A major player in the secondary life market has won a legal battle against a hedge fund company.
U.S. District Judge Denise Cote issued a ruling Tuesday that dismisses a suit filed by Ritchie Capital Management L.L.C., Geneva, Ill., against Coventry First L.L.C., Fort Washington, Pa.
Ritchie accused Coventry of fraud, breach of fiduciary duty and breach of contract in connection with allegations that Coventry misrepresented its life settlement operations in 2005, when Ritchie decided to work with Coventry to invest in life insurance products.
Ritchie has been seeking $700 million in damages, and it has made its allegations under the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs that succeed with RICO claims can collect treble damages from the defendants.
Although Cote dismissed all of Ritchie’s claims, she said the company can attempt to re-plead two of the RICO-related charges and an allegation of breach of contract.
Coventry is “pleased that the court recognized Ritchie’s desperate attempt to divert attention from its poor performance,” Coventry Chief Executive Alan Buerger says.
The ruling is an “obvious victory for the truth,” Buerger says.
Ritchie is emphasizing that Cote gave the company permission to file an amended complaint.
“Ritchie is refiling immediately to address the points made by the judge,” a Ritchie spokesman says.
All of the main points that Ritchie wanted to make will be in the amended complaint, the spokesman says.