BCS - BrisConnections Unit Trusts

sails said:

Source: BrisConnections EGM under the microscope

Click to expand...

The bottom half of that article is even more interesting.

While Tuesday's deal appears to have disarmed Mr Bolton, BrisConnections may face a new source of trouble in the shape of Melbourne investor David Barrow.

Mr Barrow has been snapping up BrisConnections units through his Julie Anne Barrow Charitable Trust and last night told BusinessDaily he had accumulated close to 5 per cent of units on issue, gifted to the trust by other investors.

BrisConnections units, which last traded at 0.1, each carry a total future liability of $2 in two instalments, and Mr Barrow said if both instalments were called in he would have to pay about $40 million.

He said the trust had bought the units based on the positive statements of BrisConnections management.

"The long-term 45-year concession, the scarce asset -- the sort of things Trevor Rowe was talking about yesterday," he said.

Asked if he might sue if the project failed to live up to its forecasts, he said: "We wouldn't rule any litigation out."

Click to expand...

Putting 2 and 2 together.....

JAB_Charity said:

Our refrain is still: There are many possible outcomes between now and when the 29 April 2009 liability may crystalise for unitholders on that date (only).

And we also note that if there is any shortfall in meeting the liability on 29 April, then of course the Underwriters will step in to meet the commitment, and there will then be a Public Auction of the forfeited units on or around 4 June 2009 [see ASX 9 Dec 2008 BCSCA announcement Fact Sheet para 18] -- at which time the long-term value of the project may well have improved in line with the views we share with others (including BrisConnections themselves) on the investment fundamentals of the project.

Click to expand...

David is relying on,

1) An outcome by 29 April 2009 that yields capital for the charity (one slim possibility being a nominal offer to current unitholders to fully privatise Brisconnections).

or,

2) That the Public Auction of forfeited units on or around 4 June 2009 yields more than than the instalment amount beyond those units that the charity wishes to retain by paying the second instalment.

Trevor Rowe's idea of long term might be a bit longer term than that.

Wow, I've been away and only keeping half and eye on everything thats been going on, but what a turn of events. There seems to be so much irrational behaviour surrounding this situation, and so many questionable dealings. Quite remarkable.

just listening to abc radio
they have mentioned that it is actually nick boltons sister who holds 99% of the liability and he has been acting on her behalf

also all three parties , bolton,barrow and toll have been in continuing discussions

could there be a possibility of a takeover of the company in the future

He said the trust had bought the units based on the positive statements of BrisConnections management.

"The long-term 45-year concession, the scarce asset -- the sort of things Trevor Rowe was talking about yesterday," he said.

Click to expand...

Good one!

jackson8 said:

just listening to abc radio
they have mentioned that it is actually nick boltons sister who holds 99% of the liability and he has been acting on her behalf

also all three parties , bolton,barrow and toll have been in continuing discussions

could there be a possibility of a takeover of the company in the future

Click to expand...

Interestingly enough, the news.com.au story on this seems to be incorrect. It states that she owns 99% of Australian Style Pty Ltd and Australian Style Holdings Pty Ltd which is a great place to be - ASH just inherited $4.5M and Australian Style Pty Ltd owns the domain name company assets that Mr Bolton has (Domain Central, Bottle Domains, etc).

Australian Style Investments Pty Ltd on the other hand owns the $2 liability for the 78 million odd shares. It specifically does not mention that she owns a stake in that business.

The story is at http://www.news.com.au/business/story/0,27753,25341091-462,00.html

okay he has his 4.5 m now what s to stop him transferring his shares to say the Barrow trust
thus relinquishing his responsibility's
giving Barrow trust a majority and a place on the board

jackson8 said:

okay he has his 4.5 m now what s to stop him transferring his shares to say the Barrow trust
thus relinquishing his responsibility's
giving Barrow trust a majority and a place on the board

Click to expand...

I think you may be on to something - very close to the mark my firend very close

The ABC radio segment on Brisconnections can be accessed from the following link.

http://www.abc.net.au/news/subscribe/twtrss.xml.

The segment on Brisconnections commences at about 18m30s. It includes an interview with David Barrow.

jackson8 said:

okay he has his 4.5 m now what s to stop him transferring his shares to say the Barrow trust
thus relinquishing his responsibility's
giving Barrow trust a majority and a place on the board

Click to expand...

Wow... did not think about this. That would give Barrow about 25% of the units would it not? That would be bloody hard for the other involved parties to ignore.

Would cap an absolute masterful stroke of genius I would say. Totally unethical, but genius.

Mc Gusto said:

I think you may be on to something - very close to the mark my firend very close

Click to expand...

Something tells me that yes, this may indeed be the case. I don't expect David to confirm or deny that he may be in discussions with Bolton to accept the ASI holdings....

Re: Standing by unit holders

Jim,

Is there a means of quick access (such as a website) from which unitholders can access the terms and conditions of your client's offer and also access to a transfer form as David Barrow has done ?

This article could explain why people appear to be holding on to their units and explains some of the flaws that apparently exist in the off market transfer system. It says Humphrey B Bear has owned bcsca units...

Calling Humphrey Bear, please come in

Much more detail in the article - following is a small except:

In November BusinessDay highlighted a serious flaw in the off-market transfer system that allows shares to be held in false names, by buying a share in a listed company in the name of a bird named Mr Bud Gerigar.

The off-market transfer scheme is used to launder money and hide shareholdings. It has been adopted by some BrisConnections unit holders to try to avoid making the next payment due on their units.

Click to expand...

Hello Sails,

Yes -- we did note this article by Mark Hawthorne of The Age:

Calling Humphrey Bear, please come in

In November BusinessDay highlighted a serious flaw in the off-market transfer system that allows shares to be held in false names, by buying a share in a listed company in the name of a bird named Mr Bud Gerigar. ...

Click to expand...

I personally spoke with Mark last week and on seeing The Age article we have immediately written to Mark as follows:

Regarding your article "Calling Humphrey Bear, please come in" [+17 April 2009] are you suggesting or implying that off-market transfers of BCSCA units to The Julie Anne Barrow Charitable Trust are 'fake' or voidable?


In our view, the manner in which you have written the article could leave readers with that impression.

We would welcome a public correction or clarification in this respect.

Click to expand...

Reading the article closely there is no such positive allegation of any impropriety by The Julie Anne Barrow Charitable Trust, but with so much of the article detailing what appear to be a number of voidable transfers (to fake entities) the unwarranted association is not welcome as readers and unitholders can imagine.

The article does however make a helpful distinction between 'real transfers' and 'fake ones' as follows:

There are all these real transfers that have happened, and someone will have to track down the fake ones," he said [Melbourne barrister Geoffrey Slater].

Click to expand...

Of course with regard to our following comments, and generally, unitholders should obtain their own professional advice.

That said: Our view on the corporate law in relation to off-market transfers is that such transactions would indeed be voidable if the entity to which the unitholder is attempting to transfer the shares is fictitious or is in someway acting in a non-arms-length type of collusion with the unitholder (a nefarious 'common and mutual goal') to willfully evade a liability as the only purpose of the transaction. Such attemps are rightly voidable. An example would be setting up a $2 company and then clumsily attempting to transfer the units to this $2 shell -- followed by attempting to sink the company to the bottom of some harbour. Litigators and regulators see through these types of scams -- and do not let them stand.

It is also our strong view that there is no such voidable transaction in relation to off-market transfers of BrisConnections (BCSCA) units to The Julie Anne Barrow Charitable Trust by way of share donations.

In the view of our charity, this also accords with Justice Robson's recent decision Re Australian Style Investments Pty Ltd [2009] VSC 128 (6 April 2009) 66 at [234]:

As to the suggestion that ASI has engaged in some sort of improper scheme by having units transferred to it by a deed of gift, I do not accept that submission. I see nothing improper in a unit holder transferring its units as alleged. The project imposes liability on persons who are unit holders on a certain date. On the basis of the submissions before me, I find there is no impropriety per se involved in a person taking steps to ensure that he, she or it is not a unit holder on the instalment date. It appears that a great many unit holders disposed of their units in October and November of 2008. It may have been the case that they did so to evade the payment of the instalments. In any event, it is not necessary for me to make any findings about those matters.

Click to expand...

It was only after this judgment was handed down on 6 April 2009 that The Julie Anne Barrow Charitable Trust then entered the market to acquire BrisConnections (BCSCA) units by way of share donations.

We also note that the article under the byline of Mark Hawthorne has made no reference to The Julie Anne Barrow Charitable Trust in the similar article posted not long thereafter in the Fairfax sister paper of The Age, being the Herald Sun:

BrisCon forced into bear hunt

We hope our comments may better inform readers. And we leave the matter for forum users and readers and the unitholders facing a potential liability on 29 April 2009 to make up their own minds.


David C. Barrow, Trustee, The Julie Anne Barrow Charitable Trust

http://www.barrow.org.au

JAB_Charity said:

It was only after this judgment was handed down on 6 April 2009 that The Julie Anne Barrow Charitable Trust then entered the market to acquire BrisConnections (BCSCA) units by way of share donations.

Click to expand...

I was wondering why you were so late in entering the fray. Looking back that could have been Leighton's cue as well.

Re: Standing by unit holders

drsmith said:

Jim,

Is there a means of quick access (such as a website) from which unitholders can access the terms and conditions of your client's offer and also access to a transfer form as David Barrow has done ?

Click to expand...

It’s very simple, if unit holders wish to take advantage of the Brisbane toll Road offer. They email j.byrnes@alfpl.com , they state there name ( that is the name in which the units are owned ) the number of units owned , the address for mailing purposes , landline and mobile numbers . Finally who there units are with..ie we bought through comsec or e trade ..Whoever? Then within 8 hours an offer will be emailed and a transfer. They, the seller executes, scans and returns .The buyer executes the transfer same day and lodges with comsec or who ever..We get the transfers processed same day as they are lodged, we have all the back office people’s details and get them processed faster than anybody
James W Byrnes & Associates

j.byrnes@alfpl.com

JAB_Charity said:

...Reading the article closely there is no such positive allegation of any impropriety by The Julie Anne Barrow Charitable Trust, but with so much of the article detailing what appear to be a number of voidable transfers (to fake entities) the unwarranted association is not welcome as readers and unitholders can imagine.

The article does however make a helpful distinction between 'real transfers' and 'fake ones' as follows:......

Click to expand...

Hi David,

Please be assured, that in no way was I comparing any transfers to a registered entity such as yours to those discussed in the article.

I posted the article as it explained a possible reason for the apparent lack of interest in holders taking up the offers to transfer these units to an unrelated entity who wants them. This lack of uptake has been somewhat of a mystery to those of us outside looking in.

I'm no lawyer, but in my simple perspective as a lay person, I would have thought a transfer is more likely to hold if it is made to an unrelated entity who wishes to acquire them for their own business purposes than to Humphrey B Bear living in Uganda.

I would have also thought the names alone would put them at high risk of having those types of transfers voided. I know if it were me, I would prefer, what I consider to be the safer transfer that you and Jim are currently offering, but that is just my opinion without any legal advice. And I do believe all holders should ensure they have been advised by qualified independent legal advice for their particular circumstances.

You have given some very thoughtful replies, even though we don't fully understand your reasons. However, with such high stakes, I imagine you do have business and contingency plans in place.

Thank you for your thoughtful replies and hopefully, it will help holders make informed decisions together with sound legal advice.

Is the cut off time for transfers midnight on Wed 22nd?

Re: Standing by unit holders

jim Byrnes said:

It’s very simple, if unit holders wish to take advantage of the Brisbane toll Road offer. They email j.byrnes@alfpl.com , they state there name ( that is the name in which the units are owned ) the number of units owned , the address for mailing purposes , landline and mobile numbers . Finally who there units are with..ie we bought through comsec or e trade ..Whoever? Then within 8 hours an offer will be emailed and a transfer. They, the seller executes, scans and returns .The buyer executes the transfer same day and lodges with comsec or who ever..We get the transfers processed same day as they are lodged, we have all the back office people’s details and get them processed faster than anybody
James W Byrnes & Associates

j.byrnes@alfpl.com

Click to expand...

With regard to the the terms and conditions of your offer has this information been made public and if so where ?

Of particular interest is the following,

1) Are you (either yourself or on behalf of your client) charging a fee to transfer the units out of the hands of the retail investor ?

2) If so is it a fixed fee (fixed per unit or just a fixed amount regardless of holding (like Nicholas Bolton did)) or are you otherwise varying it depending on individual retail holder circumstances ?

Answers to the above questions are of obvious significance to retail unitholders looking to dispose of their holding so they can compare it with the offer from David Barrow's charity.

Radio National had a promo to advise "The National Interest" will have a further item on this mess today, aired after the 6pm News.

Re: Standing by unit holders

drsmith said:

Jim,

Is there a means of quick access (such as a website) from which unitholders can access the terms and conditions of your client's offer and also access to a transfer form as David Barrow has done ?

Click to expand...

drsmith said:

With regard to the the terms and conditions of your offer has this information been made public and if so where ?

Of particular interest is the following,

1) Are you (either yourself or on behalf of your client) charging a fee to transfer the units out of the hands of the retail investor ?

2) If so is it a fixed fee (fixed per unit or just a fixed amount regardless of holding (like Nicholas Bolton did)) or are you otherwise varying it depending on individual retail holder circumstances ?

Answers to the above questions are of obvious significance to retail unitholders looking to dispose of their holding so they can compare it with the offer from David Barrow's charity.

Click to expand...

Since the last post we have been offered almost 7 million units .BTRL can acquire up to another 20million unit. BTRL preferred to take up larger parcels of 500,000 or more. BTRL has an offer document that provides for a small payment to unit holders. BTRL does not to buy small parcels or units from original IPO unit holders for a reason that will become clear next week.

If however BTRL or its corporate representative are offered a contribution to buy the units and or to assist in meeting legal costs, the corporate representative would be happy to receive payment. However provided the holdings are large enough that would not be required. it cost so far $40k in legal to get all the transfers attended to ...its not cheap ..so you can see why buying 10,000 does not appeal

At the rate things are going there couldn't possibly be too many retail shareholders left. Even though the resolutions failed, it looks like most retail holders have been handed a life line by Jim and Barlow.

Next week will be interesting

charitable trust ???

I have spoken with David, who doubt has good intentions. The tax act is very specific re charitable donations.

If an item is donated it must be of a value and the consideration is the amount equal to the donation.

Items donated to a charitable organization must be to be deemed a donation at either market value or as per a sworn valuation.

I have Spoken with David and consulted a tax QC (actually I bough him coffee as he is a mate and asked the question and got an answer for the cost of a coffee, )

As I understand it the transfers are being rejected by Comsec an others.

As the transfers do not show a consideration they are likely not to be deemed a gift as they are shown to be valueless and there for as far as the tax act is concerned they fall within part 4a .

David’s Charity needs to resolve all this and fast as they may loose there Charitable status, which clearly is not a good thing.

All transfers will need to be re issued. Re done for the proper consideration of .001 and then re submitted, a receipt equal to the amount of the consideration issued to the seller for there donation being the consideration shown on the transfer .

It would help if the sponsoring brokers new that the documents had been certified by lawyers and thereafter would process the balance of transfers quicker.

Given the current timing, it may be that the Charity will fail to get any of its transfers registered …more problems for unit holders.

Brisbane Toll Road Link, spent over 40,000 with its lawyers processing offers and transfers and getting same reregistered. It’s a tough learning curve and a trap for new players
James W Byrnes & Associates