United States v. Ritchie Capital Management, L.L.C., No. 21-2973 (8th Cir. 2023)
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Ritchie Capital Management, LLC fell victim to a massive Ponzi scheme. Ritchie sought recovery outside the receivership. But settlement agreements and bar orders prevent recovery. The district court approved the receivership’s final accounting and a previous bar order. Claiming abuses of discretion, Ritchie appealed.
The Eighth Circuit affirmed. The court explained that the district court ordered the receiver to prepare and file a final accounting. The district court established the requirements that, in its sound discretion, the receiver satisfied in the final accounting. Ritchie fails to identify a clear abuse of discretion in the district court’s approval of the final accounting and, regardless, waived its right to do so. Further, the court held that because bankruptcy-standing doctrine independently prevents Ritchie from bringing claims related to the bankruptcy estate, and because Ritchie can still pursue personal claims against JPMorgan, Ritchie cannot identify a protected right that is deprived here.
Court Description: [Benton, Author, with Smith, Chief Judge, and Colloton, Circuit Judge] Civil case - Receiverships. In this long-running litigation arising out of Thomas Petter's billion-dollar Ponzi scheme, Ritchie sought recovery of its losses outside the receivership; however, the district court did not err in determining Ritchie's claims are barred by settlement agreements and a previous bar order in the case; Ritchie waived his ability to claim the district court abused its discretion by approving the final accounting of the receivership as he stipulated to a 2019 settlement in which he agreed not to take any action in the receivership; the district court did not abuse its discretion in accepting the final accounting.
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