LM 'spin' on insolvency erased, asset seizure posed
In fact administrators John Park and Ginette Muller of FTI Consulting are not providing advice but are in control of the company.
Since being appointed on Wednesday, Mr Park and Ms Muller have frozen LM's five Australian funds, totalling about $750 million, and are believed to be investigating if they can seize control of the group's web of offshore entities.
Soon after their appointment, Mr Park and Ms Muller had a long meeting with investigators from the Australian Securities and Investments Commission, which is investigating LM.
In an unusual strategy for administrators of a large group with retail investors, they have said little since their appointment. They declined to speak to BusinessDay.
The single largest asset of LM's managed performance fund is believed to be a $240 million second mortgage over Maddison Estate, residential land in the Gold Coast hinterland that is being developed by LM founder and chief executive Peter Drake. Mr Drake did not answer a call on Sunday and BusinessDay has been unable to ascertain if he is in the country.
Lawyers are also circling the stricken group, with Piper Alderman investigating the possibility of a class action and Slater & Gordon focusing on financial planners who tipped clients into LM's products.
In a letter to investors dated March 20, LM's directors also said the $12 million Australian structured products fund would not be affected by the administrators' appointment. The letter, removed from the LM website on Thursday, is signed "the directors".
Frequently Asked Questions about this Article…
Administrators from FTI Consulting were appointed to LM Investment Management after the group failed. The administrators removed a statement from LM's website that had described their appointment as a "proactive approach" to bring in independent financial advice. Since their appointment they have frozen LM's five Australian funds and taken control of the company rather than simply advising it.
The administrators are John Park and Ginette Muller of FTI Consulting. According to reporting, they are not acting as advisers but are in control of the company and its affairs, having frozen the group's Australian funds and taking steps to investigate the wider business.
The administrators have frozen LM's five Australian funds, which are reported to total about $750 million in assets under management.
Yes. LM removed a statement from its website that said the appointment of insolvency practitioners was a "proactive approach" by the board to bring in independent financial advice. A separate letter to investors (dated March 20) was also removed from the LM website.
The single largest asset in LM's managed performance fund is believed to be a $240 million second mortgage over Maddison Estate, residential land in the Gold Coast hinterland that is being developed by LM founder and chief executive Peter Drake.
Yes. Soon after the administrators were appointed, they had a lengthy meeting with investigators from the Australian Securities and Investments Commission, which is itself investigating LM.
Law firms are circling the group. Piper Alderman is investigating the possibility of a class action, and Slater & Gordon has been focusing on financial planners who recommended LM products to clients, according to the article.
LM directors wrote in a letter dated March 20 that the $12 million Australian structured products fund would not be affected by the administrators' appointment. That letter, however, was removed from the LM website after the administrators were appointed.
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