This morning Tom Petters met with the employees and announced that he had resigned his position of chairman and CEO of Petters Group and all of its affiliates. He apologized to the employees and said the events of the last few days made it impossible for him to continue as a leader of the various companies.
Petters has long been known as a guy who's adept at fixing troubled companies. Now he's in a fix himself. He's the target of a federal fraud investigation. No one has been arrested or charged yet, but the FBI says it has recordings of Petters discussing the need for more capitol at his financially stressed company. The FBI says Petters repeatedly admits hoodwinking investors in the recordings.
Many people who've done business with Petters describe him as a sharp businessman, with a knack for turning around troubled companies. But they say he also cares about employees and people. They note that Petters has given millions of dollars to arts organizations, charities and schools.
George Wozniak, who owns Hobbit Travel and has a minor stake in Sun Country Airlines, which is part the Petters Group, says he knew Petters to be the guy with the golden touch.
"I've always known him to be the guy with the golden touch and wonderful to his employees and extremely generous. And a guy who seemed to worry about everybody else but himself," said Wozniak.
Former Sun Country CEO Shaun Nugent was surprised to hear of the allegations against Petters. They were revealed Friday when a search warrant for Petters' headquarters and home was unsealed.
"Tom is an extremely caring individual. I think he's a benevolent human being. He's kind," said Nugent.
Depending on where the federal government is in building its case, it could be days, weeks or months before Petters and others are indicted, if they're indicted at all.
Petters attorney Jon Hopeman says Petters maintains he's innocent.
But the federal allegations have certainly tarnished Petters' reputation as a smart and generous businessman.
Petters is no MBA whiz. He dropped out of college after one term. But he ended up a millionaire. He owns a house valued at more than $5 million on Lake Minnetonka.
Petters has been generous with his money. He has given $14 million to the business school at Miami University. He has given over $5 million to the College of Saint Benedict in St. Joseph.
Petters, a St. Cloud native, has been fixing businesses since he was 15, when the stereo shop he was working in went out of business. Since then he has revived several businesses that seemed destined to die, including Fingerhut, the catalog company that was headed for extinction a few years ago.
In an interview with Minnesota Public Radio last year, Petters said he relishes the role of fixing up down-and-out companies.
"Some people say, 'You're a bottom feeder company. You only look for opportunities when someone has failed,'" said Petters. "That's somewhat a true statement."
There seems to be no business Petters wouldn't try. His portfolio has included everything from designer swimsuits, flat-panel TVs and college student housing to biometric security systems, toasters and magazine publishing.
Fingerhut was really the first big-name company Petters invested in. That raised his profile on the Minnesota business scene.
Petters Groups says it now owns or has a stake in some 60 companies, including his most recent rescue projects Polaroid and Sun Country Airlines.
In the interview last year, Petters said he's not always successful. But he likes his batting average.
I'll tell you this, I've had my share of losses, and I've had my share of wins. Thank God, to this point my wins have been able to cover my losses," said Petters.
Sun Country Airlines is the number two airline in the Twin Cities market, carrying over a million passengers a year.
Petters has apparently provided over $20 million to help keep Sun Country flying.
Today, Sun Country said it plans to become independent of the Petters Group. To accomplish that, the airline says it plans to defer 50 percent of employees' pay until the end of the year. The airline says it has to make the move, because it can no longer tap Petters for loans.
That may be just the first crack in the Petters' financial empire. Its fate and the fate of Petters himself will become more clear as the federal fraud investigation unfolds.