Spanish firm seeks €3.24m from OMI

A SPANISH company has asked the Commercial Court to order an Irish-registered investment fund to pay out €3.24 million it claims it was due but which it says was stopped following the discovery of Bernard Madoff’s multi-billion dollar fraud activities.

Irish-registered fund, Optimal Multiadvisors Ireland (OMI), is opposing proceedings from Consulnor Gestion SGIIC SA which is seeking summary judgment over alleged failure to pay out the €3.24m due to investors in redemption monies.

OMI is a “feeder fund” which invests its assets in shares in a Bahama’s registered master fund, Optimal Multidvisors Ltd, (OMA). It (OMA) traded through a subsidiary, Optimal Strategic US Equity Ltd which in turn invested assets with Madoff’s now bankrupt company.

Consulnor claims it was entitled in December last to payment of the redemption monies from OMI relating to shares in the Optimal Strategic US Equity Ireland Euro Fund.

However, OMI told Consulnor that in light of the Madoff bankruptcy, its (OMI’s) board believed the net asset value of that fund calculated for December 1 last was unreliable.

OMI’s board said it could not therefore pay redemption monies and it suspended payments. It also said it would continue to monitor the situation and would update shareholders.

In a hearing which began before Mr Justice Peter Kellyyesterday, counsel for Consulnor argued the shares involved were redeemed on December 1, before the Madoff scandal broke, although they were not payable until 30 days later. Madoff pleaded guilty last week to fraud.

Counsel for OMI argued it had taken a decision to suspend payment out the day before the Madoff scandal broke and published notice of this the day after. Its decision was taken in compliance with the company’s articles association, counsel said.

The hearing continues.