ASIC seeks orders to wind up $326 million LM mortgage fund and realise assets

ASIC has sought orders in the Queensland Supreme Court that liquidators from PricewaterhouseCoopers be appointed to wind up the $326 million LM First Mortgage Income Fund (FMIF).

The fund was one of seven registered investment schemes managed by collapsed Gold Coast fund manager and property developer LM Investment Management.

ASIC made its submission in a court hearing to decide the future of the fund.

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 fund.

The current responsible entity, LM Investment Management Limited, opposed this application.

‘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,’ says ASIC commissioner Greg Tanzer.

‘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 $350 million LM Managed Performance Fund (LMMPF).

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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