According to Korda Mentha, Drake is being pursued for loans totalling A$17m. In addition, the trustee said it is also chasing prepaid management fees of A$12.3m made to LM Administration.
The loans are revealed in the trustee’s ninth report to investors, a copy of which has been seen by International Adviser, and which also says the trustees have been informed verbally, although not yet formally, that the “parties to which the demands have been issued are unable to repay these amounts”.
The report also revealed that Korda Mentha has begun investigations in relation to a number of aspects of the fund including:
• Any breach of trust in respect to:
– The prepayment of fees to the former trustee and its service provider LM Administration (LMA)
– The validity and commerciality of loans and security arrangements entered into the fund, including transactions involving other LM funds
– The general operation and management of the fund
• Transactions and loans involving Peter Drake in his personal capacity
• A full monies tracing exercise to understand the exact flow of monies in and out of the fund
• All related party transactions
Korda Mentha said it had commenced these investigations and would update unitholders on progress.
The report was also able to allay fears over a recent deal struck by SunCorp – a company with a first mortgage over the Maddison Estate, by far the largest investment made by the fund – confirming that SunCorp’s recent sale of a portion of its debt to Goldman Sachs did not include the project.
Look out for further updates tomorrow…
