The receiver-run portfolio of Crocus Investment Fund companies continues to shrink.

Russ Holmes, the Deloitte & Touche LLP partner handling the Crocus receivership, has confirmed that the receiver has exited from three investee companies: National Leasing Group Inc., Wellington West Capital Inc. and Carte International Inc. He says more deals are on the way.

“We’re continuing to do what we’ve been doing for the past year, which is trying to negotiate exit agreements with a number of the companies. We’re monitoring the companies we think are long-term ‘holds’,” Holmes says.

In a report released last March, Holmes said he expected 60%-70% of the Crocus portfolio would have been dealt with by this autumn.

“We’re in that range now,” he says, noting there are about 20 companies remaining in the portfolio, down from the labour-sponsored investment fund’s apex of about 60 a couple years ago.

Holmes won’t reveal the amounts received by the trio of firms, but sources close to National Leasing and Wellington West have confirmed the former paid $20 million-$25 million to repatriate its ownership stake, while the latter paid $5 million-$10 million.

This leaves $50 million-$55 million in Crocus bank accounts, Holmes says. But he’ll have to sit on the funds until a Manitoba judge rules he can disperse them to shareholders.

“That’s our overall objective, our mandate. But we’re still not in a position to be able to do that,” he says.

Charlie Spiring, CEO of Wel-lington West, says his Winnipeg-based firm began negotiations to buy back Crocus’s 9% stake in the company prior to December 2004, when the fund voluntarily ceased trading.

“It was time for us to move on from the situation,” Spiring says. “Wellington West was one of Crocus’s best investments, if not the best. Crocus made five to 10 times on its original investment.”

Mark Chipman, who represents Megill Stephenson Co. Ltd., the majority owners of National Leasing (an equipment leasing business serving small and medium-sized businesses in Canada), confirms the transaction has been completed. However, he says, he is bound by his board not to discuss the specifics of the deal.

Carte is a Winnipeg-based manufacturer of liquid-filled transformers for electrical utilities, electrical distributors and large industrial customers.

GROWTHWORKS INTERESTED

David Levi, CEO of Vancouver-based GrowthWorks Capital Ltd. , which has made several unsuccessful offers to purchase the shrinking Crocus portfolio, says he is still interested in buying whatever is left.

Even if his overtures aren’t successful, he says, he remains committed to participating in the Manitoba market in the upcoming RRSP season.

“There is still an opportunity with Crocus for us. It is still worthwhile [to buy what’s left],” he says.

Levi says there’s not much more he can do except wait for a judge’s decision on a Manitoba Federation of Labour motion to hold a shareholders’ meeting. If the MFL is successful, a vote would be held on the latest GrowthWorks offer.

“We’re hopeful the receiver will be required to have a meeting,” he says.

But, Holmes says, the MFL’s efforts aren’t impacting his course of action: “If there’s an order by the court that changes our mandate, we will deal with that.”

Crocus was once a dominant player in Manitoba, raising tens of millions of dollars each year to invest in local companies.

It voluntarily halted the trading of its shares in December 2004 due to serious valuation problems. Within four months, its portfolio had been devalued twice, for a total of more than $60 million.

A damning report from the provincial auditor general in May 2005 cited a litany of mismanagement examples, particularly when it came to valuation.

A $200-million class-action lawsuit was filed in June 2005, which prompted the Crocus board and executives to resign because they no longer had insurance coverage.

Deloitte & Touche was appointed shortly afterward. IE