Canaras Capital Management finds itself the subject of a complaint filed by a firm, which appears to be linked with a Venezuelan family office, in relation to a set of post-reinvestment CLOs. However, the firm’s founder and CEO Anthony Clemente has told 9fin that the claims are “frivolous”.
The complaint itself (filed in the US District Court for the Southern District of New York against Canaras and CLO trustee US Bank) is curious. It has been filed by Alphatur Capital, which is seeking damages in excess of the $50m it claims to have invested in Canaras CLOs. The problem is, there is no record of the firm investing in the CLOs (according to the filing, citing trustee US Bank which “had no record of Alphatur as holder of any notes”).
Notwithstanding that, Alphatur’s complaint states that its ‘investment’ was impaired as the defendants “authorized, permitted, recorded, concealed, or failed to prevent collateral releases, asset transfers, redemptions, reallocations, dissolutions, and related transactions that materially impaired the collateral base and destroyed plaintiff’s investment”.
It further alleges that the condition of the collateral was concealed including by “describing catastrophic deterioration and collateral impairment as ordinary volatility”. It further claims that the defendants...
