A bank's allegations of fraud and other wrongdoing by an investment firm owned by Gateway Inc. co-founder Ted Waitt have been thrown out -- at least for now -- by a Minnesota judge who said the claims aren't specific enough.

The ruling Thursday by Chief U.S. District Judge Michael Davis of Minneapolis is at least a partial victory for Waitt's firm, Avalon Capital Group Inc., and four executives of a failed Minnesota construction lender once controlled by Avalon. The lender, Lakeland Construction Finance, collapsed in 2009.

Davis said the Bank of Montreal's $100 million lawsuit filed in March didn't state in detail who was responsible for specific wrongs and instead alleged only broad misconduct. Civil court rules require fraud allegations to be stated "with particularity."

The Canadian bank, which loaned money to Lakeland, charged that the Eagan-based lender engaged in reckless underwriting standards for years and shifted nearly $67.5 million to Avalon before Lakeland's default on $400 million in loans.

The judge left intact some of the bank's allegations against Avalon, including claims it engaged in a sham transaction and unjustly enriched itself at the bank's expense. That means the case can go to trial on those claims. The ruling leaves open the possibility that the bank could resurrect some other claims, including the fraud allegation.

Attorneys for Avalon and the Bank of Montreal had no comment Thursday.

Waitt, of San Diego, made his fortune selling personal computers, and as recently as 2008 was on the Forbes list of the 400 richest Americans, with assets of $1.4 billion. He is not a defendant in the suit.

His investment firm took a stake in Lakeland in 1999, helping it to become one of Minnesota's largest residential construction lenders. Lakeland underwrote housing projects across the state, and its default left subdivisions with partially finished structures and unpaved roads. Lakeland is now controlled by a court-appointed receiver.

One of Bank of Montreal's allegations is that Waitt personally vouched for a Lakeland executive who had a criminal record for mail fraud. The bank also alleged that Lakeland's lending practices were so reckless that developers could wrap up deals in days with lenders who didn't visit sites or conduct appraisals.

Avalon denied that it anticipated the collapse of the housing industry and that it had conspired to move bad loans into an entity financed by the Bank of Montreal. It said Waitt's vouching for someone is not fraud. Lakeland executives named in the suit also disputed the bank's claims.

David Shaffer • 673-7090