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

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.