A Sonoma State University foundation that provides scholarships to students stands to lose hundreds of thousands of dollars because it lent $1.25-million to a financier and former board member who is facing bankruptcy, a newspaper reported.
The Sonoma State University Academic Foundation issued more than two dozen loans to individuals and businesses during the 1990s and earlier this decade, according to the newspaper, The Press Democrat, in Santa Rosa, Calif. One of the recipients, Clem Carinalli, told the nonprofit foundation that he would stop making interest payments on his loan because the real-estate crash had ruined his financial position. He said he might be able to repay the principal in three to four years. That means the foundation stands to lose up to $350,000 in interest payments, and more if Mr. Carinalli is unable to repay the principal in full.
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