# CLF - can I go to court?



## stockman (6 June 2005)

I have in written form an email from the CFO from Community Life on the 27th April 2005.

Stating that "The board had committed to paying out a 6.5 cents capital return which it is not prepared to vary"

I held the stock waiting for that return based on that statement, do I have a leg to stand on?

If so who should i go to? 

These guys are crooks and can't ve trusted funnily enough the CFO Ralph Bryan has resigned. I wonder why.

Thanks guys


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## krisbarry (6 June 2005)

*Re: CLF - can i go to court.*

It would appear that the Retirement Stocks are hitting the wall, and very hard. OUCH! 

CLF
VLL
LVL

These 3 stocks have dropped more than 100% over the past 6 months


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## TjamesX (6 June 2005)

*Re: CLF - can i go to court.*



> Community Life smacked 29% on downgrade
> 
> Shares in Community Life dived 29% today after announcing that net profit after tax for the current financial year was now expected at $80k, down 84% from its previous estimate of $500k. The company also advised that it would not be making the capital return payment of 6.5c per share to shareholders as indicated earlier in the year.
> 
> By noon, shares were down 8c, or 29% to 19.5c.




As far as going to court, I really don't know. However the management and directors have a certain responsibilities when running a company - and not trading insolvent is one of them. I would guess the reason they have not honoured the capital return is that the company would be in serious cash flow trouble if they did. Then they would have to raise more money - and the chance of doing that after their record now is bugger all.

I'm not trying to be harsh here but... seems to me as if the recent floating of aged health care/retirement home businesses was a case of investors buying a story rather than a business. Its all very well to say that there will be baby boomers retiring in huge numbers and there is a lot of money to be made servicing these people - its a whole other kettle of fish operating a company to actually PROFIT from it.

management and directorship are always crucial no matter what the business is.

TJ


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## stockman (6 June 2005)

*Re: CLF - can i go to court.*

Understood, however I held the stock because of the promise of capital return. As they stated above in an email.


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## Knobby22 (6 June 2005)

*Re: CLF - can i go to court.*

You can complain the ASX as a first step. Then ASIC.
You say you have this from an email.
Was it public knowledge? If not, it is insider trading and illegal (for you to act on it). If so, I would tread wearily.


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## serp (6 June 2005)

*Re: CLF - can i go to court.*

You obvisously need to seek legal advice in regards to the corporations legistration, the ability for you to go to court very much depends on what you are taking the company to court for and under what position (if you are a major shareholder etc).

I think from the information we have from your post (which is not much), no one here could give you real advice, best to speak to a lawyer/solicitor. etc.


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## Knobby22 (6 June 2005)

*Re: CLF - can i go to court.*

I see Pierpoint did an article on this company - always a bad sign.
And that was before the latest downgrade.
Got to www.egoli.com.au to read it.

It appears to me that the CFO had no idea what he was doing.
It's hard to sue for incompetance.


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## Warren Buffet II (6 June 2005)

*Re: CLF - can i go to court.*

Hi Stockman,

Reading the announcement from the 26 April, they said that the company proposes making a retunr of capital (subject to shareholder and regulatory approvals) to shareholders of 6.5 cents per share. 

And then today, they said that they will not be making the capital return payment.

In my opinion, they are right and should n't return any money as long as the company is not on its feet.

I gues, any comments outside this pubic announments are illegal and not valids.

WBII


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## TjamesX (6 June 2005)

*Re: CLF - can i go to court.*



			
				Knobby22 said:
			
		

> You can complain the ASX as a first step. Then ASIC.
> You say you have this from an email.
> Was it public knowledge? If not, it is insider trading and illegal (for you to act on it). If so, I would tread wearily.




ASX then ASIC are your best options for inquiry as to where you stand.

The fact that there was to be a capital return was public information and therefore should not be considered as 'insider info'. The guts of it seem to be that you took the email as a certainty that there will be capital return - as we don't have the exact wording of the email its hard to comment, even in that case I'm not sure whether a promise/guidance to an individual investor can be acted on legally as any sensitive information he provided should already be made public.....but

You could argue that at that particular time the CFO should or did have information that the companies ability to pay the capital return was not a certainty. His email was confirmation that at that particular time he believed that the company will be able to pay. I find it hard to believe that the companies financials could have changed so drastically in such a short period of time, without the CFO being aware....

Even in this case it is likely that the most that could happen is the company gets in deep **** for not keeping up with continuous disclosure requirements. As the CFO has now resigned the directors could argue he held info from them... and they updated the market when it was available... Need to look at Corp Act to see if an individual (CFO) can be prosecuted under continuous disclosure requirements by an investor to recover their losses (see ASX listing rules - continous disclosure and relevant section of the Corp Act 2001)

TJ


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## Smurf1976 (6 June 2005)

*Re: CLF - can i go to court.*



			
				krisbarry said:
			
		

> These 3 stocks have dropped more than 100% over the past 6 months



Sorry to pick on your maths, but dropped more than 100%??? Can't see how this could really happen from a mathematical perspective.


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## mime (6 June 2005)

*Re: CLF - can i go to court.*



			
				krisbarry said:
			
		

> It would appear that the Retirement Stocks are hitting the wall, and very hard. OUCH!
> 
> CLF
> VLL
> ...




How does a stock drop more then 100%?


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## krisbarry (7 June 2005)

*Re: CLF - can i go to court.*



			
				mime said:
			
		

> How does a stock drop more then 100%?




The same as a stock can rise more than 400% such as BKV, late last year, within a matter of 2 days. PNO did the same within 3 days too mid last year.

I am sure you have seen stocks rise or fall by more than 100% in a day, week, month.  Depend how you calculate it, from the previous days trade or within a period of (X) to (Y)

LVL from 22 cents to 3.5 cents
VLL from $2.88 to 43 cents
CLF from $1.00 to 19 cents

I am sure you can spot a 100% fall in all 3 of these stocks from point (X) to point (Y)


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## Warren Buffet II (7 June 2005)

*Re: CLF - can i go to court.*



			
				krisbarry said:
			
		

> The same as a stock can rise more than 400% such as BKV, late last year, within a matter of 2 days. PNO did the same within 3 days too mid last year.
> 
> I am sure you have seen stocks rise or fall by more than 100% in a day, week, month.  Depend how you calculate it, from the previous days trade or within a period of (X) to (Y)
> 
> ...




Hi Krisbarry,

I think you are wrong in this case. That is an illusion that can confuse many poeple when they see a share that drops more than half its X-price.

% Drop = 1 - Y/X

LVL  = 1 - 3.5/22  = 84%
VLL  = 1 - 43/288 = 85%
CLF  = 1 - 19/100 = 81%

WBII


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## stockman (7 June 2005)

*Re: CLF - can i go to court.*

Thanks for the info guys. Interesting comments.

I was concerned they would run out of money and I thought the capital return was ridiculous how could they afford it. The comments I got back on the 27th April from Ralph Bryan was as follows. Having got this email I thought geez if they can afford it and "they are committed and board level and not prepared to vary" then they must be going ok. So I stupidly held and funnily enough his going. Three announcments before hand were everything is on track as well.

Read his comments. This site is great and comments are excellent.

Email said, 

"Michael,



No, we have not been able to get any research reports on CLF.

Your comments re the capital return are noted and understood. 

At Board level, as well as in our ASX release to the market yesterday, CLF has now made a commitment (i.e. capital return of 6.5 cps) which it is not prepared to vary.


Regards


Ralph Bryan CFO


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## krisbarry (7 June 2005)

*Re: CLF - can i go to court.*

I understand your point and yes it makes sense it terms of mathematical calculations, but I have seen it many time b4.  Here is my example... On national Australia Bank On Line Trading, under the section "Top 20 securities by % falls" can record stocks as dropping by more than 100% on a daily bases.  I have seen options fall by more than 500%.  So it is possible, but as you mentioned, an illusion.


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