the filing of bankruptcy) conduct was not deceptive to the point that it caused Bell not to file his claim within the deadline set by the bankruptcy court. The judge's ruling had nothing to do with whether Donnan deceived Bell with regard to his investment decision. Since Bell did not file in time and Donnan did not do anything deceptive that excused Bell from filing timely, the merits of Bell's claim will never be reached by the court.

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