![]() Following the collapse of the scheme, Petters and his companies were placed into receivership and a number of the companies declared bankruptcy. Ritchie involved a Ponzi scheme run by Thomas Petters through various sham companies. The Petters Ponzi Scheme and Plaintiffs’ Attempt to Recover From Third Parties. Ritchie thus serves as a touchstone in disputes over standing in Ponzi litigation. Third parties may only bring particularized claims that arise from injuries “directly traceable” to the defendant’s conduct. As the Court explains, “general” claims for loss of funds belong exclusively to court-appointed bankruptcy trustees. June 30, 2021) untangles who has standing to bring claims against a third party alleged to have aided and abetted a Ponzi scheme. District Court for the District of Minnesota provides important guidance on this question. Yet receivers and trustees also often bring these claims, leading to duplicative litigation and the question of who properly “owns” the claim.Ī recent decision by the U.S. This process creates a thorny question: who may seek recovery from a third party alleged to have been involved in the fraud? Creditors that lent funds to sham companies often pursue claims against financial institutions that banked the schemers on aiding-and-abetting theories. Bankruptcy trustees are also granted the exclusive right to bring “general claims” on behalf of the entities’ creditors. As part of this process, these court-appointed parties step into the shoes of the company and may bring any litigation that the company itself could have brought. A receiver or bankruptcy trustee is then tasked with recovering any funds belonging to the estate so that they may be distributed to creditors. When the scheme is exposed, the company created by the schemer-which is usually little more than a sham entity-is placed into receivership or declares bankruptcy (or both). The collapse of a Ponzi scheme usually follows a familiar pattern.
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