Portus receiver to seek MNPF investors

The receiver in the Portus affair has 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 receiver, KPMG has also asked the court for permission to seek out creditors for these entities.

According to KPMG, Portus managers cashed a $14.9 million government of Ontario bond held by MNB Trust, prior to the receivership. The proceeds of this sale are currently held by KPMG, along with MNB’s other assets, call options with French bank, Société Générale.

According to the report, the sole investor in MNB Trust was the Royal Bank of Canada, and KPMG says it does not anticipate additional claimants. But to ensure there are no additional creditors, KPMG has suggested placing a notice in the Globe and Mail and the National Post. Claims would have to be submitted by September 22, 2006.

In the matter of MNPF, the receiver does not expect any other creditors than ComputerShare Trust Company and Citigroup Corporate and Investment Banking, formerly Unisen. KPMG recommends running another notice to alert other potential claimants, again with a deadline of September 22. The MNPF raised about $19.2 million from accredited investors across Canada before Portus was shut down by the OSC.

Another notice with the same deadline will be posted to alert yet-to-be-identified investors seeking redress. Known investors will be contacted by the receiver, delivering a statement setting out the number of units they are known to have held.

Most of the assets that flowed into Portus products were commingled into pooled accounts, making it difficult to trace ownership. However, assets in the MNPF remained segregated, leading to the motion by investors that the assets be paid out, rather than simply dumped into a communal pool to be split by all Portus investors.

Last month, investors in Portus Alternative Asset Management heard from KPMG that as much of 86% of their investments could be recovered. A special committee has been set up to decide on just how, and when, those funds will be distributed.

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