USA v. Petters, et al.

Filing 3223

ORDER TERMINATING THE RECEIVERSHIP OF DEFENDANT THOMAS J. PETTERS AND DISSOLVING THE PRELIMINARY INJUNCTION; granting 3214 Plaintiff United States of America's Motion to Dissolve the Preliminary Injunction and to Terminate the Receivership of Defendant Thomas J. Petters (Written Opinion). Signed by Judge Ann D. Montgomery on 1/8/2021. (TLU)

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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

UNITED STATES OF AMERICA,
Plaintiff,
v.
THOMAS J. PETTERS, et. al.,

ORDER TERMINATING THE
RECEIVERSHIP OF DEFENDANT
THOMAS J. PETTERS AND
DISSOLVING THE
PRELIMINARY INJUNCTION
Civil No. 08-5348 ADM/TNL

Defendants,
DOUGLAS A. KELLEY,
Receiver.
______________________________________________________________________________
Steven E. Wolter, Esq., Kelley Wolter & Scott, P.A., Minneapolis, MN, and James A. Lodoen,
Esq., Spencer Fane LLP, Minneapolis, MN, on behalf of Receiver Douglas A. Kelley.
Receiver Douglas A. Kelley, Minneapolis, MN.
Gregory G. Brooker, Assistant United States Attorney, Minneapolis, MN, on behalf of Plaintiff
United States of America.
Patrick H. O'Neill, Jr., Esq., Larson King, LLP, Saint Paul, MN, on behalf of Ritchie Capital
Management, L.L.C.; Ritchie Special Credit Investments, Ltd.; Rhone Holdings II. Ltd.;
Yorkville Investment I, L.L.C.; and Ritchie Capital Management SEZC, Ltd. f/k/a Ritchie
Capital Management, Ltd.
______________________________________________________________________________
On January 6, 2021, the Court heard oral argument via video conference on the motion
[Docket No. 3214] of Plaintiff United States of America (the “Government”) to dissolve the
preliminary injunction and to terminate the receivership of Defendant Thomas J. Petters
(“Petters”). No objections to the Motion were filed or raised at the hearing.
A Response [Docket No. 3220] to the Motion was filed by Ritchie Capital Management,
L.L.C.; Ritchie Special Credit Investments, Ltd.; Rhone Holdings II. Ltd.; Yorkville Investment

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I, L.L.C.; and Ritchie Capital Management SEZC, Ltd. f/k/a Ritchie Capital Management, Ltd.
(collectively, the “Ritchie Entities”). The Ritchie Entities state that they do not object to the
Motion. However, the Ritchie Entities request that the order terminating the Petters receivership
include a formal procedure for accessing documents in Receiver Douglas A. Kelley’s (“Receiver
Kelley”) possession. The documents sought by the Ritchie Entities include asset disclosures and
asset search data for Petters, as well as discovery-related materials from litigation brought by
Receiver Kelley and trustees of the Petters-related bankruptcy estates against JPMorgan Chase &
Co. (“JPMC”). Although the Receiver and trustees settled their lawsuits against JPMC in 2018,
the Ritchie Entities seek access to the formal discovery from that litigation to enable their
pending suit against JPMC. See Order Approving Settlement Agreement [Docket No. 2990]
(approving Receiver’s settlement with JPMC); Ritchie Capital Mgmt., L.L.C. v. JPMorgan
Chase & Co., No. 14-4786 DWF (D. Minn.) (pending lawsuit). The Ritchie Entities also stated
at the hearing that the final accounting for the receivership should include the amount of money
collected, the expenses paid, and account for the distribution of the receivership proceeds.
The Government filed a Reply [Docket No. 3221] stating that the Ritchie Entities do not
object to the Motion, and that the Motion should be granted. The Government also states that
procedures for retaining and accessing documents in the Receiver’s possession can be addressed
during the 45-day period after the receivership is terminated. The Government further states that
access to the documents in the Government’s possession is governed by the procedures set forth
in the Freedom of Information Act.
Counsel for Receiver Kelley stated at the hearing that discovery from the Receiver and
trustees’ litigation against JPMC is subject to confidentiality agreements, and that the Ritchie

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Entities should obtain the information they seek directly from JPMC as the litigant in the Ritchie
Entites’ pending action. Receiver Kelley also stated that the receivership documents will be
retained for a period of time, and that some receivership funds will be held back to cover the cost
of storing the documents.
Given the lack of objection to the Government’s Motion, the Court grants the Motion as
requested. Procedures for retaining and accessing receivership documents can be addressed in
the 45-day period following this Order, as can any issues regarding the final accounting for the
receivership. As the Court stated at the hearing, the receivership shall not be used as a vehicle
for discovery in the Ritchie Entities’ lawsuit against JPMC, and all documents governed by a
confidentiality agreement will remain confidential.
Based on the supporting briefing, the arguments of counsel, and all of the files, records,
and proceedings herein, IT IS HEREBY ORDERED that Plaintiff United States of America’s
Motion [Docket No. 3214] is GRANTED as follows:
1)

The Court’s preliminary injunction in this case is dissolved as of the date of this

2)

The Court’s receivership orders pertaining to Petters, including any entity or

Order;

subsidiary 100% owned or controlled by Petters, and all other defendants in this action are
terminated as of the date of this Order;
3)

The Court-appointed Receiver, Douglas A. Kelley, is discharged of his

receivership obligations, with the exceptions set forth herein;
4)

The Court shall retain jurisdiction over the receivership to resolve any and all

issues regarding receivership expenses, the receivership's administration, and the accounting

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required by the subsequent paragraph of this Order;
5)

The Receiver shall, within forty-five (45) days from the date of this Order, file

with the Court an accounting of the Petters receivership account from its inception to the date of
this Order. The accounting shall include a description of the value of all assets taken into the
receivership and all expenses associated with the receivership. The Receiver shall, within 45
days from the date of this Order, also file any final fee petitions.
BY THE COURT:

s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT COURT
Dated: January 8, 2021

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