Tom Petter Scandal

Topics: Fraud, Petters Group Worldwide, Tom Petters Pages: 3 (1029 words) Published: April 27, 2009
Petters Company International Scandal: The big hurt….

In 1988, Thomas Petters moved back to Minnesota and founded Amicus Trading, a wholesale brokerage; the name was later changed to The Petters Company, and it marketed consumer merchandise. In 1995 he started Petters Warehouse Direct to sell closeout, overstock and bankrupt company merchandise from a store in Minnetonka, Minnesota, additional locations followed in the Twin Cities and greater Minnesota. In 1998 he went online to sell discounted merchandise through, operated by RedTag Inc.; by 2000 he sold his Petters Warehouse Direct stores to focus on his online business, based in Eden Prairie, Minnesota. He teamed up with direct-mail merchandise company, Fingerhut Companies Inc., in 2001 to start a new online store,, which reported sales of $1 billion per year at one point. When Fingerhut's owner, Federated Department Stores, decided to sell or close the company in 2002, Petters, teaming with former Fingerhut chairman Ted Deikel, made an offer to buy the Fingerhut name, customer list, and buildings in St. Cloud, Minnetonka, Plymouth, Minnesota and Tennessee. The purchase was made in June 2002 and all of Petters' operations moved into Fingerhut's former headquarters in Minnetonka. Deikel took over Fingerhut Direct Marketing Inc., which created the catalogs and Petters took over with Fingerhut Fulfillment, based at a St. Cloud distribution center; the new Fingerhut restarted with online and catalog sales in November 2002. In April 2003, The Petters Group, with two minority investors, purchased uBid. The same month, Fingerhut Direct Inc. announced it has obtained a $100 million line of credit to finance inventory and receivables. In January 2005, Petters Group Worldwide purchased the Polaroid brand for $426 million, with plans to use it on consumer electronics and new technologies. In 2006, Petters Group Worldwide acquires Sun Country Airlines. Petters Group Worldwide became a diverse...
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