Ritchie Multi-Strategy investors oppose request to dismiss involuntary Chapter 11 case

By Rebecca Melvin

New York, Feb. 5 - Investors of Ritchie Multi-Strategy Global LLC oppose the hedge fund's motion for summary judgment seeking dismissal of an involuntary Chapter 11 petition that the investors filed as creditors, according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.

The investors, who say they are owed $46 million, are Benchmark Plus Partners LLC, Benchmark Plus Institutional Partners LLC and Sterling Low Volatility Fund QP.

The investors say that the fund's request to dismiss the petition is based on the fund's allegation that as investors, they are not creditors.

"This factual allegation is simply and demonstrably false," the investors' filing states.

The filing cites case law that analyzes the status of hedge fund investors and former investors in the bankruptcy context. The case law establishes that the petitioning creditors' right to payment under the operating agreement is a contractual right that entitles its holder to the rights and standing of a creditor in the context of the bankruptcy code, the filing states.

Last April Ritchie Offshore and affiliates sold virtually all assets to Rhone Holdings LP.

A hearing is scheduled Feb. 26.

Ritchie Multi-Strategy is a Lisle, Ill.-based hedge fund. Its Chapter 11 case number is 07-24236.

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