San Diego

The Child Abuse Prevention Foundation has settled out of court with the bankruptcy trustee of the fraud-ridden J. David & Co. “It’s going to drain us, but at the same time we feel we should pay it back,” executive director Mimi Groom said.

Groom agreed to pay back $3,000 of the $6,700 the bankrupt investment firm donated to the foundation, trustee Louis Metzger confirmed. The foundation is one of two nonprofit organizations that have so far settled with the trustee. In February, Metzger mailed letters to 25 charitable organizations demanding the return of more than $1 million donated by J. David & Co. as well as the firm’s principals, J. David (Jerry) Dominelli and Nancy Hoover. Metzger offered the charitable recipients of the J. David largess complete settlement of their accounts if they return 60% of the funds demanded by the trustee.

“I see no reason why they should not return the funds,” Metzger said of the foundation. “I can’t help believing that the people may turn it to their advantage.”

Indeed, Groom, who reached an agreement with the trustee last week, hoped others would respond to their good faith.

“Perhaps the investors will help us recoup (the $3,000),” she said. The Child Abuse Prevention Foundation granted $280,000 to 15 agencies in 1984, Groom said.