Arts Groups Study J. David Letter on Return of Funds

Representatives of several area arts organizations met Friday to consider whether they should band together to protest demands by the J. David & Co. bankruptcy trustee that they return more than $1 million in donations given them by the fraud-ridden investment firm.

Although no concrete decisions were made--and, indeed, some groups hadn’t yet received the trustee’s demand letter--the groups did agree to meet again in an attempt to collectively confront the issue.

“We all talked, but” some groups haven’t received the letter yet, according to attorney Vic Vilaplana, a volunteer vice president of the opera.

Representatives of the San Diego Opera, the San Diego Symphony and KPBS-TV met informally both on the telephone and in Vilaplana’s offices Friday to discuss the legal and financial implications of a letter mailed Tuesday by J. David bankruptcy trustee Louis Metzger.

Metzger’s letter, which demands that the charitable contributions be returned, is considered the first time such a request has been made of nonprofit organizations that received funds from a fraudulent company, according to sources familiar with the case.

Also participating in the meeting were attorneys William Nelson, the volunteer president of the Opera, which received $100,000 from J. David; Richard Page, representing KPBS-TV, which received $58,000, and Det Merryman, volunteer president of the symphony, which received $180,000.

Metzger’s letter was sent to about 30 nonprofit organizations. In it, he argued that the donations were used by J. David (Jerry) Dominelli as a marketing tool to further his Ponzi-type scheme, in which money from new investors is used to pay off existing clients.

Former J. David executive Nancy Hoover also participated in donating the funds to San Diego civic and cultural organizations.

Representatives of the La Jolla Museum of Contemporary Art, which received $110,000 from J. David, did not attend the meeting because of scheduling conflicts, according to attorney Chris Caulkins, volunteer president of the museum.

Caulkins said the museum had received the trustee’s letter, but he would not comment on what the museum’s response will be.

Merryman also said he would not comment on the issue. The symphony has more than $1 million in long-term debt and returning the funds could present a financial hardship.

Other nonprofit groups face a similar financial specter.

“Right now nothing much is happening,” Page said. “But I think it’s going to be interesting before it’s over.”

Other recipients of J. David’s largess included Scripps Clinic and Research Foundation ($10,000), the University of San Diego ($30,000), UC San Diego’s Mandell Weiss Center for the Performing Arts ($162,500), the Del Mar Foundation ($19,500) and La Jolla Country Day School ($1,000).