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Although more than four years have passed since regulators shut down notorious hedge fund Portus Alternative Asset Management Inc., officials overseeing its liquidation are continuing their hunt for money that might have been moved outside of Canada by company co-founder Boaz Manor.

The latest step by receiver KPMG Inc. is a legal motion scheduled to be heard Sept. 2 to have Mr. Manor, who lives in Toronto, declared bankrupt. It is a move that could help in the international hunt for assets, according to receiver lawyer John Finnigan.

Mr. Finnigan said a bankruptcy order is widely recognized by courts around the world and is easier to enforce abroad than a Canadian court order. It also comes with broad powers to pose questions about Mr. Manor's finances to people who might know where assets are located, he said.

"To the extent [Mr. Manor]has money or assets hidden, it enhances our ability to find them," he said.

"No one is holding their breath, but this maximizes our options."

Portus was shut down by the Ontario Securities Commission in 2005 amid concerns that the firm's money was not being invested as promised, leaving 26,000 investors worried about the fate of more than $800-million in investments.

Since then, more than $700-million has been repaid to investors, largely from notes guaranteed by French bank Société Générale SA.

The receiver is still trying to trace what happened to at least $17-million of assets that have not been located, including $9-million (U.S.) worth of diamonds that Mr. Manor took to Israel. He later said he no longer had the diamonds.

Mr. Manor moved to Israel when Portus was closed, but returned to Canada in 2007 after he was charged with multiple counts of fraud, money laundering and possession of property obtained by crime. He lives in Toronto and is free on bail awaiting trial on those charges. The trial is scheduled to begin Sept. 20, 2010.

In recent years, Ontario courts have made rulings against Mr. Manor requiring him to repay $17-million (Canadian) in missing funds, but he has not complied with the orders. One ruling last year requires Mr. Manor to repay $110,000 that was removed from Portus on the day the company was placed in receivership.

Mr. Manor is fighting that ruling and seeking to have it struck down.

Lawyer Gerald Matlofsky, who is acting for Mr. Manor, did not return phone calls seeking comment.

According to court documents, Mr. Manor acknowledged receiving the $110,000 from Portus, but argued he was authorized to take it to finance his legal costs. He also argued that he received notice of the case only after a court order was made in default last year when he did not mount a defence.

Last month, Mr. Justice Peter Cumming of the Ontario Superior Court dismissed Mr. Manor's motion to set aside the judgment and permit a defence to be filed. The judge ruled Mr. Manor did not present adequate evidence to refute an affidavit from a process server who said he served Mr. Manor personally with the legal action in July, 2008.

The judge also ruled there was no evidence to support the claim Mr. Manor was authorized to use the money for his legal costs.

Mr. Manor has claimed he does not have the money to pay the judgments against him. According to Judge Cumming, Mr. Manor said in cross-examination that he is working for a family holding company and has an annual income of $60,000 a year, "although he refused to offer much information about his employment," the judge said.

While a declaration of bankruptcy normally relieves people of obligations to repay debts, Mr. Finnigan said there is no risk it could help Mr. Manor avoid court orders to repay funds.

"Debts based in fraud are not discharged by bankruptcy," Mr. Finnigan said.