Ritchie Capital Management LLC and 6 others (Respondents) v Lancelot Investors Fund, Ltd (In Official Liquidation) (Appellant) (Cayman Islands)

Case summary

Case ID

JCPC/2025/0098

Jurisdiction

Cayman Islands

Parties

Appellant(s)

Lancelot Investors Fund, Ltd. (in Official Liquidation)

Respondent(s)

(1) Ritchie Capital Management LLC, (2) Ritchie Capital Management Sezc, Ltd, (3) Ritchie RML Trading, Ltd, (4) Ritchie Special Credit Investments, Ltd, (5) Rhone Holdings I, Ltd, (6) Ritchie Structured Multi-Manager, Ltd, (7) Yorkville Investments I, LLC

Issue

When a company enters liquidation, does time stop running for the purposes of the Cayman Islands Limitation Act (1996 Revision) in respect of all liabilities, including actions based in tort, or just for submitting ‘proofs’ of debt?

Facts

The Appellant is a Cayman company that operated as a ‘feeder fund’ to allow investors to (indirectly) invest in companies operated by Mr Thomas Petters. Mr Petters was arrested for fraud and his businesses collapsed. The Respondents are a group of funds and investment managers who claim to have lost in excess of USD$200 million from this collapse and fraud. The Respondents indirectly invested through the Appellant and other related entities. In 2008 the Appellant and related companies filed for bankruptcy in Illinois and the Appellant was placed into official liquidation in the Cayman Islands. Following the withdrawal of its earlier proofs of debt in 2013, the Respondents applied in 2017 for leave pursuant to section 97(1) of the Cayman Islands Companies Act to bring proceedings against the Appellant (and a third party) for deceit and unlawful means conspiracy. This application was compromised by a Deed of Settlement between the Appellant, its official liquidator and the Respondents. The Deed of Settlement consented to the Respondents bringing such proceedings but it also restricted the Respondents from filing any proofs of debt or assert claims in the winding up process of the Appellant. The proceedings were formally commenced against the Appellant and another party on 21 May 2019. This other party was a foreign company that contested jurisdiction of the Cayman Islands courts, arguing that the claims against the Appellant and it were, amongst other things, statute barred by the Limitation Act (1996 Revision). The Respondents argued that the principle of Re General Rolling Stock [1872] LR 7 Ch App 646 applied such that, as the tort claims were not statute barred on the date of the winding up of the Appellant, time stopped running for limitation purposes such that those actions were not out of time. This argument was rejected by the Grand Court of the Cayman Islands who eventually ordered that the Respondents’ claims against the Appellant be struck out. The Cayman Islands Court of Appeal allowed the appeal holding that the Respondents’ claims were not time barred due to the Re General Rolling Stock principle. The Appellant now seeks leave to appeal to the Judicial Committee of the Privy Council.

Date of issue

2 October 2025

Case origin

PTA

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