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Receiver Asks Court to Waive Solicitor Privilege in Portus Case

Date: Thursday, April 6, 2006
Author: HFN Daily Report

The receiver for defunct hedge fund firm Portus is asking an Ontario Superior Court to waive solicitor-client privilege and disclose certain documents that could help it recover investor funds.

According to court-appointed receiver KPMG, Portus retained the law firm of Groia & Co. in 2004. Groia in turn retained Doug Fox of Risk Management Services and Alan Stewart of Kroll Lindquist Avey as consultants.

Portus cofounder Boaz Manor, who fled to Israel after the Ontario Securities Commission began investigating his firm, claims he is a client of Groia and any documents the firm has in connection with Portus are privileged. While Groia disputes Manor's assertion that he is a client, the firm asked KPMG to obtain a court order authorizing the disclosure of reports by Fox and Stewart.

In addition to the reports, KPMG is asking the court to authorize the disclosure of a number of documents, including e-mails between Portus cofounder Michael Mendelson and Paradigm Global Advisors (PGA), written letters concerning PGA, Groia interoffice memos about Portus, notes and e-mails between Kroll and former Portus vice president Ali Hamid and numerous letters marked "Privileged and Confidential."

Lawyers for KPMG will formally make the motion on April 10.