TORONTO (HedgeWorld.com)--Another week, another report from court-appointed receiver KPMG LLC in the case of the now-defunct hedge fund firm Portus Group.
This time, KPMG told the Ontario court handling the case that various entities involved with Portus, either as investors or as recipients of investments from Portus Alternative Asset Management Inc., have not had sufficient time to sort through the maze of complex structures Portus had set up to collect and invest assets.
KPMG has been trying to account for and secure some C$811.5 million (US$695 million) in assets from among the various Portus funds, which were shut down by Canadian securities regulators earlier this year after they became suspicious of Portus's marketing tactics and whether advisers were paid to refer clients to Portus funds.
After regulators acted, Portus co-founder Boaz Manor fled to Israel, where he has remained ever since. He has refused to meet with KPMG officials or with officials from the Royal Canadian Mounted Police, which are also investigating Portus. Mr. Manor's attorneys have claimed he is seriously ill.
Meanwhile KPMG has managed to track down a good portion of the assets, although a few hundred million dollars remains unaccounted for. In a recent report to the Canadian court, KPMG recommended that Portus be placed in bankruptcy proceedings, as that appeared to be the best way to get money back to investors.
Some of the so-called stakeholders have hesitated to back that plan. "?? 1/2 [D]ue to the complexity of the Portus Group investment structures and the need for each of the stakeholders to review and discuss the structure of the Portus Group internally, they are not in a position to provide the receiver with a response to the initial recommendations ?? 1/2 by the end of this week," Portus officials wrote in their report, the 10th they have presented in the matter. "Such stakeholders have requested that the receiver defer filing its recommendations until such time as they can develop their responses to the initial recommendations of the receiver and discuss their respective responses with the receiver."
KPMG told the court it would wait to file its final recommendations until after it had consulted with the various stakeholders, none of whom was named. KPMG planned to file another report Oct. 3 on the status of those talks.
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