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New York (HedgeCo.Net) – Barclays Bank Plc has sued Chicago-based Ritchie Capital Management and the hedge fund’s principal Thane Ritchie, accusing them of concealing a $150 million investment in the controversial and now collapsed Petters Group Worldwide LLC.
According to the complaint filed on November 18th, Thane Ritchie gave the go-ahead to invest “significant sums” from two of Petters’ hedge funds, at a time when the funds were “supposed to be winding down.”
Barclays is seeking $380 million they believed they are owed from Ritchie and 19 other related businesses.
“Barclays’ lawsuit lacks merit as a matter of law and is premised upon inaccurate and misleading factual contentions,” said Justin Meise of River Communications who handled Ritchie’s public relations. “We will vigorously defend this baseless action.”
Tom Petters, head of the now bankrupt Petters group is being held without bail in a Minnesota jail after suspicions of leading a $3 billion fraud. Although Petters is in custody, he has not yet been charged with anything.
Ritchie has claimed that they lost a total of $275 million in the Petters matter. Ritchie Structured Investments Ltd. And Ritchie Targeted Investments Ltd, the two hedge funds being targeted by Barclays, are ironically not listed on Petters’ debt schedule.
Ritchie set a precedent earlier this year when a Chicago judge denied a request by investors to open up Ritchie’s books after its Multi-Strategy Fund experienced losses.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – South Florida-based hedge fund Palm Beach Finance Partners LP says it lost more than $1 billion to the company run by famed fraudster Tom Petters.
Petters headed Minnesota-based Palm Beach Finance Holdings Inc. before being charged in September with money laudering, obstruction of justice and mail and wire fraud that were used to fund his extravagant south florida lifestyle.
Petters allegedly masterminded a scheme that bilked over $3 billion out of trusting investors by setting up fake companies in which he supposedly was invested in. Petters has been slammed with lawsuits in recent months, forcing a judge to freeze any further lawsuits until things can be sorted out.
According to the Palm Beach Post, five investors in Palm Beach Finance Partners have appointed New York law firm Sadis & Goldberg to probe deeper into whether the hedge fund properly managed their funds and whether or not the highly recommended due diligence was performed.
Petters, who currently resides in a Minnesota jail far from his $9 million oceanfront mansion, insists he is innocent. He currently has over 30 civil suits pending against him.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Former hedge fund manager turned ponzi-schemer Tom Petters is being sued by so many parties that the Minneapolis federal judge actually had to call a “timeout” yesterday.
Judge Ann Montgomery called the cease-fire after court-appointed receiver Doug Kelley pointed out that the dozens of mounting civil legal actions are interfering with their attempts to salvage some of Petter’s enterprises.
“We’re seeking some amount of breathing room to fulfill the receiver’s responsibilities,” law partner Steven Wolter told Judge Montgomery.
Petters multiple businesses, many of which are in bankruptcy, have been reduced to a single case. U.S. Bankruptcy Judge Gregory Kishel gave the order to consolidate 10 companies into one bankruptcy petition so that they may be easily dealt with.
The civil suits against Petters are coming from multiple states, with the count now over 30. Wolter argued that both time and money are issues when it comes to trying to find legal representation for the companies.
Petters Group Worldwide filed for Chapter 11 bankruptcy earlier this month after feds launched a probe into the alleged $3 billion scam orchestrated by Tom Petters. He was arrested and sent to jail on charges on money laundering, wire fraud, mail fraud and obstruction of justice.
For now, all of the civil suits are frozen until further notice. No new suits can be filed at this time.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Petters Group Worldwide has filed for Chapter 11 bankruptcy protection after feds launched a probe into an alleged $3 billion scam that was said to be orchestrated by the founder. The subsidiary company under investigation is Petters Co. Inc., a Minneapolis-based venture capital firm.
In a ponzi-like scheme, Tom Petters allegedly used new money brought in by investors to fund his lavish lifestyle by creating false retail transactions.
The company has not made any comments on the pending fraud case, only that filing for bankruptcy was “in the best interest” of the business and that the receiver will “assess the business and develop plans for them that best serve the interests of their creditors, employees, suppliers and customers.”
In addition to the federal probe, PCI also has big-time Chicago hedge fund Ritchie Capital Management to deal with. Ritchie has claimed that it lost $275 million as a result of the scam, and they want that money back.
However, there is some question as to whether Minnesota or Illinois should have jurisdiction regarding the Ritchie case. R.J. Zayed, the attorney representing Ritchie, wants the matter handled in Illinois court, saying, "We’re not just creditors, we’re victims of fraud."
This is the second fraud-related scheme that Ritchie Capital has found itself in the middle of as of late. The fund had recently purchased several hundred million dollars of life insurance from Coventry First, a Pennsylvania-based life insurance company. It was eventually found out that Coventry was defrauding clients out of millions of dollars by paying insurance brokers to suppress competitive bids.
Tom Petters was arrested earlier this month with charges of money laundering, wire fraud, mail fraud and obstruction of justice. He was denied bail.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York Post – Billionaire Tom Petters fancied himself the next Warren Buffett – that is until his empire starting crashing down like a house of cards.
The feds accuse Petters, one of Minneapolis’ fastest rising business stars, of secretly being at the center of an elaborate $2 billion corporate ruse, stretching over the past decade, while he hobnobbed with billionaires and movie stars.
Petters stepped down from his Minneapolis-based Petters Group Worldwide after federal agents raided his offices in several cities, acting on a tip from a disgruntled insider.
