The recipient in the Portus case issued its second report on the Market Neutral Preservation Fund and the related MNB Trust, recommending that both the fund and the trust be wound up. As recipient, KPMG also sought court permission to seek creditors for these entities.
According to KPMG, Portus managers cashed in $14.9 million worth of Ontario government bonds held by MNB Trust, which had gone into receivership. The proceeds of that sale are now held by KPMG, along with other MNB assets, call options with French bank Société Générale.
According to the report, the sole investor in MNB Trust was Royal Bank of Canada, and KPMG said it did not anticipate additional claims. However, to ensure there were no additional creditors, KPMG suggested placing a notice in the Globe and Mail and National Post. Claims would have to be filed by September 22, 2006.
In the case of MNPF, the administrator does not expect any creditors other than ComputerShare Trust Company and Citigroup Corporate and Investment Banking, formerly Unisen. KPMG recommends sending a further notice to warn other potential creditors, also with a deadline of September 22. MNPF had raised approximately $19.2 million from accredited investors across Canada before Portus was closed by the OSC.
A further notice with the same deadline will be issued to warn unidentified investors seeking redress. Known investors will be contacted by the recipient, who will provide a statement specifying the number of units they are known to have held.
Most of the assets that flowed into Portus products were commingled in pooled accounts, making it difficult to determine their ownership. However, the assets in the MNPF remained segregated, leading to investors’ requests that the assets be paid out rather than simply thrown into a common pool to be shared by all Portus investors.
Last month, investors in Portus Alternative Asset Management were told by KPMG that as much as 86% of their investment could be recovered. A special committee has been set up to decide how and when the funds will be distributed.
Submitted by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com
(07/12/06)
