Wellington Capital PIF/Octaviar (MFS) PIF

[Blueboy1]

Re: Octaviar MFS Premium Income Fund PIF

Interesting article from the NZ perspective.
Adviser: OPI cash hope lies in court
By ROELAND van den BERGH - The Dominion Post
Last updated 05:00 18/09/2009

Government-funded court action is the only hope investors in collapsed finance company OPI Pacific Finance have of recovering any of the remaining $200 million they are owed, investment adviser Chris Lee says.

OPI has been put in receivership by its trustee Perpetual Trust, ending a moratorium in place since May last year.

The move follows the court-ordered liquidation in July of OPI's Australian parent Octaviar.

At the time of the moratorium 12,000 investors were owed $314m, making it the third-largest finance company failure after Bridgecorp and Hanover.

OPI, formerly MFS Pacific Finance, was forced to default on repayments in January last year when Octaviar, previously MFS, withdrew financial support.

Debenture holders received 22.17 cents in the dollar when the moratorium was approved, leaving $200.1m owed to secured debenture holders and $56.7m to unsecured note holders, who have not been repaid anything.

Perpetual Trust head of corporate trust Matthew Lancaster said: "The trustee's opinion is that a receivership is now appropriate and in the best interests of OPI's investors."

OPI had a "put option" over Octaviar for the rest of the money owed. But Mr Lee said the "put option" was an unsecured guarantee and never had any value because Octaviar itself had negative shareholder funds.

New Zealand investors' money was lent to Octaviar with no more security "than a handshake", Mr Lee said.

However, a potentially multi-million-dollar settlement in favour of investors in Australia this week could provide a way for OPI investors to get more of their money back, Mr Lee said.

In an unrelated case, Australia's biggest financial planning group Professional Investment Services this week agreed to compensate 247 clients for alleged misleading and deceptive conduct in advising clients to invest A$393m in risky investment products.

The case was brought by the Australian Securities and Investment Commission, which was initially seeking A$23m in compensation for the investors.

"That might be a signal as to what should be happening here," Mr Lee said.

The Government could not repay investors, but it could fund the cost of seeking compensation from company directors, trustees or auditors if they had failed in their duty of care, Mr Lee said.

The Government would recover its costs from any settlement.


Blueboy1

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

The Fortress Appeal Decision is at http://www.sclqld.org.au/qjudgment/2009/QCA/282

Looks like McMurdo got it wrong on the Young Village Estates document and Fortress have the secured position.

 

[flatback]

Re: Octaviar MFS Premium Income Fund PIF

Interesting article from the NZ perspective.
Adviser: OPI cash hope lies in court
By ROELAND van den BERGH - The Dominion Post
Last updated 05:00 18/09/2009

Government-funded court action is the only hope investors in collapsed finance company OPI Pacific Finance have of recovering any of the remaining $200 million they are owed, investment adviser Chris Lee says.

OPI has been put in receivership by its trustee Perpetual Trust, ending a moratorium in place since May last year.

The move follows the court-ordered liquidation in July of OPI's Australian parent Octaviar.

At the time of the moratorium 12,000 investors were owed $314m, making it the third-largest finance company failure after Bridgecorp and Hanover.

OPI, formerly MFS Pacific Finance, was forced to default on repayments in January last year when Octaviar, previously MFS, withdrew financial support.

Debenture holders received 22.17 cents in the dollar when the moratorium was approved, leaving $200.1m owed to secured debenture holders and $56.7m to unsecured note holders, who have not been repaid anything.

Perpetual Trust head of corporate trust Matthew Lancaster said: "The trustee's opinion is that a receivership is now appropriate and in the best interests of OPI's investors."

OPI had a "put option" over Octaviar for the rest of the money owed. But Mr Lee said the "put option" was an unsecured guarantee and never had any value because Octaviar itself had negative shareholder funds.

New Zealand investors' money was lent to Octaviar with no more security "than a handshake", Mr Lee said.

However, a potentially multi-million-dollar settlement in favour of investors in Australia this week could provide a way for OPI investors to get more of their money back, Mr Lee said.

In an unrelated case, Australia's biggest financial planning group Professional Investment Services this week agreed to compensate 247 clients for alleged misleading and deceptive conduct in advising clients to invest A$393m in risky investment products.

The case was brought by the Australian Securities and Investment Commission, which was initially seeking A$23m in compensation for the investors.

"That might be a signal as to what should be happening here," Mr Lee said.

The Government could not repay investors, but it could fund the cost of seeking compensation from company directors, trustees or auditors if they had failed in their duty of care, Mr Lee said.

The Government would recover its costs from any settlement.


Blueboy1

Ah! we have another player, g/day blueboy, it seems we may have another alternative, for recovering some of our funds, you see lawry1dog every other day we see another avenue, and by the way you couldn't pretend to be as good as Great Dame, as many will fortell , HE was unique .Flatback

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Ah! we have another player, g/day blueboy, it seems we may have another alternative, for recovering some of our funds, you see lawry1dog every other day we see another avenue, and by the way you couldn't pretend to be as good as Great Dame, as many will fortell , HE was unique .Flatback

Bit unfair flatback, as you rightly say, he was unique, and nobody could replace Great Dame. I had several gentle "run ins" with him, and he has proved to be a lot wiser than me. Whoever is in touch with him, please give him my best wishes....John H

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Here are some links to commentary explaining the Fortress Appeal -

http://www.deacons.com.au/legal-services/banking-finance/legal-updates/legal-update.cfm?objid=7249

Octaviar decision is dead - or is it? - Diccon Loxton - Partner at Allens Arthur Robinson Boardroomradio.com Audio webcasts of investor presentations - Fri, 18 Sep 2009 16:00:00 +1000 - 16 hours, 38 minutes ago

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Some interesting figures:::::Gross Assets $869.4 million (unaudited as at 31 March 2008)
Loan owed to a third party bank $168.0 million (as at 31 March 2008)::::
As at the 30th June 2009 The value of the PIF's net tangible assets was $296.4 million with the debt having been repaid. Somewhere the PIF lost $277mill in value to repay $168 mill.

Because it is a bit boring on here at the moment here is something to read that found its way into my WC collection of trivia. Seems to have been discarded or put on hold when all those millions were handed to WC to save the PIF or is it still lurking out there somewhere? Seamisty

Islamic Investment –
The Opportunities in Australia ;;;;Kazbah Capital Limited;;;;Jenny Hutson, Managing Director
Wellington Capital Limited
5 March 2008 LINK;;;;;http://www.griffith.edu.au/__data/assets/pdf_file/0017/58310/Hutson.pdf

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Anybody interested in reading about Islamic Banking Principles can do so on the following link. Quite illuminating.

http://www.bankersonline.com/vendor_guru/edcomm/edcomm_mkt_100107.html

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

My guess is PTQ probably didn't put up much of a fight during this appeal. Maybe revelations during subsequent legal actions make it look increasingly likely that Fortress' attempt on 22 Jan 08 to secure the YVE money ($59M?) will be voided anyway.

Deloitte weren't that out of step on this one afterall. Still doesn't vindicate them from all of McMurdo's findings.

Can anyone show me where the Fortress fixed and floating charge is reported in the 30 June 2007 annual report (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00764882)? (Notification of the charge was filed at ASIC on 5/6 June 07).

Was it shifted off balance sheet under 'liabilities classified as held for sale'? Or is it reported under note 23? I.e. 'Bank loans - secured $254,344,000'. If so then there's no mention that the 'bank' was Fortress. Either way a diligent creditor had to go elsewhere to find that Fortress held the charge. Instead we were told important things like 20% of the MFS staff gave blood.

Then there's the Interim Report for 31 Dec 2007 (signed off of 28 April 2008) (http://asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00835917). Loads of text about events subsequent to the 31 Dec 07 balance date (pages of it actually) but absolutely no mention that the YVE (Fortress) gaurantee had been moved into the ambit of the charge. Then 'Note 8(d)' even goes so far as to state Fortress held a fixed and floating charge and that "this loan has been repaid in full". Now now, that's false isn't it? Aren't Fortress today still owed ~$19M under that charge? So how could a loan under the charge be repaid in full? How did the auditor KPMG miss that ~$19M 'slip up' in their 'review'?

Now that I've poked my head behind the veil of government and regulator spin about how good a job they're doing, all I see is a scattering of regulations that OCV managed to drive a $39M truck through while I was distracted by the fanfare of all that trumpet blowing. I don't think it was just me though? Didn't JH tell us at the forum that all creditors had equal standing?

So Justice Holmes. At para [51] you added "which should at least alert any prospective investor or creditor to the need for further enquiry as to what those liabilities might comprise". How were OCV creditors supposed to do that? And how were the existing creditors, as opposed to 'prospective' creditors, interests protected? Once signed up, the borrower's motivation to cooperate with the lender is, lets say, different. How were the existing creditors to police their risk positions and timely identify defaults? IMO the para [45] quote from the High Court in Wilde "the provisions are intended to protect persons who may become unsecured creditors" leans more towards protecting the position of existing creditors as opposed to "prospective" creditors.

The skills for "further enquiry as to what those liabilities might comprise" seems to have been beyond KPMG in their 'review' of the Dec 2007 Interim Fin Report. And KPMG were PAID to sniff out such info weren't they? What chance did us existing creditors have? I'm sorry but I can't see how Chapter 2K protected me as a creditor in this instance where the borrower appears to have been incompetant or rather adept at obfuscation.

 

[k.smith]

Re: Octaviar MFS Premium Income Fund PIF

"..............Now that I've poked my head behind the veil of government and regulator spin about how good a job they're doing, all I see is a scattering of regulations that OCV managed to drive a $39M truck through while I was distracted by the fanfare of all that trumpet blowing. I don't think it was just me though? Didn't JH tell us at the forum that all creditors had equal standing?......."

I am totally aghast to read that ASIC works with a system whereby they lump unitholders complaints together and then do what they call a "merged mailout", that is, they send the same letter to x?number of complaintants, and ****! ! ! matter resolved! ! !

There should be a big, massive push here by investors in these funds, we should band together and send the regulators and the government a strong message collectively...a "merged message" on behalf of all investors in these funds so adversely effected by the actions of these incestuous, self-interested **!!##

I have read somewhere that there are more than 100,000 of us...and that ASIC have received "file-drawers full of complaints". Isn't it time that the very urgent problem of the frozen funds was addressed?What is the point of the Corporations Act unless it is regulated? http://www.theaustralian.news.com.au/business/story/0,28124,26082922-36418,00.html

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I am totally aghast to read that ASIC works with a system whereby they lump unitholders complaints together and then do what they call a "merged mailout", that is, they send the same letter to x?number of complaintants, and ****! ! ! matter resolved! ! !

There should be a big, massive push here by investors in these funds, we should band together and send the regulators and the government a strong message collectively...a "merged message" on behalf of all investors in these funds so adversely effected by the actions of these incestuous, self-interested **!!##

I have read somewhere that there are more than 100,000 of us...and that ASIC have received "file-drawers full of complaints". Isn't it time that the very urgent problem of the frozen funds was addressed?What is the point of the Corporations Act unless it is regulated? http://www.theaustralian.news.com.au/business/story/0,28124,26082922-36418,00.html

k. smith I was just as aghast when I found out that my correspondence to Bernie Ripoll on the 26th Feb 2009 regarding a letter seeking support ( which I initiated) was placed in quarantee and never acknowledged until I followed up on the 8th July 2009 and sent the following:

'I was going to go to all the trouble of composing a submission for the The Parliamentary Joint Committee on Corporations and Financial Services on behalf of investors in the Wellington Capital Premium Income, but I am not sure it would be worth the time and effort involved.
In Feb 2009 I sent the following letter to 22 people. I had seven responses acknowledging having received my email , none from Mr Ripoll, and no further follow up from anyone. What difference will it make sending my same complaint to the Senate Enquiry? Will being in the media spotlight ensure some intervention? As a direct result of no help from the inadequate powers that be, individual investors have had to take the responsibility of instigating legal proceedings on their own behalf to seek answers, justice and hopefully financial compensation.

I sincerely hope there are some positive outcomes from the Senate Enquiry and it is not an ineffectual waste of individuals time and tax payer funds'.;;;

On the 15th July I received the following;;;;

Thank you for your email of 8th July 2009.



Our apologies for not getting back to you sooner. In relation to your email of 26 February 2009, it seems the email went into quarantine instead of coming through to our main email system.



Your email has been brought to Bernie’s attention also;;;;

The outcome was my original 'letter of complaint' was submitted to the Senate Enquiry.

Any wonder the majority of investors are apathetic and have absolutely no faith in govt representatives or so called regulatory bodies.


For some of us, that just makes us all the more determined to expose the inadequacies and total incompetence of those on tax payer funded gravy trains. I certainly will not be holding my breath waiting for any sort of outcome which will impact on our situation or deal with those responsible for our predicament. Seamisty

 

[k.smith]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty...

Ditto..

I have lodged two submissions to the Parliamentary Inquiry and have written to Asic on quite a few occasions(will have to check my filing cabinet for correct tally!) Result to date...one letter which I quickly discovered was one of Asic' "merged mailouts"...their term, not mine!

Result...one big ZERO..

I read this letter on the Storm actiongroup website tonight, and feel that there are so many unresolved wrongdoings out there, and that the lives of so many elderly people are in really dire straights.Where can they voice their concerns, if ASIC doesn't listen?
http://www.sicag.info/index_files/An open letter to banks.pdf

Like you and others in this forum and other forums, I feel compelled to keep chipping away as best I can....
seems to me that as taxpayers we have right of input, and I am sick of being ignored...

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

For a bit of nostalgic entertainment have a look at the Mayne Report vid of the 28 March 2008 EGM. (Warning - it might upset some viewers)

http://video.maynereport.com/

From what I've read the trigger was the stance of the No-Compromise-Lender Fortress. (Hmmm - How do I invest in Fortress?)

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Jenny hopes PIF won't be in the red
| September 25th, 2009

HEAVY discounting is paying off for the Sheraton Mirage, with occupancies well up on last year, but there is still no word on who has won the bidding war for the trophy asset.

The hotel property, part of the Raptis Group, is in the hands of receivers who have been taking their time sorting through a shortlist of potential buyers.

A deal for the Sheraton Mirage has been at least 12 months in the making, with bids for the property touted to be between $55 million and $80 million.

Anything less than $60 million would not be much good for second mortgagee, the Premium Income Fund.

Wellington Capital's Jenny Hutson, who controls the fund, says at this price there would be nothing left for PIF investors.

While Ms Hutson says she is still in the dark on when a deal will be struck for the Sheraton, she says there are signs that the property has seen the worst of the business cycle.

"We're very encouraged," she says of the Sheraton's rising occupancy which she attributes to improved consumer sentiment.

The big discounts also are helping, with some guests paying as little as $195 a night for a room, half the price of the Palazzo Versace across the road.
Source::Gold Coast Bulletin::http://www.goldcoast.com.au/article/2009/09/25/140801_gold-coast-business-bizzy-bits.html
Quote Jenny Hutson 'We're very encouraged," she says of the Sheraton's rising occupancy which she attributes to improved consumer sentiment.'
What an absolutely insulting, inane comment from JH!!!! The St Geotge Bank bank holds a 1st mortgage of $60mill and the current best offer is $55million after possibly knocking back an earlier offer of $70million 'The offers are said to have been pitched about $70 million, although Raptis Group, which paid $82 million for the
property in 2005, had been seeking offers of $80 million.'(GCB Mar, 2009):: and from another article 'It is understood well known Queensland property developer Don O'Rorke had been willing to pay about $80 million for the Gold Coast hotel, but two large Asian investors were also making offers.' (April7, 2009 http://www.theaustralian.news.com.au/business/story/0,28124,25299556-36418,00.html)

The receivers are going to be working in the best interest of the bank, not the PIF and still nothing from JH on the other outstanding Raptis 1st mortgage PIF loan of $32mill. You may be encouraged Jenny but I can't hear any cheering from anyone else!!!!! Seamisty

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, has this $32M loan to Raptis already been written off or is it still on our books. Is it part of the asset I queried in my post #4113:

"Of the $62.486M of 'Other financial assets', $26.877M is with OCV related entities LLA & Octaviar Causeway P DOF. Anyone know the nature of the other $35.609M? It represents 12% of the fund value; i.e. 4.7cents per unit. Any chance of us getting paid out by this asset?"

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, has this $32M loan to Raptis already been written off or is it still on our books. Is it part of the asset I queried in my post #4113:

"Of the $62.486M of 'Other financial assets', $26.877M is with OCV related entities LLA & Octaviar Causeway P DOF. Anyone know the nature of the other $35.609M? It represents 12% of the fund value; i.e. 4.7cents per unit. Any chance of us getting paid out by this asset?"

Duped I honestly don't know but I will hazzard a guess and say it is most likely still on our list of assets as money owed for two reasons:
1. to pump up the cent per unit value
2. so when we get paid 3 cents of our capital back the value of the outstanding Raptis loans ie $55mill will enable JH to take a larger management fee by including it

Or none of the above. Someone else might have a better idea. Seamisty

 

[Blueboy1]

Re: Octaviar MFS Premium Income Fund PIF

Another one bite's the dust!

Verdict due on extending Boston Finance moratorium
4:00AM Tuesday Sep 29, 2009
By Tamsyn Parker

Finance companies in freefall

* Court slams bankrupt property developer
* Golf buddies win out over advisers

Investors in one of the first finance companies to go into moratorium should know soon if it will be extended.

Boston Finance entered into a 20-month repayment plan in March last year promising to pay investors back all of their money as well as 9 per cent interest.

The moratorium was due to end on November 14 but seems likely to be extended after the firm's independent adviser KordaMentha warned the company was unlikely to meet its repayment schedule in the current market conditions.

Matthew Lancaster, a spokesman for Perpetual Trust, the trustee for the company, said it expected to give investors a "comprehensive" update in a couple of weeks.

Lancaster said he was waiting to get some certainty on the outcome of a number of events before talking to investors about "where things were at."

One of those events is likely to be a Blue Chip test court case in the High Court at Auckland.

According to its annual report Boston Finance loaned money for a number of Blue Chip apartments.

The judgment is expected to be released in the next few weeks.

Boston Finance went into moratorium several months before its sister company OPI Pacific Finance, both of which were ultimately owned by Australian investment company Octaviar.

OPI Pacific Finance was recently placed into receivership after Octaviar went liquidation. But Lancaster said Boston operated as a separate company and the fate of OPI was not linked to it.
Blueboy1

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Duped I honestly don't know but I will hazzard a guess and say it is most likely still on our list of assets as money owed for two reasons:
1. to pump up the cent per unit value
2. so when we get paid 3 cents of our capital back the value of the outstanding Raptis loans ie $55mill will enable JH to take a larger management fee by including it

Or none of the above. Someone else might have a better idea. Seamisty

This PIF unsecured 'loan' smells suspiciously to me like it was likely another of the related party transactions. I understand Raptis bought the Sheraton Mirage from the MFS Sheraton Mirage Trust. (Less than a year after the Trust bought it in the first place) I could speculate that the unsecured PIF 'loan' could have been used as a deal sweetener for the Trust to get a good price from Raptis. MFS got their sale and/or management rights and could then plump up their books.

Please anyone, correct me if I'm wrong. I'll be mighty displeased (to say the least) if these Raptis 'loans' plump up WC fee and then WC write them down/off.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

This PIF unsecured 'loan' smells suspiciously to me like it was likely another of the related party transactions. I understand Raptis bought the Sheraton Mirage from the MFS Sheraton Mirage Trust. (Less than a year after the Trust bought it in the first place) I could speculate that the unsecured PIF 'loan' could have been used as a deal sweetener for the Trust to get a good price from Raptis. MFS got their sale and/or management rights and could then plump up their books.

Please anyone, correct me if I'm wrong. I'll be mighty displeased (to say the least) if these Raptis 'loans' plump up WC fee and then WC write them down/off.

The Sheraton was jointly owned by the Ray Group 50%, MFS Limited 33.75% and 'other investors' 16.25%. The other investors could have been the PIF in all likelihood hence the 'outstanding loan' to the PIF. Also of interest one of the potential buyers for the Sheraton is/was Don O'Rorke. Don O'Rorke was the former managing director
of the 'struggling Trinity Property Fund' of which he is/was the 2nd largest share holder. Brett Heading (named as Jenny Hutsons husband in the same media article where it states :"Jenny Hutson, the highly intelligent and hard-nosed businesswoman who is rapidly earning a reputation as one of the shrewdest deal brokers in corporate Australia"( source www.wellcap.com.au/.../18-10-2007 - Millions of ways to raise a family )
is the new chairman of Trinity. The links and connections are very interesting and worth some further research IMO. Seamisty

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

The Sheraton was jointly owned by the Ray Group 50%, MFS Limited 33.75% and 'other investors' 16.25%. ...

Yep. That's what I read. They were the ownership ratios for MFS Sheraton Mirage Trust. Hope I didn't mislead.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

I'll post this one under the heading "SPOT THE B S"

National Stock Exchange to list frozen funds
Anthony Klan | October 01, 2009
Article from: The Australian

THE nation's second largest share trading platform, the National Stock Exchange, is preparing to list dozens of frozen mortgage and property funds - holding hundreds of millions of dollars - in a bid to return funds to desperate investors.

NSX chairman Steven Pritchard said the exchange was negotiating with several property and income fund managers representing "more than a dozen funds", which were seeking to list their frozen funds in a bid to provide liquidity to investors.

"Many of these frozen mortgage and property funds hold good-quality assets and I have no doubt many investors in those funds will receive all their capital back as well as their distributions," Mr Pritchard said.

"This is about providing a liquidity mechanism for investors who want to exit the funds."

In October last year more than 30 funds, holding more than $25 billion on behalf of 250,000 investors, froze redemption facilities after a run on non-bank deposits.

That run on mortgage and property funds was prompted by a federal government move to guarantee bank deposits amid the turmoil in financial markets.

Mr Pritchard said listing on the NSX, which operated similarly to the Australian Stock Exchange but typically attracted far smaller companies and lower levels of transactions, would help improve liquidity.

"With the inability of investors to currently redeem their investments in the many mortgage and property funds which have suspended redemptions, NSX Ltd and its subsidiary exchanges are in an ideal position to list the securities of those funds," Mr Pritchard said.

He said the frozen Octaviar Premium Income Fund - which had raised $750m from investors and listed on the NSX late last year after the collapse of parent company MFS Ltd - was an example of how frozen funds could trade.

Units in the fund began trading at 11c on listing with the NSX and are now selling for 28c, although they are relatively thinly traded.

Consumer groups yesterday expressed concerns cash-strapped investors desperate to access funds might sell their frozen funds for much less than they were worth.

"The danger here is desperate investors might be forced into selling their investments for much less than they're worth because they can't afford to hold out until funds are unfrozen," consumer advocate Denise Brailey said.

"Investors looking to get out of frozen investments need to be very careful about the price they seek to sell at.

"Just because some funds are frozen now does not necessarily mean they are worth far less than they were before they were frozen," she said.

One of those aggrieved investors holding frozen funds is Roy Abrims, the former chief executive of photographic chain Rabbit Photo, who personally has about $540,000 invested in the AMP Capital Enhanced Yield Fund which he has been unable to withdraw.

Mr Abrims said he would rather the AMP Capital Enhanced Yield Fund move to unfreeze redemptions than list on an exchange.

The AMP Capital Enhanced Yield Fund is not understood to be considering listing on any exchange.
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