Nov. 20 (Bloomberg) -- Ritchie Capital Management and Thane Ritchie, the hedge fund manager's principal, were sued by Barclays Bank Plc over accusations they concealed more than $150 million in investments made in the collapsed Petters Group Worldwide LLC and affiliates.

Now bankrupt, Petters Group, based in Minnetonka, Minnesota, was raided in September by FBI agents acting on information that the company may have cheated at least 20 investors. Principal Tom Petters, accused of leading a $2 billion fraud, is being held without bail in a Minnesota jail.

``Thane Ritchie made the decision to invest significant sums'' from two of his firm's hedge funds with Petters, at a time when those funds ``were supposed to be winding down,'' Barclays said in a complaint filed Nov. 18 in Illinois state court in Chicago.

The bank is a unit of London-based Barclays Plc. Shares in that commercial banking and investment house, which have declined almost 74 percent this year, fell 19.9 British pence, or 13 percent, to 129.6 pence in London yesterday, after reaching a 52-week low of 129 pence.

Ritchie Capital Management, based in Lisle, Illinois, and 19 related entities and funds are named as defendants in the Barclays suit, as are Thane Ritchie and four other firm executives. The bank claims it's owed at least $380 million.

`Inaccurate and Misleading'

``Barclays' lawsuit lacks merit as a matter of law and is premised upon inaccurate and misleading factual contentions'' the firm's outside spokesman, Justin Meise of River Communications, said yesterday in an e-mail. ``We will vigorously defend this baseless action.''

Ritchie-related entities could be owed almost $225 million, according to a list of unsecured creditors filed in the Petters case in U.S. Bankruptcy Court in Minneapolis. While, one of those entities, Ritchie Capital Structure Arbitrage Trading Ltd., is said to be owned as much as $12.5 million, that debt is listed as contingent and disputed.

While that company is a defendant in the Barclays suit, the two hedge funds complained of, Ritchie Structured Investments Ltd. and Ritchie Targeted Investments Ltd., aren't named in the Petters debt schedule.

Ritchie Capital in April defeated a bid by three creditors to put another of its funds into involuntary bankruptcy in Chicago. The Ritchie Multi-Strategy Global LLC has sold the bulk of its assets to Rhone Holdings II, an affiliate of New York- based Reservoir Capital Group, and is paying off investors.

Petters lists Rhone Holdings II as one of those Ritchie- related creditors and says it could be owed up to $56.1 million.

The case is Barclays Bank Plc v. Ritchie Structured Investments Ltd., 2008L012890, Cook County Circuit Court, Law Division (Chicago).

To contact the reporter on this story: Andrew Harris at the federal court in Chicago at aharris16@bloomberg.net.

Last Updated: November 20, 2008 00:01 EST