Jim Donnan has agreed to settle a lawsuit filed by an Ohio-based company alleging the former University of Georgia football coach played a principal role in orchestrating a "far-reaching Ponzi scheme."
Donnan and his wife, Mary, who was also named in the suit, will transfer liquid assets totaling roughly $5.5 million to GLC Limited, according to court papers filed Tuesday by the couple's lawyers.
The deal, subject to approval by a federal judge, would seem about as favorable as the Donnans could have expected. In late July their attorney, Ed Tolley, said he was "optimistic" of reaching a negotiated settlement between $5 million and $8.25 million with GLC's bankruptcy estate and creditors.
"There is no dispute that the Donnans (including their immediate family members) were the largest net winners of all investors in GLC as they received from GLC approximately $9,157,000 more than they invested," the motion to approve the agreement states.
The retail liquidation company, which attracted investors including well-known college football coaches Tommy Tuberville, Frank Beamer and Barry Switzer, filed for bankruptcy in February.
GLC's lawyers described in court papers a financial scheme in which the company relied on a "continuous influx" of cash from investors to pay off obligations to previous investors at a minimum 50 percent interest.
Donnan, they alleged, was "substantially, if not principally, responsible for the initiation and operation of a far-reaching Ponzi scheme" that cost investors $27 million.
Tolley has maintained his client's innocence, telling the Atlanta Journal-Constitution in late July, "a lot of people were fooled [in the alleged scheme], including, I submit to you, Jim Donnan."
The assets to be transferred by the Donnans to a GLC trust include properties, stocks and insurance policies. Among the items excluded from the trust: football memorabilia, a fur coat, Rolex watches, golf clubs, a shotgun and the couple's Athens residence.
The 66-year-old Donnan coached at UGA from 1996 to 2000, finishing with a 40-19 record. He hasn't coached since, working as a football analyst for ESPN before effectively retiring in 2009. That same year he was inducted into the College Football Hall of Fame primarily due to four appearances in the Division 1-AA championship game when he was head coach at Marshall University.
Staff writer Tim Tucker contributed to this article.
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