Several Portus investors will get total of $12.5 million if court approves request

Date: Thursday, December 20, 2007
Author: The Canadian Press

TORONTO - Several hundred Portus Alternative Asset Management Inc. investors will get $12.5 million of their money back Thursday if an Ontario court approves a request relating to the defunct hedge-fund operation.

Receiver KPMG Inc. will ask the court to wind-up the Market Neutral Preservation Fund and the MNB Trust, a small segment of Portus that covered a portion of the investors who lost their investment when the fund collapsed in 2005.

Once the windup is approved by the Ontario Superior Court of Justice, KPMG will distribute the $12.5 million to the about 300 Portus customers who own units in the MNPF and have correctly completed a claims process.

The distribution is expected to be completed before the end of the year, and will amount to a return of about 80 per cent of the money lost.

Portus co-founders Boaz Manor and Michael Mendelson were charged in late September with fraud, money laundering and possession of property obtained by crime following a two-year investigation into the collapse of the notorious hedge fund. Manor has also been charged with obstruction of justice.

Mendelson pleaded guilty to one count of fraud last month and received a two-year sentence. He also agreed to co-operate with the investigation against Manor.

Manor is expected back in court Jan. 21 to set dates for preliminary hearings. He first appeared in court Nov. 13 after returning to Canada from Israel, and was released on $250,000 bail secured by his parents.

RCMP allege Portus fraudulently used about $750 million from about 26,000 domestic investors "to operate the business in contrast to its disclosure and without investors' knowledge" between January 2003 and March 2005.

KPMG is still working to retrieve funds lost by other investors.