The Globe and Mail – Investors who put money into hedge funds managed by Norshield Financial Group will likely get back a maximum of 10 cents for every dollar they invested in the insolvent company. The actual recovery could be as low as 3 cents and investors might have to wait three years before any money arrives.
Montreal-based Norshield, considered Canada’s first hedge fund, was founded in the early 1980s by John Xanthoudakis and it once boasted more than $1-billion in total assets. But it ran into trouble last spring and filed for receivership in June amid investigations by securities regulators in Ontario and Quebec.
The receiver, RSM Richter Inc., has said in court filings that most of the money invested in Norshield flowed offshore through a variety of entities in Barbados and the Bahamas, and that little actually ended up in hedge funds. The ownership of many of those entities is still in doubt and several are now insolvent, according to court reports. Mr. Xanthoudakis is co-operating with Richter and he has blamed a continuing legal battle with Cinar Corp., a producer of animated television programs for children, for many of the company’s problems.
