Ritchie Sues Polaroid, Calling Petters Allegations ‘Outrageous’

Mar 12 2009 | 4:11am ET

Ritchie Capital Management is fighting fire with fire: The hedge fund has countersued Polaroid Corp., calling its lawsuit against Ritchie “baseless, irresponsible and malicious.”

Polaroid’s bankruptcy trustee last month sued Ritchie and fellow hedge fund Acorn Capital Group, accusing the two of assisting the multi-billion fraud allegedly masterminded by hedge fund manager and businessman Tom Petters. According to Polaroid, Ritchie and Acorn “orchestrated efforts… to cover substantial investment losses and prefer its individual interests at the expense of Polaroid, its creditors and other stakeholders.”

Not so, says Ritchie, in a lawsuit filed yesterday asking a federal court in Minneapolis to junk Polaroid’s “outrageous” suit against it.

The trustee’s lawsuit “irresponsibly suggests, among other things, that Ritchie was aware of the fraudulent scheme perpetrated by Petters and tried to salvage its own loans at the expense of other creditors,” Ritchie says in the counterclaim. “Polaroid does not, because it cannot, directly allege that Ritchie was complicit in the fraud committed by Petters—or even suggest any means by which Ritchie could have been made aware of a fraud.”

In a statement, Ritchie accuses the Polaroid receiver, Douglas Kelley, of having a vendetta against the hedge fund, which he has lambasted for the high interest rates it charged Polaroid on several loans it made to the company while Polaroid was still run by Petters.

“The Polaroid complaint appears to be a weapon used by Douglas Kelley, receiver for Polaroid, in his efforts to silence and to retaliate and seek retribution against Ritchie for Ritchie's good faith challenges to the legitimacy of Kelley's receiverships and his installation as trustee in the bankruptcies of several of the Petters entities,” Ritchie said. “These efforts by Kelley not only unfairly hinder Ritchie's efforts to protect the interests of the investors in its managed funds, but also serve to perpetuate the receiverships.”

The Lisle, Ill.-based hedge fund has asked the court to declare its security interest in some Polaroid trademarks and in some pledged promissory notes valid and enforceable, a notion challenged by Kelley. Ritchie is also demanding that Polaroid pay its legal fees.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.