Creditors of alleged Ponzi-scheme company to meet Monday afternoon

Some $18 million at stake in bankruptcy of investment firm with ties to large Madison church

Email | Print By E. Thomas Wood

12-08-2006 11:20 AM —

Creditors of bankrupt Nashville investment firm Hanover Corp. will meet Monday to discuss how much, if any, of the estimated $18 million entrusted to Hanover by small-time investors can be recovered. The meeting is scheduled for 3 p.m. at U.S. Bankruptcy Court in the Customs House downtown.

The court appointed Sam Crocker of the Crocker & Niarhos law firm in Nashville as trustee in the Hanover case last month. His job is to sort out the affairs of Hanover, which has failed to account for much of the funding it took in from parishioners of Madison's Cornerstone Church and other investors as far afield as Florida and Arizona.

Attorneys representing more than 40 of Hanover's estimated 150 noteholders are now on record with the court. Many of the investors are individuals and couples who put six-figure sums into promissory notes that were supposed to pay 24 percent annual interest. Patrick and Lisa Reitmeyer, an Arizona couple who sued Hanover, founder Terry Kretz and company official Bud Thorpe before the involuntary bankrupcy petition was filed in October, called Hanover a "Ponzi scheme" in their federal lawsuit over a $734,000 investment that the company has failed to repay.

Attorneys for the creditors cancelled a scheduled deposition of Kretz and Thorpe last month when the court appointed Crocker, opting to let the trustee carry out his own investigation.