Hedge Funds Seek Bankruptcy For Ritchie Fund

Jan 2 2008 | 12:25pm ET

It’s hedge fund vs. hedge fund in the latest court battle for troubled Ritchie Capital Management. A pair of hedge funds run by Benchmark Plus Management, along with Sterling Asset Management’s Low Volatility Fund, have sued Ritchie over a failed fund in which all three invested, claiming they are owed a total of $46 million.

The suit, filed in federal court in Chicago, seeks to force the Ritchie Multi-Strategy Global fund into Chapter 11 bankruptcy protection. According to the aggrieved hedge funds, Ritchie has refused to cooperate with their investigation of possible breach of contract, and they fear the firm is using its position as controlling party to “the likely wrongful detriment of the funds’ investors.”

Ritchie’s “management activities have been conducted in complete secrecy,” the petition, filed last week, complains. “The secrecy must now end.” Benchmark Plus and Sterling are asking the court to order Ritchie to provide them the material they seek.

Lisle, Ill.-based Ritchie called the filing “unjustified and without merit.”

Faced with huge redemption requests, the firm halted withdrawals and began liquidation proceedings for the Multi-Strategy fund more than a year ago. It then sold the fund’s portfolio and another fund to Reservoir Capital Partners for $1 billion.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...