Investor accuses Canaras, U.S. Bank of hiding $50 million CLO loss

An investor says it lost $50 million in a set of loan funds - and that the managers and trustee hid why. 

A Miami company, Alphatur Inc., sued three financial players in Manhattan federal court on July 4, and the case is a clean reminder of how much rides on the plumbing behind a fund - the collateral, the records, and the people paid to watch both. 

Alphatur says it put US$50 million into a set of collateralized loan obligation programs branded Saranac CLO III, V, and VII. CLOs are funds that issue securities backed by pools of loans, so investors live or die by the collateral and the rules for touching it. 

The defendants are Canaras Capital Management, Saranac CLO Management, and U.S. Bank Trust Company, the trustee on the deals. According to the complaint, Canaras described itself in a July 2013 pitch as an SEC-registered investment adviser based in New York that specialized in managing corporate CLOs. 

The core claim is simple to state. Alphatur says it was promised the collateral behind its notes would be preserved, monitored, and released only under the governing documents. Instead, the filing alleges, the defendants "authorized, permitted, recorded, concealed, or failed to prevent" collateral releases and transfers that "materially impaired the collateral base and destroyed Plaintiff's investment." 

Alphatur also says the trouble was played down. The complaint alleges the defendants described "catastrophic deterioration and collateral impairment as ordinary volatility." 

The complaint brings federal securities fraud claims under Section 10(b) and Rule 10b-5 against the two management firms, along with control-person liability and New York claims for breach of contract, breach of fiduciary duty, and gross negligence. It also seeks limited relief under the Investment Advisers Act. 

U.S. Bank is a different sort of defendant. Alphatur says it is not suing the bank as a guarantee of performance or as the "primary architect" of the conduct. Its theory is narrower: that as trustee and collateral administrator, the bank had to keep accurate records, police collateral releases, and give notice, and did not. 

That is where the dispute gets tangled. Alphatur says U.S. Bank replied in an October 2025 letter confirming it served as successor trustee on the three CLOs, yet reporting no record of Alphatur holding any note under the indentures. Canaras's counsel, according to the complaint, argued Alphatur never cleared Jersey know-your-customer checks and that some activity reports were "prepared in 2025 and backdated to 2023 as an accommodation." 

For advisors and compliance teams, the case is a reminder that how a loss is described to clients, how ownership and collateral records are kept, and how a trustee documents its role can all matter long after the deal closes. 

Alphatur wants more than US$50 million, a full accounting, and declaratory and injunctive relief. It has demanded a jury trial. 

The allegations have not been tested in court, and no court has ruled.