Ritchie Sues Hedge Funds Seeking Bankruptcy For Multi-Strat Fund

Feb 8 2008 | 12:52pm ET

Troubled Ritchie Capital Management is hitting back at its adversaries, suing several investors—including a pair of hedge funds—that are trying to force one of its funds into bankruptcy.

In a complaint filed in Cook County Circuit Court, Lisle, Ill.-based Ritchie accused its inquisitors of violating confidentiality clauses prohibiting public criticism. According to the firm, comments from the lawyers for Benchmark Plus Management and Sterling Asset Management, which are seeking to have the Ritchie Multi-Strategy Global fund declared bankrupt, have made it more difficult to liquidate the fund’s portfolio at the highest possibly prices.

Ritchie called the move “a last resort to prevent further injury,” asking a judge to bar the investors from making further injurious remarks, as well as unspecified monetary damages.

Jeff Marwil, an attorney for the investors, called Ritchie’s suit “nonsense.”

In December, Benchmark and Sterling asked a U.S. Bankruptcy Court judge in Chicago to place the Multi-Strategy fund into Chapter 11 bankruptcy, claiming they are owed $46 million and that Ritchie has stonewalled their attempts to investigate possible breach of contract. Ritchie counters that the fund continues to pay its bills as they fall due.

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