Receiver appointed to LM First Mortgage Income Fund
The Queensland Supreme Court has appointed David Whyte of BDO as a receiver to wind up the LM First Mortgage Income Fund.
Recently, the Australian Securities and Investments Commission (ASIC) sought court orders that registered liquidators be appointed as receivers, taking control of the wind up out of the hands of the liquidators.
Up until the liquidators' appointment, FTI Consulting's John Park and Ginette Muller had been acting as voluntary administrators of LM Investment Management — the fund's responsible entity (RE)— since March 2013.
According to ASIC, Park and Muller had been resisting any attempt to remove them from control of the First Mortgage fund.
The regulator was concerned that Park and Muller were putting the interest of unitholders before their own when they called a unitholder meeting in April to change the RE. ASIC also claimed the meeting had not been validly called.
Before the appointment of David Whyte, Trilogy Funds Management had applied to be appointed by the court as a temporary RE of the fund.
The court ruled Trilogy's application to be incompetent and it did not regard its appointment as being in the interests of members of the fund.
Dutsche Bank, a secured creditor of the fund, had previously appointed McGrathNicol as receiver and ASIC anticipates that orders will be made for the incoming receiver to work in conjunction with Deutsche's receiver for an orderly realisation of the assets of the fund.
"The appointment will see the winding up proceed in the most efficient and cost effective way," ASIC Commissioner Greg Tanzer said.
"We want to see the maximum returned for investors."
ASIC's enquires into the collapsed LM Investment Management are continuing.
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