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Norshield to Return Little to Investors

Date: Wednesday, February 22, 2006
Author: HFN Daily Report

The receiver for defunct Canadian hedge fund Norshield said Tuesday investors will get back at most 10 cents on the dollar.

Speaking to more than 200 investors in Toronto, RSM Richter partner Raymond Massi said investors will get back eight to 10 cents on the dollar, assuming all goes well. If the receiver encounters additional problems, investors could get as little as three cents on the dollar.

Montreal-based Norshield once claimed to have more than CAN$500 million ($436 million) in assets under management. Last year, firm founder John Xanthoudakis ran into legal trouble with children's animation studio Cinar, creators of Arthur the Aardvark and Buster the Bunny. After a slew of investors asked for their money back, Norshield suspended redemptions.

Xanthoudakis attempted to sell the hedge fund business to Calgary businessman Ted Cantlon, but that fell through after the Ontario Securities Commission suspended the fund's registration and appointed RSM Richter to monitor it. About a month later, a court appointed RSM Richter as receiver for the company.

RSM Richter has said most of the money placed in Norshield flowed offshore and was never invested in hedge funds. The receiver has also complained Norshield kept incomplete records and many documents are missing entirely.

Norshield is also the subject of an ongoing criminal investigation.