KPMG seeks trusteeship in Portus bankruptcy

The receiver in the ongoing Portus inquiry will ask an Ontario court to extend its role in the matter of the disgraced investment firm. In its 21st Receiver’s Report, filed on Wednesday, KPMG announced it will ask to be named trustee in the Portus Group’s upcoming bankruptcy hearing.

The receiver will be in Ontario Superior Court on Friday, March 17, to present its latest report and is asking that the return date for the bankruptcy application be set for March 24. If named trustee in the bankruptcy, KPMG will seek to delay the mailing of bankruptcy notices and extend the timeframe for meeting with creditors.

“Due to the number of investors and other creditors of PAAM, it is anticipated that the trustee may require up to 30 days following its appointment to mail the notice documents,” the firm said in its report.

According to the Bankruptcy and Insolvency Act, the trustee must meet with creditors within 21 days of its appointment, but KPMG says that is far too soon, so it will seek to extend deadline to 90 days. The Act also dictates that the meeting be held at the office of the receiver, but given the large numbers of investors and creditors KPMG is suggesting an alternate venue be named, with investors across the country accessing the meeting by teleconference.

“The receiver recommends that claims be calculated on the basis that the amount of an investor’s claim shall be the amount invested by the investor, less any redemption proceeds received by the investor,” the report suggests. “Any amounts received by the investor from the Hardship Committee shall be deducted from the distribution to which such investor would otherwise be entitled.”

Any amount received by investors from their investment dealers, representing a return of commissions, would not be included in the calculation of the claim.

KPMG was authorized to file for Portus’ bankruptcy by an order issued April 8, 2005. The application was filed April 12, 2005.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com