Court confirms Ritchie hedge funds' Chapter 11 liquidation plans

By Rebecca Melvin

New York, Sept. 11 - Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading (Ireland) II, Ltd.'s second amended Chapter 11 plans of liquidation were approved Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

The plans were modified to become effective 10 days after confirmation.

Also John Perham, who serves as the Irish director and chief executive officer of Ritchie Risk, will continue as the Irish director of Ritchie I, while the other directors will resign.

Also after the effective date, Ronald Friedman, attorney with Silverman Acampora LLP, will be the plan administrator, charged with implementing and administering the modified plan.

All classes of creditors in each of Ritchie I and II approved the plans, with the exception of ABN Amro Bank NV, which initially tendered a conditional approval.

ABN agreed to withdraw its condition during the hearing after it was ascertained that there are no potential tax liabilities outstanding that could cause the plans to fail.

ABN has a lien on three insurance policies that matured prior to the bankruptcy filings, and it is still owed $4 million.

Specifically, Ritchie I's plan was approved by both of the holders of $235.93 million of general unsecured claims, and Ritchie II's plan was approved by both holders of $97.89 million of that company's general unsecured claims.

As previously reported, each of the Ritchie hedge funds will liquidate its remaining assets and distribute proceeds to creditors under their plans of liquidation.

Creditor treatment

Treatment of creditors under the plans will include:

• Holders of $1.225 million of Ritchie I administrative claims and $1 million of Ritchie II administrative claims will recover 100% in cash;

• The holder of the about $68 million Ritchie I bank claim will receive residual cash, as well as net litigation proceeds;

• Holders of $236 million of Ritchie I general unsecured claims will receive their share of net litigation proceeds after administrative claims and the bank claim have been paid in full;

• Holders of Ritchie II general unsecured claims will receive their share of Ritchie II residual cash, as well as a share of Ritchie II net litigation proceeds; and

• Holders of Ritchie I and Ritchie II equity interests will receive no distribution.

Ritchie Capital Management's two Ireland-based hedge funds filed for bankruptcy on June 20, 2007. Their Chapter 11 case number is 07-11906.

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