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Fox Guarding the Hen House

   

 

Secret donor fails to bail out ruined dealer

 

By David Baines

 

Friday, September 02, 2005
 

The mystery party who was allegedly going to donate $5 million to creditors of former Victoria investment executive Ian Thow has not materialized and neither has the money, according to bankruptcy trustee Michael Cheevers.

"As far as I know, there are no signs of the $5 million. I have had absolutely no contact with anybody who might be a benefactor," Cheevers said in an interview Thursday.

Thow is a former senior vice-president at mutual fund dealer Berkshire Investment Group Inc. By all appearances, he was highly successful and enjoyed a hugely extravagant lifestyle.

However, in May, he suddenly quit the firm, ostensibly for personal reasons. In ensuing weeks, dozens of creditors accused him of inducing them to buy investments that had apparently not been authorized by Berkshire, and appropriating the money for himself.

Last week, Thow filed a statement of affairs showing he has about $2 million worth of assets that are not encumbered, available to help pay off roughly $13 million in unsecured debt.

To avoid bankruptcy, Thow proposed to turn over these unencumbered assets, plus $5 million that would be provided by a mystery donor, for distribution to creditors.

Thow's former lawyer, David Gagnon of Harper Grey Easton, proposed to reveal the donor's identity to Cheevers so he could confirm that the donor is arm's-length to Thow, and that the money was not part of some secret stash that actually belonged to Thow.

"The key is to assure creditors that this is fresh third-party money that they cannot get any way other than by saying 'yes' to the proposal," he said at the time.

However, Cheevers said he has not heard anything further about the donor or the money. Gagnon, meanwhile, said he is no longer acting for Thow, but declined to say why.

Under Thow's proposal, Thow would retain all his clothing, watches and jewelry, computers and all household goods and chattels at his waterfront home in Central Saanich.

Cheevers said he tried several times to gain entry to the house to determine what goods and chattels were there, and to enable realtors to show the house to prospective purchasers. However, he said Thow was uncooperative, so Cheevers obtained a court order this week enabling him to gain entry.

Asked whether he found anything of value, Cheevers replied: "I don't want to talk about what we found because we need Mr. Thow to confirm our inventory list."

Cheevers also went to court to obtain access to Thow's computers. "We want to review the data [on the computers] to determine whether there is any useful information that would hint at the existence of any assets and accounting records," he said.

dbaines@png.canwest.com

 

see: 

Ian Thow takes flight