Ritchie Special Credit Invs., Ltd. v. JPMorgan Chase & Co.

• Decision Date: 13 September 2022
• Docket Number: 21-2707
• Citation: 48 F.4th 896
• Parties: RITCHIE SPECIAL CREDIT INVESTMENTS, LTD.; Rhone Holdings II, Ltd.; Ritchie Capital Management SEZC, Ltd., formerly known as Ritchie Capital Management, Ltd. Plaintiffs - Appellants v. JPMORGAN CHASE & CO.; JPMorgan Chase Bank, N.A.; J.P. Morgan Europe Ltd. ; Richter Consulting, Inc. Defendants - Appellees
• Court: U.S. Court of Appeals — Eighth Circuit

48 F.4th 896

RITCHIE SPECIAL CREDIT INVESTMENTS, LTD.; Rhone Holdings II, Ltd.; Ritchie Capital Management SEZC, Ltd., formerly known as Ritchie Capital Management, Ltd. Plaintiffs - Appellants
v.
JPMORGAN CHASE & CO.; JPMorgan Chase Bank, N.A.; J.P. Morgan Europe Ltd. ; Richter Consulting, Inc. Defendants - Appellees

No. 21-2707

United States Court of Appeals, Eighth Circuit.

Submitted: March 15, 2022
Filed: September 13, 2022

Counsel who presented argument on behalf of the appellant and appeared on the brief was Patrick Henry O'Neill, Jr., of Saint Paul, MN. The following attorneys also appeared on the appellant brief; Patrick Henry O'Neill, III, of Saint Paul, MN., and Jason Johnson, of Minneapolis, MN.

Counsel who presented argument on behalf of the appellee Richter Consulting and appeared on the brief was Allen P. Pegg, of Miami, FL. Counsel who presented argument on behalf of the other appellees and appeared on the brief was Alan C. Turner, of New York, NY. The following attorneys also appeared on the appellee brief of Richter Consulting; Robert T. Kugler, of Minneapolis, MN., and Timothy Patrick Griffin, of Minneapolis, MN. The following attorneys also appeared on the brief of the remaining appellees: Scott Michael Flaherty, of Minneapolis, MN., John R. McDonald, of Minneapolis, MN., Isaac Rethy, of New York, NY., and Joshua C. Polster, of New York, NY.

Before GRASZ, STRAS, and KOBES, Circuit Judges.

STRAS, Circuit Judge.

Ritchie Special Credit Investments fell victim to a massive Ponzi scheme. Now it wants its money back. It has tried before and failed. This time it is going after a fellow creditor and a consulting firm, but it is going to leave empty handed once again. Most claims do not belong to Ritchie, and the one that could fails to state a cause of action. For those reasons, we affirm the district court's¹ dismissal of the complaint.

48 F.4th 898

I.

Ritchie made some bad investment decisions. Among the worst was trusting Tom Petters, who turned out to be a serial fraudster. Ritchie became one of his final victims after it loaned the Petters companies about $189 million. The security for the loan was stock in the Polaroid Corporation, which at the time was a wholly owned subsidiary of Petters Group Worldwide.

What Petters did not tell Ritchie was that he was operating a long-running multi-billion-dollar fraud. And to make matters worse, the entire Petters empire was on the verge of financial collapse. The situation was so precarious, in fact, that other creditors, including JP Morgan, had demanded repayment of their loans. While others were collecting, Ritchie was loaning more money.

Even with Ritchie's money, the scheme collapsed. Within months, the FBI arrested Petters and raided his corporate offices and home. In the aftermath, the...