BCS - BrisConnections Unit Trusts

Enzyme · 17 December 2008

Re: Brisconnections shareholders - financial ruin

drsmith said:
If the lack of a market for the shares is listed as a risk then no.

It isn't listed as a risk, which is why I'm speculating shareholders could use it as a defence.

drsmith said:
Further to my comment above, everyone holding this should consider placing a sell order for 0.1c. It's a long shot but if Macquarie can see an opportunity to mop most of them up for a token amount you never know. It might be the easiest way out for them too.

At one stage there was about a third of all stock on issue listed for sale. Mostly at $0.001.

I think all eyes do need to look to the underwriters, because they are the ones who will eventually take ownership of all those toxic shares. The question being, will they take on all the shares before or after the mum & dads have been bankrupted.

As I've been browsing the PDS tonight, for reference the underwriters sharing the exposure are as follows:

– Macquarie Capital Advisers: 41.7%;
– Deutsche Bank: 41.7%;
– Credit Suisse (Australia): 8.3%; and
– J.P. Morgan Australia: 8.3%.

drsmith · 17 December 2008

Re: Brisconnections shareholders - financial ruin

Enzyme said:
It isn't listed as a risk, which is why I'm speculating shareholders could use it as a defence.

Is there any (even a generic comment) about share market risk ?

cuttlefish · 17 December 2008

Re: Brisconnections shareholders - financial ruin

Enzyme said:
I just checked. They do have voting rights.

If brisconnections were coming after me and my life's savings I'd seriously consider launching a pre-emptive strike against them and their underwriters. For somewhere between $100k and $300k you could take over the company and wind it up. If you were lucky you might just manage to avoid bankruptcy. If not then at least you could have the satisfaction of causing maximum damage to the company and the underwriters that bankrupted you.

Interesting thought - would certainly be a ballsy approach - would require a lot of planning and analysis in conjunction with corporate lawyers, accountants etc. - and the other risk is not managing to get control after launching the 'attack' and just ending up with even more debt.

But ... if all the BCS shareholders all got together, formed a Pty Ltd, Funded it pro-rata based on their current shareholdings with enough funds (say $500k) to cover the on-market purchase of stock as well as to cover some legal fee's, they could then run the on-market purchase of the stock that is there on the offer - which would mean a perfectly legal exit for all of the individuals concerned - an on-market transaction. Then they could attempt, via the safety of pty ltd vehicle, to use their voting rights to call an EGM, throw out the current board, put their own board in place, and wind up BCS. (not sure if any of this is remotely possible - this is just thoughts and idle speculation).

The ironic thing is the underwriters and other corporate shareholders may possibly even be supportive of such a move ... who knows ... I mean I just can't imagine Macquarie and the other underwriters are thrilled with the prospect of having to pay for and own these as a result of the underwriting agreement - otherwise why would they have been selling them on-market for a pittance for the past few months.

Enzyme · 17 December 2008

Re: Brisconnections shareholders - financial ruin

drsmith said:
Is there any (even a generic comment) about share market risk ?

There is lots about share market risk in general, and factors that could affect the share price. But it always assume there is a share price, and shareholders could sell. But as we know, shareholders can't give the stuff away, and there is nothing in there about that.

Enzyme · 17 December 2008

Re: Brisconnections shareholders - financial ruin

cuttlefish said:
Interesting thought - would certainly be a ballsy approach - would require a lot of planning and analysis in conjunction with corporate lawyers, accountants etc. - and the other risk is not managing to get control after launching the 'attack' and just ending up with even more debt.

But ... if all the BCS shareholders all got together, formed a Pty Ltd, Funded it pro-rata based on their current shareholdings with enough funds (say $500k) to cover the on-market purchase of stock as well as to cover some legal fee's, they could then run the on-market purchase of the stock that is there on the offer - which would mean a perfectly legal exit for all of the individuals concerned - an on-market transaction. Then they could attempt, via the safety of pty ltd vehicle, to use their voting rights to call an EGM, throw out the current board, put their own board in place, and wind up BCS. (not sure if any of this is remotely possible - this is just thoughts and idle speculation).

The ironic thing is the underwriters and other corporate shareholders may possibly even be supportive of such a move ... who knows ... I mean I just can't imagine Macquarie and the other underwriters are thrilled with the prospect of having to pay for and own these as a result of the underwriting agreement - otherwise why would they have been selling them on-market for a pittance for the past few months.

You seem to know a lot more about how it would work than I do. I have no idea if it would be possible to wind up the company, but I'd give it a go. I was more just thinking in general terms that there is no difference in being bankrupted for $3 million or $300 million. If I was going down then I'd take as many down of them with me as I could.

drsmith · 17 December 2008

Re: Brisconnections shareholders - financial ruin

Enzyme said:
There is lots about share market risk in general, and factors that could affect the share price. But it always assume there is a share price, and shareholders could sell. But as we know, shareholders can't give the stuff away, and there is nothing in there about that.

I note the following under section 6.8: General Risks.

Changes in the general level of prices on local and
international share markets and general investor sentiment
in these markets

A Lawyer on behalf of the underwriters could argue that the lack of a market for the shares is a product of general investor sentiment. This may or may not be a successful argument but it illustrates the kind of argument shareholders would be up against.

lesm · 18 December 2008

Re: Brisconnections shareholders - financial ruin

rocket12 said:
Someone just bought 100,000 of them... for 100 bucks they now have a 2 hundred thousand liablity...

According to the 'Course of Sales' there were actually three buy trades of 71,000, 20,000 and 9,000 shares respectively.

lesm · 18 December 2008

Re: Brisconnections shareholders - financial ruin

Enzyme said:
I've been looking at the PDS, and wonder if I might have found an angle for the lawyers to pursue:

The BrisConnections PDS does not adequatly inform investors about the potential risks in investing in the company. As Briscon have misinformed investors through the PDS, they can't then use the provisions described in that PDS to take debt recovery action against shareholders.

Now the PDS does talk about risk. There are five pages of it listing bad things that could happen that would adversely affect the share price. But the PDS always assumes that there is a share price. That is where it fails. Events have shown that the is no share price for Brisconnections shares. Most shareholders would gladly give their shares away, or pay to get rid of them. Brisconnections represents a failure of the market for investors, and the PDS did not warn of this possible risk.

Does anyone think that this line of argument has a future?

Not really. There is actually a share price of 0.001c, an abundance of sellers and a limited number of (or zero) buyers.

Events have certainly had an adverse affect on the share price. In reality, why is this any different to any other stock that becomes illiquid and market sentiment has become adverse?

Has the company itself failed or showed any signs of failing?

What control does this or any company have over general market risk or the market itself?

thermalmonster · 18 December 2008

Re: Brisconnections shareholders - financial ruin

What do you think is likely to happen The day after the $1.00 is paid

Would the shares be worth $1.001
Perhaps then you could sell them for 0.98 or somthing.
Thats if you have the cash to front the installment.
What if you dont pay on the exact day, but sell your shares the day after when they are worth somthing???
Or will they block you from selling them after the Call up day.

skc · 18 December 2008

Re: Brisconnections shareholders - financial ruin

thermalmonster said:
What do you think is likely to happen The day after the $1.00 is paid

Would the shares be worth $1.001
Perhaps then you could sell them for 0.98 or somthing.
Thats if you have the cash to front the installment.
What if you dont pay on the exact day, but sell your shares the day after when they are worth somthing???
Or will they block you from selling them after the Call up day.

The share would not worth $1.001 after the second installment is paid. Chances are, it will still has ask of $0.001 again with no buyers.

The shares are probably worth ~20-30% of the $3 total price, or ~$0.6-0.9. Not a lot of science behind the number, but just base it on where RCY (another Brisbane toll road under construction with similar structure) is trading.

There may be some marketable price after the 3rd installment is paid, however. So those who think they owe $2 per share would probably get some back in equity value eventually.

Bushie · 18 December 2008

Re: Brisconnections shareholders - financial ruin

I have followed the threads from Rocket 12 & Cuttlefish, I too, am caught up in the 'debt trap' of Brisconnections.
We are terrified of the impending threats of being 'pursued' to pay a debt that is so unreal that I feel we are living a nightmare. Thankfully ASIC & the Australian Shareholders Association have gone in to bat for us 'little people'. I have also gone to our State Member of Parliament, & our Federal Member of Parliament, they are now becoming aware of the problem. It may be suggested that anyone else (Rocket 12) who is in the same bind do the same thing. I agree that together we have a louder voice than if we are fighting this individually. The thought of becoming homeless & bankrupt in this economic climate is horrific, all through a click of a mouse, with no warnings out there in Google Finance, the news links from that website, Netwealth where I looked, & to add insult to injury, the Brisconnections website was very difficult to download, it froze my computer on more than one occasion. How can one access the information that is supposed to be 'out there' when the page won't load up?

rocket12 · 18 December 2008

Re: Brisconnections shareholders - financial ruin

Bushie said:
I have followed the threads from Rocket 12 & Cuttlefish, I too, am caught up in the 'debt trap' of Brisconnections.
We are terrified of the impending threats of being 'pursued' to pay a debt that is so unreal that I feel we are living a nightmare. Thankfully ASIC & the Australian Shareholders Association have gone in to bat for us 'little people'. I have also gone to our State Member of Parliament, & our Federal Member of Parliament, they are now becoming aware of the problem. It may be suggested that anyone else (Rocket 12) who is in the same bind do the same thing. I agree that together we have a louder voice than if we are fighting this individually. The thought of becoming homeless & bankrupt in this economic climate is horrific, all through a click of a mouse, with no warnings out there in Google Finance, the news links from that website, Netwealth where I looked, & to add insult to injury, the Brisconnections website was very difficult to download, it froze my computer on more than one occasion. How can one access the information that is supposed to be 'out there' when the page won't load up?

Keep your chin up Bushie, I am confident this will work out. Have you joined the ASA ?? they are doing a great job with this.

In the new year we will have to get as many of us together to join a class action. There is definately a case for material non-disclosure. I have talked to many lawers, but dont wish to engage anyone on my own as I dont really have anything to lose out of this as I have no money or assets. But I would love to be part of a legal fight with as many of us as possible.

There are already four of us in this thread that are in the same boat. I am in Victoria, which state are you in??

Bushie · 18 December 2008

Re: Brisconnections shareholders - financial ruin

Hi Rocket12, we are in country Qld. Yes I have been in contact with Stuart from Aust Shareholders Assoc. he has kept us sort of in the loop. No newspapers covering anything out here, it seems so surreal except for the heart palpitations, the shakes, the tears, the gut pain & the FEAR. We currently stand to lose our daughters inheritance & end up homeless, (Our only decent asset is a half built house out in the bush, but its is our labour of love & our banks.) we are quite frankly terrified. All we were trying to do was create a dividend income stream for our retirement years, with a purchase of 'cheap' shares in a tunnel project in Bris. We didn't know anything about contributing shares, didn't see anything wherever we looked, had only dabbled this year in small caps, in small parcels of $500 & $1000 whenever we could afford it. I have noticed a lot of hard responses from some in this thread, I guess they are feeling quite comfortable & superior. I wonder for a moment if they know the pain of a mistake that took a minute to do, but could destroy their lives forever? Every day my mind wanders to "what will we do?" "Where will we go?"
"how will we live?" " How long can we stay here?" This whole debt trap is WRONG - WRONG - WRONG. It can't be real.

thermalmonster · 18 December 2008

Re: Brisconnections shareholders - financial ruin

I think we all need to stand united in this.
There are a few of us at work also that wish to join the "action Group"
We cant all be wrong
I spoke to the asac yesterday of my plight and they are looking at upping the publicity on this after christmas.
I would like to see an action Plan of what we are going to do and work on it.
Lets get in touch with each other via e-mail and work out our strategy.
Are we in?

cuttlefish · 18 December 2008

Re: Brisconnections shareholders - financial ruin

Bushie said:
I have followed the threads from Rocket 12 & Cuttlefish, I too, am caught up in the 'debt trap' of Brisconnections.

Just in case there's any confusion - I don't hold BCSCA - but I do strongly feel that the situation was an easy trap to fall into and that a risky product like this should have better controls around it, which is why I've been posting in the thread a lot.

I have tried to imagine how I'd feel if I were facing the situation that the shareholders do face and it is a very scary thought and I can understand bushies comment about the situation being surreal.

It still astounds me that this land mine is sitting there on the market, not suspended, waiting for an unassuming victim to buy another $500 of stock and assume $1 miillion dollars worth of nightmare.

Why this stock hasn't been suspended is beyond me.

I just hope that everyone in the situation of owning the stock doesn't blame themselves too heavily and manages to cope with the situation they are in.

I'd also hope that the companies involved (BCS, the underwriters, the ASX) show some commonsense and compassion, and work to find a practical solution that doesn't punish people disproportionately for such a simple oversight.

sails · 18 December 2008

Re: Brisconnections shareholders - financial ruin

Bushie said:
... I have noticed a lot of hard responses from some in this thread, I guess they are feeling quite comfortable & superior. I wonder for a moment if they know the pain of a mistake that took a minute to do, but could destroy their lives forever? ....

Hey Bushie - there will always be differing opinions on a forum like this - that's what it's all about. But there are some of us who sincerely hope for a good outcome for those trapped in this extraordinary situation.

rocket12 · 18 December 2008

Re: Brisconnections shareholders - financial ruin

thermalmonster said:
I think we all need to stand united in this.
There are a few of us at work also that wish to join the "action Group"
We cant all be wrong
I spoke to the asac yesterday of my plight and they are looking at upping the publicity on this after christmas.
I would like to see an action Plan of what we are going to do and work on it.
Lets get in touch with each other via e-mail and work out our strategy.
Are we in?

I have private messaged both you and Bushie, so you both have my email addy...

Prospector · 18 December 2008

Re: Brisconnections shareholders - financial ruin

I have been sharing this thread with my family in absolute horror about how easily people have become enmeshed in this. And sometimes I think that there but for the grace of god go I!. Not that he/she delivers me any favours, it is just the meaning of the saying. My fervent wish for all of you who are trapped at the moment is that come the New Year, there will be a good solution for you. I think there will be, but I really do feel for you while things get themselves sorted. Ignore those who are not offering you support, I am a great believer in Karma. All the best!

ROE · 18 December 2008

Re: Brisconnections shareholders - financial ruin

who is here facing bankruptcy due to this scenario.

I say we all ASF if you willing can buy small parcel of these guys and help them out...and their families.

say someone with 500,000 shares we can each take a thousand each
and cope up the the installment...and that would be our xmas present to them.

say if we have 1000 taker then it's only 500 shares each and it's a $1000 bucks to help some desperate family out.

cuttlefish · 18 December 2008

Re: Brisconnections shareholders - financial ruin

ROE said:
who is here facing bankruptcy due to this scenario.

I say we all ASF if you willing can buy small parcel of these guys and help them out...and their families.

say someone with 500,000 shares we can each take a thousand each
and cope up the the installment...and that would be our xmas present to them.

say if we have 1000 taker then it's only 500 shares each and it's a $1000 bucks to help some desperate family out.

I like the sentiment involved - but be careful with your numbers there.

1000 takers will only fund 500,000 shares installment payments. Also be careful or you might end up confusing someone who will buy a $500 parcel on market and end up with $1,000,000 (one million$$$) debt.

If we base it around the 100 million shares in the sell queue - the amount that would have to be raised to bail all the shareholders out is $200 million. That is a lot of money for a forum to raise, and all of it would go to BCS.

Its a great idea but its not practical because the numbers are too large.

If there are 1000 users on ASF that participate it would amount to $200,000 each - and that money would go to BCS.

BCS - BrisConnections Unit Trusts

Enzyme

drsmith

cuttlefish

Enzyme

Enzyme

drsmith

lesm

lesm

thermalmonster

skc

Goldmember

Bushie

rocket12

Bushie

thermalmonster

cuttlefish

sails

rocket12

Prospector

Not a scaredy cat anymore

ROE

cuttlefish

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