The Australian Securities and Investments Commission (ASIC) sought the jurisdiction of the Queensland Supreme Court this week, in an effort to force winding-up orders and the appointment of PricewaterhouseCoopers registered liquidators as receivers of the LM First Mortgage Income Fund (FMIF).
Deutsche Bank – one of LMIM’s secured creditors – has already appointed McGrathNicol as the fund’s receiver.
Should ASIC’s appeal to the courts be approved, the regulator envisages the two receiving entities “work in conjunction … for an orderly realisation of the assets of FMIF”.
ASIC commissioner Greg Tanzer said the intervention is intended to allow the winding-up process to proceed efficiently and effectively to achieve “maximum return for investors”.
“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,” Mr Tanzer said.
In March, it emerged that LMIM was entering voluntary administration, as the $3.1 billion fund manager could not pay its creditors and was seeking to “maximise outcomes for all investors”.
"Voluntary administration is a proactive approach by the board to officially bring in independent financial advice across the company and the funds," said a statement to clients from LMIM management dated 19 March.
"This step is believed to be in the best interests of protecting the funds and maximising returns for investors, and preventing LMIM company cash-flow issues going forward.”
A LMIM spokesperson previously told InvestorDaily the authorised representatives operating under its AFSL would not be affected by the entering into administration, as they do not “write any business for [its] funds”.
