United States Court of Appeals

For the Eighth Circuit 

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No. 21-2707

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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

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Appeal from United States District Court 

for the District of Minnesota

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Submitted: March 15, 2022

Filed: September 13, 2022

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Before GRASZ, STRAS, and KOBES, Circuit Judges. 

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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 
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state a cause of action. For those reasons, we affirm the district court’s1 dismissal 

of the complaint. 

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 

numerous companies owned by Petters filed for bankruptcy.

During the bankruptcy’s initial phases, the trustees reached a settlement with 

JP Morgan, one of the defendants here, that required it to repay some of what it 

collected during the waning days of the fraud. Accompanying the settlement were 

“bar orders,” which prohibited creditors from asserting related claims in other cases. 

One of them

barred and permanently enjoined . . . Petters Creditors, or anyone 

whose Claim in any way arises from or is related to the [Petters] 

Liquidating Trust, the [Petters] Debtors, the [Petters] Estates, the 

1

The Honorable Donovan W. Frank, United States District Judge for the 

District of Minnesota.
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Polaroid Debtors, the Polaroid Estates, the Petters Capital Debtor, the 

Petters Capital Estate, Thomas J. Petters, and/or Petters’[s] Ponzi 

scheme . . . from asserting or prosecuting any Claim that belongs or 

belonged to one or more of the Trustees.

In re Petters Co., No. 08-45257, slip op. at 6 (Bankr. D. Minn. May 3, 2018); see 

also United States v. Petters, No. 08-5348, slip op. at 4–5 (D. Minn. May 21, 2018)

(issuing a similar order). 

Despite the bar orders, Ritchie remains intent on getting its money back. So 

far, it has little to show for its efforts. See Ritchie Cap. Mgmt., L.L.C. v. JP Morgan 

Chase & Co., 960 F.3d 1037, 1044 n.1 (8th Cir. 2020) (collecting cases). In this 

iteration, the targets are JP Morgan and Richter Consulting. Its principal theory is

that these firms aided and abetted Petters’s fraud. And even if they did not, the

complaint alleges that the transfers to JP Morgan were fraudulent. Once again, 

however, Ritchie will leave empty handed. 

II. 

Ritchie’s most pressing problem is that it lacks standing to assert these claims 

against JP Morgan. Bankruptcy standing is all about ownership: who owns the 

claims that Ritchie is trying to bring? See In re Senior Cottages of Am., LLC, 482 

F.3d 997, 1001 (8th Cir. 2007); see also In re Wilton Armetale, Inc., 968 F.3d 273, 

280–81 (3d Cir. 2020) (distinguishing bankruptcy standing from Article III 

standing). 

 A bankrupt debtor will typically have multiple creditors nipping at its heels

for what little remains. The bankruptcy code deals with this problem by appointing 

a trustee who has the responsibility to “collect and reduce to money the property” of 

the debtor. 11 U.S.C. § 704(1). The trustee oversees the bankruptcy “estate,” which 

more or less includes “all legal or equitable interests of the debtor in property.” 11 

U.S.C. § 541(a)(1). Among them are “causes of action” that the debtor could have 

brought. Senior Cottages, 482 F.3d at 1001. Those causes of action belong to the 
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debtor—and by extension, the trustee—who gets to bring them on behalf of the 

estate. See id.

A.

One of those claims is that JP Morgan aided and abetted Petters’s fraud. If 

the claim is “general to the [bankruptcy] estate,” then only the trustee may bring it, 

not an individual creditor. Wilton Armetale, 968 F.3d at 282 (quotation marks

omitted); St. Paul Fire & Marine Ins. Co. v. PepsiCo, Inc., 884 F.2d 688, 703–04 

(2d Cir. 1989). If it is “personal to a specific creditor,” on the other hand, then it is 

fair game for an individual lawsuit. Wilton Armetale, 968 F.3d at 282 (quotation

marks omitted). The basic rule of thumb is that, if the debtor could have asserted 

the claim the moment before it entered bankruptcy, the trustee gets to bring it now. 

See Senior Cottages, 482 F.3d at 1001; see also 11 U.S.C. § 704(1) (stating that the 

trustee has the duty to “collect . . . the property” of the debtor).

The aiding-and-abetting claim fits that description. As the complaint alleges, 

after companies like JP Morgan and Ritchie loaned money to one of the Petters 

companies, it did not take long for Petters to steal it. There is little doubt that he 

defrauded lenders. But he also stole from his own companies, meaning that the 

companies have the same cause of action against JP Morgan for helping Petters

himself perpetuate the fraud. See Senior Cottages, 482 F.3d at 1004–05. Under 

bankruptcy law, the cause of action now belongs to the trustees. See id.; see also

Wilton Armetale, 968 F.3d at 282–83. 

And they pursued JP Morgan from the beginning. Early on, JP Morgan agreed 

to pay over $30 million to settle a group of claims filed by the trustees. See In re 

Petters Co., No. 08-45257, slip op. at 6 (Bankr. D. Minn. May 3, 2018). To protect 

the settlement, two courts issued bar orders preventing creditors like Ritchie from 

asserting any claims that “belong[] or belonged to one or more of the [bankruptcy] 

[t]rustees.” Id.; see United States v. Petters, No. 08-5348, slip op. at 4–5 (D. Minn. 
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May 21, 2018) (using similar language). Those orders, along with general 

bankruptcy-standing doctrine, prevent Ritchie from pursuing JP Morgan separately.

B. 

The same goes for the fraudulent-transfer claims against JP Morgan. See Finn 

v. All. Bank, 860 N.W.2d 638, 643, 644–45 (Minn. 2015) (describing fraudulenttransfer claims). We have long held that only a trustee can bring them. In re Lauer, 

98 F.3d 378, 388 (8th Cir. 1996). “[I]ndividual creditors” like Ritchie, by contrast, 

lack standing to do so. Id. 

III. 

Ritchie’s aiding-and-abetting claim against Richter Consulting under New 

York law cannot move forward either, but for a different reason. According to the 

complaint, Richter misled Ritchie through the due-diligence documents it prepared. 

Although we assume that this claim is “personal” to Ritchie, Wilton Armetale, 968 

F.3d at 282–83, it still cannot succeed because the complaint never alleges enough

facts to infer that Richter had “actual knowledge” of Petters’s fraud, Lerner v. Fleet

Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006) (applying New York law); see also

Ginsburg Dev. Cos. v. Carbone, 22 N.Y.S.3d 485, 489–90 (N.Y. App. Div. 2015) 

(listing the elements of aiding-and-abetting fraud).

One essential element of an aiding-and-abetting claim like this one is “actual 

knowledge of fraud.” Lerner, 459 F.3d at 292–93; Eurycleia Partners, LP v. Seward 

& Kissel, LLP, 910 N.E.2d 976, 978–79 (N.Y. 2009). Even “alleged ignorance of 

obvious warning signs of fraud will not . . . adequately allege actual knowledge.” 

Chemtex, LLC v. St. Anthony Enters., Inc., 490 F. Supp. 2d 536, 547 (S.D.N.Y. 2007) 

(quotation marks omitted). As one case recently put it, “[p]atterns of behavior highly 
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indicative of fraud support, at most, constructive knowledge.” Berdeaux v. OneCoin 

Ltd., 561 F. Supp. 3d 379, 413 (S.D.N.Y. 2021). 

Viewed in the light most favorable to Ritchie, the allegations in the complaint 

describe no more than constructive knowledge of the fraud. During its examination 

of Polaroid’s books and records, Richter discovered an inflated accounts-receivable

figure, “loans” from Petters’s other companies, and payments on a “sham” note. It 

was also allegedly aware that Polaroid’s consumer-electronics business was not

viable and that auditors had recently resigned rather than complete their work. We 

can infer from these allegations that Richter knew that Polaroid was in serious 

financial trouble and that the company’s demise may not have been far away. It may 

even have misrepresented Polaroid’s financial condition in its due-diligence 

documents. 

What the complaint does not “plausibly show[]” is that Richter had “actual 

knowledge” that Petters himself was engaged in fraud. Ashcroft v. Iqbal, 556 U.S. 

662, 682–83 (2009) (stating that a complaint must contain enough “factual content” 

to “nudge” the claim “from conceivable to plausible” (brackets and quotation marks 

omitted)). The complaint describes the fraud in the following way: “Petters sought 

out Thane Ritchie, criminally defrauded him and his companies, then laundered the 

proceeds of the Ritchie loans through a circuitous international chain of bank 

accounts.” Nothing suggests, however, that Richter was aware of this sequence of 

events, much less that it knew that Petters was operating a fraudulent scheme.

2

 It 

was, after all, given the limited task of examining Polaroid’s finances, a legitimate 

company, so it is no surprise that Ritchie’s complaint could not connect the dots. 

Yet without them, it has not stated an aiding-and-abetting claim. See SPV Osus Ltd. 

v. UBS AG, 882 F.3d 333, 345 (2d Cir. 2018). 

2

Although the complaint alleges that Richter “gained actual knowledge of the 

fraudulent nature of Petters’s enterprises,” this allegation is too “conclusory” for us 

to assume it is true. Iqbal, 556 U.S. at 681.
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IV.

We accordingly affirm the judgment of the district court.

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