Bankruptcy call

investor’s expense. A tentative timeline suggests the bankruptcy would be filed in the next 21⁄ months, and the first meeting of investors/ creditors would occur in the next 41⁄ months. The creditors would elect inspectors who would decide how to distribute the funds. Portus assets are tied up in bank notes from French bank Société Générale, the majority of which are due in 2009.

“ They would have to create liquidity,” the source said. “It could take years to get money back.”

Investors, according to KPMG, put $ 717 million in Portus and management spent $95 million, or 13.3 per cent, on a reserve that was allegedly used for commissions, management fees and early redemptions. The Ontario Securities Commission closed Portus in February, and the fund that was once one of Canada’s fastest growing hedge funds went into receivership in March. It had more than 26,000 investors. The RCMP launched a criminal investigation in July. The receiver has not been able to reach Manor since Aug. 12. Manor’s lawyer, who is in Israel, has previously said Manor is too sick to be interviewed.

Earlier this summer, lawyers for KPMG said they had caught Manor “with his hand in the cookie jar. The question is whether it’s up to his wrist, elbow or his shoulder.” Manor has denied any impropriety. As of Sept. 1, a committee approved 179 applications and issued $813,802 in cheques to Portus investors who are facing financial hardship.

Portus has an estimated $ 1 billion in liabilities. Its largest creditor, Manulife Financial Corp., has about $246 million in claims. Manulife reimbursed its clients after Manulife representatives recommended the Portus funds.