The Reformation

BFA case may inspire legislative action; investors grapple with recovering their savings

BFA has come up with a complicated plan to pay back some money to investors. It offers investors two choices: to "cash-out" for 20 cents on the dollar (up to an aggregate cap of $40 million) or to accept stock in a new company that will hold BFA's assets. They could also choose a combination of both.

If the judge approves the partial payback, investors will be asked to vote on the options in ballots that are expected to be mailed by the bankruptcy court early next year.

In Arizona some investors have organized a revolt, saying they can't trust any plan BFA puts forward.

In two separate meetings held last week at Southern Baptist churches, investors vowed to mark "NO" to both options on their ballots and push for a swift Chapter 7 bankruptcy plan, which would involve immediate liquidation of assets. They then vowed to pursue the "deep pockets" in Arizona courts. (Rebel investors even have a Web site:

"Investors are starting to get organized," says Dee Griebel, a senior vice president of Prudential Securities and a longtime critic of BFA's investment practices.

"The generic conclusion at the meetings was that money had been stolen, and you can't let the thieves who stole it the first time stay in control the second time, and that both BFA proposals must be voted down," she says.

BFA is fighting hard to regain investors' trust.

Spokesman Lew Phelps says "every single person" involved in BFA's efforts to pay back investors, including former board members Joe Panter and Marty Ryan, "was very carefully screened" by a "leading white-collar criminal attorney" and BFA's new accountants and lawyers. He says no one in power at BFA today had any part in the schemes that lead to its demise.

In a November 9 letter to investors, BFA "acting" executives Joe Panter, Mark Roberts and Mark Dickerson wrote: "We are writing in an effort to begin to face some of the disappointment and loss that many of you are experiencing . . ."

The letter goes on to express sorrow and to explain, once again, the bankruptcy plan.

Ellen McCullar, 70, a Jacksonville, Florida, widow, says she has been facing "disappointment and loss" ever since BFA froze more than $100,000 she had invested for herself and her grandchildren.

"I may have to sell my house, and I am seriously thinking of going back to work," says McCullar, who owned an air-vent cleaning business.

"But I will probably get only minimum wage," she says. "I am not up to date with technology [computers], and I don't think anyone wants to hire old people anymore.

"What breaks my heart most is, I thought after I was dead and gone, my grandchildren's investments would mature at BFA, and my grandchildren would say: 'Boy, my grandmother really cared about me.'"

To see an archive of the previously published "MoneyChangers" series, visit the New Times Web site at

Contact Terry Greene Sterling at 602-229-8437 or at her online address:

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