Raymond Chabot Grant Thornton LLP

October 05, 2007 17:48 ET

Transfer of RCGT Fund Assets to Group Segregated Funds Postponed

MONTREAL, QUEBEC--(Marketwire - Oct. 5, 2007) - Raymond Chabot Grant Thornton LLP ("RCGT"), the manager of the RCGT Balanced Fund No. 1 for Partners, the RCGT Balanced Fund No. 2 for Partners, the RCGT Money Market Fund for Partners (collectively, the "RCGT Partner Funds"), the RCGT Balanced Fund for Employees and the RCGT Short Term Yield Fund for Employees (collectively, the "RCGT Employee Funds") (the RCGT Partner Funds and the RCGT Employee Funds are collectively the "RCGT Funds"), wishes to announce that it intends to postpone the transfer of the assets of the RCGT Funds to group segregated funds with the identical name (the "Segregated Funds") created by Manulife Financial ("Manulife") (hereinafter the "Transfer"), to October 31, 2007 (the "New Transfer Date") for administrative reasons. As mentioned in the notice to participants dated July 30, 2007, the transfer date was initially set at October 1, 2007.

As the new administration of the Segregated Funds will require the sale of certain securities currently held in the Segregated Funds, it became clear to RCGT that it will not be able to obtain an advance ruling from the Canada Revenue Agency confirming that the Transfer is not a deemed disposition. RCGT therefore decided to withdraw its request for an advance ruling.

A deemed disposition of all assets within the meaning of the federal Income Tax Act and the Quebec Taxation Act (the "Deemed Disposition") means that the RCGT Funds will realize either a capital gain or a capital loss following the Deemed Disposition of each asset to the extent that the fair market value of the asset is greater or less than its adjusted cost base.

To ensure that it is not subject to income tax with respect to its current taxation year, on the day of the Transfer, the RCGT Funds will distribute to participants as needed an amount corresponding to their realized income and net capital gain. These amounts will be included by participants in calculating their income.

If the units are held in an RRSP, RRIF or other deferred tax plan or transferred from any such plan to another, the revenue and net capital gains which are attributed to participants by the RCGT Funds will be tax exempt until they are withdrawn from the plan. However, if the units are not included in an RRSP, RRIF or other deferred tax plan, participants will be taxed on the income and the net capital gains attributed to them by the RCGT Funds.

As RCGT has just made the decision to withdraw its request for an advance ruling from Canada Revenue Agency, it must now take other administrative steps before making the Transfer which will require additional time.

The unitholders may continue to purchase units of the RCGT Funds until the New Transfer Date, at which time the account of each unitholder will be transferred to the Segregated Fund. Any subscription subsequent to the New Transfer Date, by automatic withdrawal or otherwise, will be made to the Segregated Fund. If the specified procedure is followed, unitholders of the RCGT Funds may redeem their units before or after the New Transfer Date, at no charge.

About the RCGT Funds

The RCGT Funds were set up by declaration of trust to provide an alternative investment to certain persons associated to RCGT.

Contact Information

  • Raymond Chabot Grant Thornton LLP
    Jean-Marie Marcoux
    514-393-4723
    or
    Manulife Financial
    Jasmine Mangalaseril
    514-594-4185