Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, May 20, 1995 TAG: 9505220045
SECTION: NATIONAL/INTERNATIONAL PAGE: A4 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: PHILADELPHIA LENGTH: Medium
U.S. Bankruptcy Judge Bruce Fox agreed to change the bankruptcy status of the Foundation for New Era Philanthropy from Chapter 11 to Chapter 7.
That means the death of the suburban Philadelphia foundation, which owes millions of dollars to some 300 creditors, including universities, museums and some of the nation's most sophisticated investors.
No timetable for repayment has been set because the organization's books are said to be in chaos.
New Era's founder, John G. Bennett Jr., requested Chapter 7 status after realizing he had no hope of reorganizing the foundation under Chapter 11, the organization's attorney, Neal Colton, told the judge.
A Philadelphia lawyer, John Carroll III, was appointed as the interim trustee of New Era's assets.
No criminal charges have been filed, but the state has accused Bennett of running a Ponzi scheme, in which yesterday's creditors are paid off with today's donations. In a lawsuit, the Securities and Exchange Commission has accused him of fraud for allegedly diverting $4.2 million to his businesses.
The FBI, the U.S. Attorney's Office and the state attorney general also are investigating. Federal agents removed five boxes of items Thursday evening from Bennett's $620,000 home, for which he paid cash last year.
New Era promised Christian charities, major museums and universities, and philanthropists it would double their money in six months with matching donations from anonymous benefactors. The foundation then was supposed to send the funds back to the nonprofit groups and to the philanthropists' favorite charities.
by CNB