While planning for retirement after 30 years of serving St. Mary Catholic Church in downtown Nashville, the Rev. James Norman Miller entrusted Eric Peterson with his finances. Peterson, who claimed to have experience in business and investments, sounded knowledgeable — and allegedly assured Miller there would be 7.25 percent interest return on his loans.
So Miller, with little background in business or finances, started signing promissory notes to Peterson in 2009. In June 2011, Miller upped his investment with Peterson to more than $200,000 — a sum accumulated after years of frugal living. The notes included a stipulation that Peterson’s promised repayments would transfer to the Abbey of Gethsemani in Kentucky after Miller’s death.
And while Miller received some repayments, including one left under a mat at Miller’s residence, the money eventually stopped coming.
“Father Miller will continue to search for answers, petition for repayment of his assets, and repair the damage resulting from a breach of his trust,” said Miller’s attorney, William Haynes III.
Unfortunately, Miller wasn’t alone. He and a list of other creditors are claiming Peterson owes them millions of dollars. Creditors first filed an involuntary bankruptcy petition against Peterson and two related entities, Peterson Enterprises and Peterson Insurance, in August 2012.
The circumstances were almost all the same: Peterson convinced individuals to make investments or loans — with the promise of repayment with interest. Most of the repayments weren’t made.
And Miller wasn’t the only clergyman involved in the filing.
The Rev. Sidney Maddox also invested money with Peterson. In that case, Peterson served as a financial officer for Maddox’s church and gained his trust. Peterson told Maddox that he had clients who were worth in excess of $40 million, according to court filings.
Maddox invested $341,000 with Peterson, but repayments halted. Maddox, who was once president of the Kentucky Baptist Convention, died at the age of 96 in November — less than a week after a claim was filed on his behalf in the bankruptcy case.
A lawsuit filed in Davidson County Chancery Court last spring sheds some light on Peterson’s financial history. Peterson’s father, Howard, owned the Peterson Machinery Co. When Howard Peterson died in 1992, he disbursed his portion of an entity called Seventh Avenue Properties to his sons, including Eric Peterson, who already had smaller stakes in the partnership.
SAP owned a parcel of land at 309 Seventh Ave. S. in downtown Nashville. The United Methodist Publishing House bought that land in 1998 for $1.28 million — adding an influx of cash into the SAP partnership. (The parcel is now part of the Music City Center.)
But Peterson’s partners in the SAP, including his brothers Trent and Tevin, sued him earlier this year, claiming they haven’t seen any of the money from that land sale — or funds from other properties owned by SAP in Green Hills and Destin, Fla.
The first sign that something was wrong came in April 2012 when Peterson called his brother Trent — who he allegedly hadn’t communicated with in two years — and requested $20,000 urgently. Peterson said he needed the money to pay off taxes on the Destin property, according to the lawsuit.
Peterson told his brothers that he had been sick for the past two years and that his life was in shambles, the suit claims. He claimed a client had “taken him to the cleaners” — and he was awaiting a $250,000 payment.
But Trent Peterson claims Eric Peterson told him in a conversation earlier in the year that everything was going well. His brothers claim Peterson has withheld information about SAP’s financial status.
The suit asks the court to oust Peterson from the partnership — and for him to pay back all the money he transferred out of SAP. The case has since been closed pending Peterson’s hefty bankruptcy case.
Overall, Peterson’s bankruptcy cases contain more than a dozen creditors, including the two clergymen, claiming more than $6 million. Separate filings ask the bankruptcy court not to discharge the debts due to fraud, embezzlement and larceny.
Peterson declined to comment when contacted through his legal counsel, Charles Pickrell.
A meeting of Peterson’s creditors is set for Jan. 28.