Court Reinstates Lawsuit Against Former Petters Execs

A Tuesday decision by a federal appeals court reportedly reinstated Ritchie Capital Management's previously dismissed lawsuit against two former Petters executives.

The Petters saga has been more or less absent from headlines recently, but a Tuesday decision by the Eighth U.S. Circuit Court of Appeals has brought it back into the spotlight.

Soon after Minnesota businessman Tom Petters' $3.65 billion Ponzi scheme was uncovered in 2008, investor Ritchie Capital Management alleged that there was a separate fraud scheme taking place at Petters' businesses, according to a report by the Pioneer Press.

Chicago-based Ritchie Capital reportedly filed a civil racketeering and fraud suit in 2009 against Mary Jeffries, former CEO of Polaroid Corporation, and Camille Chee-Awai, former chief operating officer of Petters Capital. Neither Jeffries nor Chee-Awai were charged with a crime in Petters' Ponzi scheme-for which Petters is currently serving a 50-year prison sentence. A long list of co-conspirators are also serving prison sentences for their roles in the fraud.

U.S. District Judge James Rosenbaum reportedly dismissed the Ritchie Capital case last year and has since retired. He ruled that the case was barred by an injunction against new lawsuits involving Petters' companies-but the Tuesday decision reinstated Ritchie Capital's lawsuit against the former Petters executives and will allow the case to be sent back to federal court and assigned to a different judge, the Pioneer Press reported.

According to the Pioneer Press, Ritchie Capital has numerous complaints about the handling of the Petters case, including the appointment of Doug Kelley as receiver and trustee. (Learn more about Kelley's role in the Petters case in this feature story from the January issue of Twin Cities Business.)

To learn more about the Ritchie Capital case, read the full Pioneer Press story here.