Adrian J Cotterill, Editor-in-Chief
There are so many interesting stories coming from the Petters Group Worldwide fallout – one of the latest is the number of hedge funds interested in suing.
Interlachen Harriet Investments, a Cayman Islands-based unit of Minneapolis-based Interlachen Capital Group, filed the first suit last Wednesday alleging it was defrauded out of USD 60 million in a deal involving “imaginary televisions.”
It says it gave USD 60 million to Petters Co. Inc. (PCI) to purchase electronic merchandise such as televisions.
PCI, a unit of Petters Group Worldwide, was to resell the televisions at a profit – Interlachen alleges that PCI never purchased any merchandise AND instead used the investment to fund former CEO Tom Petters’ other business ventures!!
The suit is similar to federal allegations made last week that Petters and several associates bought and sold nonexistent goods with investors’ money for more than a DECADE by creating the image of a successful retail business.
It seems that other hedge funds may have exposure to the situation as well. Bloomberg News reported this week that hedge-fund managers Gottex Fund Management Holdings, of Lausanne, Switzerland, and Greenwich, Conn.-based Acorn Capital Group had either loans or investments with companies connected with Petters.
If this really does go back 10 years then a lot of investments that Petters Group have made will be embroiled in this.