GrowthWorks Commercialization Fund Ltd. (Fund) announced today its board of directors has agreed to the termination, effective January 23, 2017, of the management agreement (Management Agreement) entered into between the Fund and GrowthWorks WV Management Ltd. dated June 28, 2005.
GrowthWorks Commercialization Fund said on January 17, 2017 it received ambiguous correspondence from the manager which, among other things, purported to terminate the Management Agreement.
“After considering further correspondence from the manager, the board has determined that the manager has failed to provide a lawful basis for terminating the Management Agreement. Nevertheless, given the manager’s apparent and persistent desire to terminate the Management Agreement and a deterioration of trust between the Fund and the Manager, the Fund has, in accordance with the terms of the Management Agreement, agreed to terminate the Management Agreement effective January 23, 2017.
GrowthWorks Commercialization Fund said it continues to seek additional information from the manager, including with respect to the amounts which the manager has paid itself on behalf of the Fund without the board’s knowledge. Based on the Fund’s preliminary investigations, the Board believes that the Manager has wrongfully withdrawn approximately $1.5 million, approximately one-half of the Fund’s cash on hand, from the Fund’s bank accounts.
GrowthWorks Commercialization Fund said it has commenced legal proceedings to recover those funds and to obtain other related relief.
As August 31, 2016, GrowthWorks Commercialization Fund reported $7.03 million in total assets with $1.66 million liabilities in IPA (Incentive Participation Amount) payable and conditional IPA payable to the manager.
GrowthWorks Commercialization Fund board is led by Chairman, Ian Ross, who is also the Chairman of GrowthWorks Canadian Fund Ltd., a formerly GrowthWorks managed fund and currently under CCAA protection.