13-183MR ASIC intervenes in LM fund proceedings to end uncertainty
Thursday 18 July 2013
ASIC has finished making its submissions in a court hearing to decide the future of the multi-million LM First Mortgage Income Fund (FMIF).
The proceedings were started by two investors of the FMIF seeking orders for the appointment of Trilogy Funds Management Limited as responsible entity of the FMIF. The current responsible entity, LM Investment Management Limited, opposed this application.
Appearing in the Queensland Supreme Court this week, ASIC sought orders that the FMIF be wound-up and that registered liquidators from PricewaterhouseCoopers be appointed as the receivers to wind up the FMIF.
‘ASIC took this action as it believes that the appointment of receivers to the FMIF will allow the winding-up to proceed in the most efficient and cost effective way to provide the best chance of achieving the maximum return for investors,’ ASIC Commissioner Greg Tanzer said.
‘As such, ASIC believes that the persons responsible for winding-up the FMIF should be appropriately independent.
‘It is ASIC’s view that the protracted litigation surrounding the FMIF is not in the best interests of investors and wishes to see the matter resolved as soon as possible.’
Before this week’s proceedings Deutsche Bank, a secured creditor of the FMIF, appointed McGrathNicol as receiver of the FMIF. If appointed, ASIC proposes that the incoming receivers work in conjunction with Deutsche Bank's receiver for an orderly realisation of the assets of FMIF.
Justice Dalton reserved her decision in the matter.
LM Investment Management (LMIM) collapsed in March this year. It is the responsible entity of seven registered managed investment schemes including FMIF. It also operates the LM Managed Performance Fund (LMMPF).
ASIC’s inquiries into the LM group are continuing.
On 9 April 2013 ASIC suspended LM’s Australian financial services licence for two years (refer: 13-075MR).
ASIC has set up a web page for investors and unitholders caught up in the LM collapse.