Franklin, Andrews, Kramer & Edelstein

[jurisper]

How are Laurus/Valens/the Grins doing these days?

http://citywire.co.uk/wealth-manager/fury-as-structured-debt-trust-investors-face-heavy-losses/a582829

Investors [evidently morons] in the troubled PSource Structured Debt (PSD) trust have vented their frustration, as they wait to hear whether any value can be realised from the proposed IPO of the trust’s main asset, a US-based microcap biomass firm [Parabel f/k/a PetroAlgae, PINK:PABL; almost totally owned by Laurus + associates, hardly ever trades, huge negative equity, no revenue, completely bogus ~$300M market cap, stalled bogus-looking IPO plans back in 2010, zero IPO prospects now.]

The $75.4 million trust, managed by US-based Laurus Capital Management’s Eugene and David Grin, is currently trading on an 83.6% discount to net asset value (NAV) discount and has lost 60.8% over the past 12 months. It counts Midas Capital, Brooks Macdonald, Collins Stewart and Premier Asset Management feature among its largest shareholders.

Although Laurus has announced proposals for a managed wind-down, investors are furious the board allowed the trust to breach its investment policy. Its largest holding in biomass company Parabel now stands at just under 80% of the portfolio.

The success of realising value from the trust depends on its IPO, although the early stage company is yet to generate any revenues. Complicating things further, Parabel is also owned by Laurus through two of its funds.

Colin McInnes of Quartet Capital Partners, who inherited a holding in the trust as a legacy position in a client portfolio, added: ‘Notionally there is secondary market liquidity, but it is trading on an 80% discount. But this discount is tied up in a single company which lost $50 million and has zero revenues. I am just surprised that PSource or the independent board of directors did not have greater oversight to what has been happening with the underlying investment.’

MAM Funds’ Richard Parfect is the trust’s largest shareholder through holdings in his Midas Balanced Growth fund and Income and Growth trust, having invested since launch. He said the firm is not pushing to appoint a liquidator due to Laurus’ substantial interest in Parabel, but believes a successful IPO is not out of the question.

‘We have been in the trust for a long period and there is no point in selling now, even if it is a small part of the portfolio,’ he said. ‘There is a future possibility of returns and we don’t want to lose the opportunity as there could be a successful realisation of the main asset.’

The trust launched in August 2007 targeting investment opportunities in US growth companies through secured debt and warrants. However, when the financial crisis hit the investment company accrued a $24 million liability to the Bank of Scotland. The trust has now paid off its debt.
PSource managing director Soondra Appavoo stressed the board had taken the first available opportunity to wind down the trust, adding: ‘Ultimately the board of PSD continues to monitor Parabel very closely and is committed to the process of achieving good value.’

And recalling Nathan Vardi's pieces on Laurus, PSource, PALG/PABL etc a couple of years ago, eg:

http://www.forbes.com/forbes/2009/0907/money-laurus-capital-petroalgae-hedge-fund-shuffle.html
http://www.forbes.com/sites/nathanvardi/2010/09/21/the-real-reason-for-the-petroalgae-ipo/