* 8th Circuit revives lawsuit against two ex-Petters execs
* Money that was to be secured by Polaroid assets was lost
* Petters appealing conviction, 50-year prison sentence
By Jonathan Stempel
NEW YORK, Sept 6 (Reuters) - Two former executives who worked for convicted Ponzi scheme operator Thomas Petters can be sued by an investment firm victimized in his $3.65 billion fraud, a federal appeals court ruled.
The 8th U.S. Circuit Court of Appeals in St. Paul, Minnesota on Tuesday revived a civil racketeering and fraud lawsuit against Mary Jeffries, who was president of Petters Group Worldwide Inc, and Camille Chee-Awai, who was chief executive of its Petters Capital LLC unit.
Ritchie Capital Management LLC, a private equity and asset management firm, had accused the defendants of conspiring with Petters to fraudulently extract more than $100 million of loans.
It said the defendants had represented that the money would be secured by assets of camera company Polaroid Corp, which Petters owned and where Jeffries was also chief executive.
A federal judge in Minneapolis had dismissed Ritchie's case in 2010, citing a bankruptcy court ban on new lawsuits that interfered with the assets or documents of Petters' companies, which had been put in receivership.
But Judge Kermit Bye wrote for the 8th Circuit that the ban was not meant to cover the lawsuit by Ritchie against other defendants it believed were actively involved in the fraud.
It would "drastically expand the scope of the anti-suit injunction" to cover lawsuits that required the interpretation of documents possessed by companies in receivership, Bye wrote. "We think such interpretation goes too far."
Petters, 54, was sentenced to 50 years in prison in April 2010 after a St. Paul federal jury convicted him the prior December on all 20 criminal counts he faced, in one of the biggest Ponzi schemes on record. His appeal of his conviction and sentence is pending before the 8th Circuit.
Prosecutors said Petters bilked investors who thought he was using their money to buy consumer electronics for resale to retailers such as BJ's Wholesale Club Inc BJ.N and Costco Wholesale Corp (COST.O).
Andrew Birrell, a lawyer for Jeffries, and Terrence Canade, a lawyer for Chee-Awai, did not immediately respond to requests for comment on Tuesday.
Ritchie has offices in Wheaton, Illinois, New York and Menlo Park, California, according to its website.
The 8th Circuit returned the case to the Minneapolis district judge for further proceedings.
The case is Ritchie Capital Management LLC v. Jeffries et al, 8th U.S. Circuit Court of Appeals, No. 10-02568. (Reporting by Jonathan Stempel, editing by Dave Zimmerman)