First Portus creditors meeting expected soon

Date: Thursday, March 16, 2006
Author: ANDY HOFFMAN - Globe & Mail

The first meeting of creditors of failed hedge fund firm Portus Alternative Asset Management Inc. is expected within the next three months.

Court-appointed receiver KPMG Inc. in a motion filed yesterday asked to be named the trustee in bankruptcy of Portus and several related entities. The appointment is expected to be approved at a court hearing scheduled for March 24.

KPMG has asked that the usual 21-day period in which to hold a creditors meeting be extended to 90 days because of the large number of creditors.

About 26,000 investors pumped $750-million into Portus before the company was shut down by regulators last year amid regulatory and police investigations. KPMG said a creditors list will not be published and distributed.

The first creditors meeting will take place at a Toronto location with live video links to Halifax, Winnipeg, Calgary, Edmonton and Vancouver. KPMG said creditors will be notified by regular mail within 30 days of its appointment as trustee.

Citing the incomplete documentation that has been discovered in the case, KPMG has also requested that it be able to rely on the best available records to identify creditors and the size of their claims. When investigators first searched the Portus offices last year, they said thousands of documents and computer files had been destroyed.

Manulife Securities International Ltd. has already guaranteed the $246-million in funds invested in Portus by about 6,300 of its clients. Parent firm Manulife Financial Corp. will be among the largest Portus creditors.

Manulife chief executive officer Dominic D'Alessandro has vowed to get back the funds and pursue those involved in the Portus case "no matter where they are. . . . to the full extent of the law."

This week, the Israeli Supreme Court granted Portus co-founder Boaz Manor another month to produce nearly $9-million in diamonds allegedly purchased with Portus investor funds. Mr. Manor moved to Israel last year ahead of an interview with KPMG. Through his lawyer, Mr. Manor has claimed to be too ill to co-operate with investigators. He has denied any wrongdoing.