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Friday 27 September 2013

13-266MR Court orders surrender of LM founders passport freezes assets

Following application by ASIC, the Supreme Court of Queensland has ordered the surrender of the passport of LM Investment Management founder Peter Drake, restrained his travel out of Australia and frozen his assets as ASIC’s investigation into the collapsed Gold Coast-based fund manager continues.

LM Investment Management went into administration in March 2013, with the company responsible for managing at least $750 million on behalf of almost 12,000 investors in Australia and overseas.

The Supreme Court of Queensland today made interim orders, which include preventing Mr Drake from selling his assets, though they do not extend to the intended sale of Mr Drake’s Mermaid Beach, Queensland home.

William Fletcher and Tracy Knight of Bentleys, who have been appointed as joint and several receivers of Mr Drake’s property, will be required to identify and secure all assets held by or on behalf of Mr Drake and to report to the court.

The matter will return to the Supreme Court of Queensland on 9 October 2013 when the court will decide whether to maintain the interim orders that have been made.

ASIC will not comment further at this time.

Background

ASIC’s investigation into the collapse of LM Investment Management is looking at the conduct of the directors and the management of the various managed investment schemes and transactions with related companies.

The surplus of the sale proceeds from the sale of Mr Drake’s home, which is expected to happen on Sunday, 29 September 2013, will go to Mr Drake’s solicitors' trust account and cannot be used or dealt with unless by order of the court or agreement with ASIC. If the property does not sell, this asset will be further dealt with by the court on 9 October 2013.

Investors and unitholders caught up in the collapse should check ASIC’s dedicated LM Investment Management webpage for further information.

Editor's note:

The application was set down for a further hearing on 8 October in the Supreme Court of Queensland to decide whether to maintain the interim orders made on 26 September 2013. The court made orders prohibiting Peter Drake from dealing with his property and leaving Australia without the consent of the court to remain in effect until further court order. The court shall continue to retain Mr Drake's passport until further court order.

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Last updated: 10/10/2013 12:00