wfn.org | United lawsuit settled

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"UNITED METHODIST DAILY NEWS" by SUSAN PEEK on Aug. 11, 1991 at 13:58 Eastern,
about FULL TEXT RELEASES FROM UNITED METHODIST NEWS SERVICE (3323 notes).

Note 3322 by UMNS on Dec. 4, 1996 at 16:54 Eastern (2950 characters).

SEARCH: United, New Era, Prudential, bankrupt, investment
Produced by United Methodist News Service, official news agency of
the United Methodist Church, with offices in Nashville, Tenn., New
York, and Washington.

CONTACT: Linda Green                             610(10-71B){3322}
         Nashville, Tenn. (615) 742-5470              Dec. 4, 1996

United Theological Seminary to receive 
Christmas present from New Era broker

                 by United Methodist News Service 

     United Methodist-related United Theological Seminary, Dayton,
Ohio, and other non-profit organizations received an early
Christmas present Nov. 15 when they learned that Prudential
Securities, broker for the now bankrupt Foundation for New Era
Philanthropy, plans to pay $18 million to settle four lawsuits
brought against it by some institutions that lost money to New
Era.
     The 126-year-old seminary, which lost a $1.75 million
investment, joined 30 other nonprofit institutions in May to sue
Prudential for the role it played in the debacle.  
     The Foundation for New Era Philanthropy, which obtained
investments from schools, colleges and nonprofit institutions, was
charged by federal investigators with running a Ponzi scheme -- an
investment swindle that pays off early investors with money from
later investors. The foundation filed for bankruptcy in 1995 after
Prudential Securities sought to collect on a $45 million line of
credit it had extended to New Era founder John G. Bennett Jr. 
     Although settling the lawsuits against Prudential were
approved by a federal district judge, it must also be approved by
a Philadelphia federal bankruptcy judge. If approved, Prudential's
lawyers anticipate the brokerage firm will be released from other
suits against it.
     According to Janine Armitage, United seminary's vice
president of administration and treasurer, "we are glad to see
this wrapped up."  She said that when the settlement from
Prudential goes through the bankruptcy estate, United anticipates
receiving a check, before Christmas, for 65 percent of the $1.75
million it lost. She said that the seminary also will receive a
check for 25 percent by Easter.  "We will get 85 to 90 percent of
our money back, which is truly a miracle in any bankruptcy, but
especially in a scheme like this." 
     After New Era collapsed, more than 600 religious groups,
schools, colleges, museums and philanthropies estimated their
total losses to be more than $500 million. At that time, the
philanthropic organization claimed assets of $34 million.
     The investors were alerted on Aug. 22 that a U.S. bankruptcy
judge had approved a $39 million settlement allowing the
organizations that lost money to receive as much as 65 cents on
the dollar invested. Much of that money was to come from agencies
and groups that already had received money from their New Era
investments.
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