Portus plan awaits approval

Date: Friday, December 15, 2006
Author: Carrie Tait, Financial Post

Investors in Portus Alternative Asset Management Inc. should have a better idea today how they will be taxed after receiving distributions from the trustee of the now-defunct hedge fund. KPMG Inc., the Portus bankruptcy trustee, today will ask the Ontario Superior Court of Justice in Bankruptcy and Insolvency to approve an order that would allow people who invested in registered plans sold by Portus to move any distributions KPMG returned to them into different registered plan without triggering a taxable event. The request is detailed in a motion dated Dec. 7, 2006. About 13,000 of Portus's 26,000 investors, who put roughly $244-million in Portus through registered plans, would benefit if this order is approved. Distributions paid to these investors but not moved into a different registered plan will be considered additional income in the year it is received and taxed accordingly. In total, investors put about $800-million into the hedge fund, which blew up in early 2005. KPMG this summer said investors may get back about 85% of their money.