MotherRock to Holders: Go Pound Salt

Investors who once saw the MotherRock energy-trading hedge fund as their meal ticket will be lucky to get a bowl of stone soup out of the deal.

The two-year-old fund, which once handled $450 million worth of assets but imploded last month after a disastrous summer, is telling investors not to expect to get any money back.

Mother Rock, led by former New York Mercantile Exchange President J. Robert "Bo" Collins, shut its doors after losing roughly half its value in a series of highly leveraged bets on natural gas prices.

RMF Investment Management, a MotherRock investor, recently told its own investors that "there is a strong likelihood that investors will not receive any of their original investment." RMF Investment, a firm that specializes in investing in hedge funds, is a subsidiary of Man Group, the big hedge fund and financial-services conglomerate.

A copy of the Sept. 12 letter, provided to TheStreet.com by a source, says that last week MotherRock's primary broker "sold all remaining positions in the fund's portfolio to a third party." But the sale didn't generate enough money to repay the debts that MotherRock owed its broker.

RMF Investment says it doesn't know how much MotherRock still owes its broker.

A spokeswoman for RMF Investment, which is based in Switzerland, did not respond to an email seeking comment. Collins did not return a phone call placed to the hedge fund's New York office.