In one of the most recent developments in the PFGBest case, as customers await an initial distribution decision from the court, Russ Wasendorf Jr., the former PFGBest Chief Operating Officer and son of Russ Wasendorf, Sr., has filed a suit against U.S. Bank, alleging violations of commodity law that facilitated the fraud and theft of client money. The complaint is certainly worth a read, and can be found here.

But what does it mean? There are two things to consider. For starters, the suit is not seeking substantial monetary damages relative to the client losses, and technically, it’s not seeking it for clients. The plaintiff (read: Junior) is explicitly seeking that all guarantees between PFGBest and U.S. Bank be rescinded – in other words, that they not be on the hook for loans extended to PFGBest by U.S. Bank. The Washington Post explains further:

The lawsuit, filed in Waterloo last week, is an attempt by Wasendorf Jr. and his wife to rescind millions in business loans they guaranteed with personal assets to build Peregrine’s now-empty headquarters. The lawsuit claims the agreements should be void since the bank falsely assured the couple that Peregrine’s accounts were “in good order.”

In other words, this looks to be more of a play by Wasendorf Jr. to protect his assets (and his wife’s) rather than a heroic stand against US Bank in the name of the customers. But that begs the question of whether Wasendorf Jr. is even entitled to those assets… surely there were gifts, distributions of profit, bonuses, and salary paid to him out of what we now know to be customer money, not firm money – and those assets will be the subject of a class action suit somewhere down the line here (a few have already been filed, but a lead suit has not been chosen yet). The silver lining here – as far as former PFG customers is concerned – is the hope that these suits uncover something which will show some liability by a deep-pocket entity like US Bank.  The article goes on:

Nicholas Iavarone, Wasendorf Jr.’s lawyer, said he hopes the lawsuit will uncover facts that will help Peregrine’s bankruptcy trustee and court-appointed receiver recover funds to compensate the 24,000 customers who lost money in the fraud.

While it may leave a bad taste in your mouth to root for Wasendorf Jr. in this case, one of the best case scenarios in this mess is for US Bank to be found to have done some wrongdoing and be forced to make customers whole as a result. Here’s hoping.