Trustee seeks $110M in Petters-related profits from hedge fundby Martin Moylan, Minnesota Public Radio
St. Paul, Minn. — The trustee overseeing the bankruptcy of convicted business tycoon Tom Petters is seeking more than $100 million from an area hedge fund and related companies. Trustee Doug Kelley is suing Minnetonka-based Arrowhead Capital and associated firms, saying they should return $105 million in profits made by investing in Petters' financial fraud.
It appears to be the second largest claim filed so far by Kelley. Last week, he sued the locally prominent Sabes family, alleging they, their businesses and foundation made $110 million in illegal profits from hundreds of deals done with Petters.
Kelley said the law prohibits investors from keeping such profits.
Kelley also said he could be due $5.1 billion if he can prove the companies knew Petters was running a fraud. The larger amount includes the money Arrowhead and other defendants invested in the fraud and got back.
Petters received a 50-year jail term for running what federal prosecutors said was a $3.5 billion fraud.
Arrowhead Capital did not respond to requests for comment.