The corporate venturing unit of collapsed business conglomerate Petters Group Worldwide has reportedly been sold to the businessman behind one of its portfolio companies, pending court approval.
Ernest Demaray, co-founder of Symmorphix, will pay $600,000 for the remaining patents and assets of Springworks, according to court filings seen by the Pioneer Press.
The court filings were made in a federal civil case that stemmed from the collapse of Petters’ business group in 2008 when a $3.5bn Ponzi scheme, or fraud, was uncovered and Petters Group Worldwide filed for Chapter 11 bankruptcy. Tom Petters, founder of his eponymous company, was convicted in 2009 on 20 counts of fraud and is serving a 50-year prison sentence.
Springworks had invested in Symmorphix across three different rounds of fundraising worth an aggregate $44m from the late 1990s before Symmorphix defaulted on its obligations to Springworks in 2007, and Springworks gained control of the patents.
A hearing is scheduled for January by the court to approve the sale to Demaray.