BCS - BrisConnections Unit Trusts

[Sir Osisofliver]

Re: Brisconnections shareholders - financial ruin

Thanks for the heads up Sir Osisofliver but I have a few questions:

1. Don't BrisC risk saving the same problem if they take this route. ie, what if they sell into the market and end up selling to more mums and dads at 10c or below. They'll just have the same problem when the 3rd and final instalment needs to be payed??

2. Has this course of action been taken before with similar situations in the past?

1) BrisC don't risk anything by taking this route. They go after the shareholder for any unpaid amount (that is, YOU) and if you can't pay the difference they can then go legitimately to Macquarie bank and say... Underwrite the rest please we dd what we could. If they do force the shares to a low price, who do you think will buy it? Hint it'll be the same guys that sold it off when it was 60 cents, because now they can buy for ten cents a security that has $2.00 of value put into it. When the third instalment wanders around they will wash rinse and repeat.

2) no it has never happened before that there is no market in the pre instalment shares... this is a new situation...and my take on the most likely way this will play out.

 

[joeyjoejoe]

Re: Brisconnections shareholders - financial ruin

OK, anyone tempted to buy a few of these at these prices ?

I mean it's a huge fiasco and embarrassment for the company. Those who can't pay their outstanding committments will surely forfeit their shares, but not a lot more then that will happen I don't think (may be a bit of company hot air in the interim to scare a few in to meeting committments if at all possible.This is more to keep an image up then anything). But after that, the company will want and need to create some sort of value for those who do pay up. They are going to get the money from the underwriters anyway who would of conducted some sort of due diligence on the project before committing.

I'm tempted to buy a 1000. Surely the company will want to see the value of the first installment go back up at least a bit. It was a fire sale to get out. There must be some value in this project surely. I am looking at getting some work for my own company on the project and from what I can work out, it's business as usual at Brisconnect. they are going to build these roads, and at some point they are going to be worth something.

Any thoughts....?

why buy them now when the price wont move until april and you can most likely still buy them for 0.001 after april with only one installment to pay..

this is being realistic.. although for everybody on here I HOPE that the future is more positive. what your saying has merit but your timing is off..... if you think the project has merit why not buy into in 2010 when all this is behind everybody

(as per the advice from point 1)

 

[Sir Osisofliver]

Re: Brisconnections shareholders - financial ruin

Sir O, in your opinion would it make more sense for Maqb or another big institution to accept a transfer of all our shares, cleaning up the share registry, turning Brisc into a tightly held stock and ensuring they dont have this same nightmare in 2010.

No - there is no incentive for them to do so...why buy now what you can pick up at a later date in a fire sale?

EG Why buy now when there is two dollars to pay, when there is a good chance that you will be able to buy the thing at 60 cents (with $3 put into it) in 2010?

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Bushie, Rocket, Thermal etc. - what steps have been taken so far in relation to this?

Has anyone engaged or spoken to a lawyer/barrister well versed in corporate/contract law? Also I've seen Rocket mention the ASA - have they started to put together a list of people affected - are they helping to facilitate any action?

What does ASIC say about the whole thing? Also has anyone been in touch with their local federal member (and state member if from QLD)?

It might also be worth trying to engage a PR company or speak to some journalists and see if any are interested in running the story. Based on some of the things I've seen from looking through the announcements I would have thought there would be a variety of angles for a journalist to explore.

Similarly from a legal perspective I would expect the right sort of lawyer/barrister would see some different potential avenues to explore as well.


One thing of interest in that letter you mention bushie (I found it on the asx site) is that the letter mentions a 6 month period they are required to pursue the funds for - maybe by bringing an action to contest the legality of the contract it might be possible to stall any creditors/debt collection process long enough for this period to expire? (I'm not a lawyer of course, these are just ideas, none of them may have merit).

It would also be worthwhile speaking to a bankruptcy lawyer because they may be able to advise of legal means to protect assets. Also when does the liability actually get incurred? It is possible the liability may not actually exist until the record date has passed - in which case it may actually be legal to transfer your assets to a trusted party prior to that date, or transfer the shares prior to that date without repercussions - again I have no idea, I'm not a lawyer - but I'd be pursuing anything and everything were I in the situation.

For example you don't want to find out after the fact that you should have sent a letter or commenced some type of legal action prior to the record date that could have protected yourself. There may be things from a legal perspective that can be done prior to the record date or the call notice date that can't be pursued after that date.

Also if you can get some shareholders together you might be able to pool funds for a good barrister/lawyer - and you may also possibly be able to get a meeting facilitated between yourselves and BCS and/or MQG to try to work out a compromise thats acceptable etc.

You've probably thought of most of these things and a million more but just in case I thought it doesn't hurt to mention them.

 

[lesm]

Re: Brisconnections shareholders - financial ruin

Bushie, Rocket, Thermal etc. - what steps have been taken so far in relation to this?

Similarly from a legal perspective I would expect the right sort of lawyer/barrister would see some different potential avenues to explore as well.

Get the best legal advice you can afford individually or collectively, if you wish to pursue this route.

One thing of interest in that letter you mention bushie (I found it on the asx site) is that the letter mentions a 6 month period they are required to pursue the funds for - maybe by bringing an action to contest the legality of the contract it might be possible to stall any creditors/debt collection process long enough for this period to expire? (I'm not a lawyer of course, these are just ideas, none of them may have merit).

What you will most likely see is that the clock will stop until the contestation is resolved and will restart once the matter is finalised. You may or may not need an injunction issued as part of this contestation to prevent BCS taking any action, while the matter is being scheduled for hearing. If required, this will ensure the clock is stopped.

Again, please seek legal advice.

You are overlooking that if BCS pursue all reasonable action to recover the outstanding/owed funds that the Underwriter has/retains the right to pursue further debt collection activities, after it has funded the shortfall.

It would also be worthwhile speaking to a bankruptcy lawyer because they may be able to advise of legal means to protect assets. Also when does the liability actually get incurred? It is possible the liability may not actually exist until the record date has passed - in which case it may actually be legal to transfer your assets to a trusted party prior to that date, or transfer the shares prior to that date without repercussions - again I have no idea, I'm not a lawyer - but I'd be pursuing anything and everything were I in the situation.

The liability is effectively incurred by the holders of these shares on the record date.

Also if you can get some shareholders together you might be able to pool funds for a good barrister/lawyer - and you may also possibly be able to get a meeting facilitated between yourselves and BCS and/or MQG to try to work out a compromise thats acceptable etc.

Think a number of the people involved have already been discussing this option (class/joint action).

A mediation based approach, as suggested in the quote above, would be more cost effective than going to court and possibly less stressful.

Good luck.

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

Bushie requested these files to be upoaded ---- had to be converted due to size restrictions --- hope they are readable

two more to follow ---

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

last two
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[Cartman]

Re: Brisconnections shareholders - financial ruin

sorry page 5 got chopped ----- again ----

 

[Julia]

Re: Brisconnections shareholders - financial ruin

Hopefully I've stimulated you into thinking about what you might be able to do to lessen your exposure.

Good Luck

Sir O

Sir O, thanks for your comments. I appreciate that you can't actually offer advice, but I suspect that the people affected here, especially Bushie, are probably too upset and stressed to easily follow the advice in your last sentence.
Can you offer them some clues as to anything they may legitimately do at this stage?

So that we can get back on track again I am attempting to upload a 6 page 'fact sheet' that we received from BCS dated 9th Dec outlining exactly what they intend to do to us & its gruesome path. This is so wrong - it sounds like it has been choriographed well in advance.

Bushie, it will indeed have been 'choreographed in advance'. In taking the project to the market every contingency will have been considered, as you would expect.

I appreciate that in your situation it's immensely difficult to look at the situation objectively, but if you were able to, then I'd guess you'd find it difficult to come up with a different scenario from the point of view of Brisconnections and the underwriters. The project is going ahead, apparently successfully, and the funding for its next stages has to come from somewhere.

Bushie, Rocket, Thermal etc. - what steps have been taken so far in relation to this?

Has anyone engaged or spoken to a lawyer/barrister well versed in corporate/contract law? Also I've seen Rocket mention the ASA - have they started to put together a list of people affected - are they helping to facilitate any action?

What does ASIC say about the whole thing? Also has anyone been in touch with their local federal member (and state member if from QLD)?

Yes, I've also been hoping to hear from some of the affected people what legal advice they have received.

It might also be worth trying to engage a PR company or speak to some journalists and see if any are interested in running the story. Based on some of the things I've seen from looking through the announcements I would have thought there would be a variety of angles for a journalist to explore.

I have earlier today sent a synopsis to a Courier Mail journalist with whom I've had prior contact on another matter with the suggestion that she look into doing a detailed story on this. The 7.30 Report have already done this some weeks ago.

Similarly from a legal perspective I would expect the right sort of lawyer/barrister would see some different potential avenues to explore as well.

I'd be interested to know if there is in fact anything available in a legal sense.
I'd have thought Macquarie et al would have been pretty sure to have had all the appropriate legal rulers run over it before it went out to the market.

One thing of interest in that letter you mention bushie (I found it on the asx site) is that the letter mentions a 6 month period they are required to pursue the funds for - maybe by bringing an action to contest the legality of the contract it might be possible to stall any creditors/debt collection process long enough for this period to expire? (I'm not a lawyer of course, these are just ideas, none of them may have merit).

It would also be worthwhile speaking to a bankruptcy lawyer because they may be able to advise of legal means to protect assets. Also when does the liability actually get incurred? It is possible the liability may not actually exist until the record date has passed - in which case it may actually be legal to transfer your assets to a trusted party prior to that date, or transfer the shares prior to that date without repercussions - again I have no idea, I'm not a lawyer - but I'd be pursuing anything and everything were I in the situation.

For example you don't want to find out after the fact that you should have sent a letter or commenced some type of legal action prior to the record date that could have protected yourself. There may be things from a legal perspective that can be done prior to the record date or the call notice date that can't be pursued after that date.

Also if you can get some shareholders together you might be able to pool funds for a good barrister/lawyer - and you may also possibly be able to get a meeting facilitated between yourselves and BCS and/or MQG to try to work out a compromise thats acceptable etc.

You've probably thought of most of these things and a million more but just in case I thought it doesn't hurt to mention them.

All good points, Cuttlefish. What does your legal adviser say about all the above Rocket, Thermalmonster, Bushie and anyone else who is involved?
If you don't have answers to the points Cuttlefish has raised, I'd suggest you get on with getting them as quickly as possible.
Dealing with such as Macquarie is not for amateurs or the ill informed.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

The liability is effectively incurred by the holders of these shares on the record date.

Although it becomes payable on that date and remains with whoever held at the record date, thinking about it more, I suspect from a legal/accounting perspective that rather than the liability being 'created' on the record date, the legal liability exists already and is attached to the security and transferred with it up to that date. It is effectively detached from the security after the record date (and remains with the registered holder of the securities on the record date).

btw lesm, in case you haven't seen my earlier posts - I'm not a holder of these - I've just taken an interest in the situation because it seems pretty harsh for those that did get caught up in it.

I've also been a bit suprised at some of the things that turned up when I read through the BCS announcements.

 

[Bushie]

Re: Brisconnections shareholders - financial ruin

Bushie, Rocket, Thermal etc. - what steps have been taken so far in relation to this?

Has anyone engaged or spoken to a lawyer/barrister well versed in corporate/contract law? Also I've seen Rocket mention the ASA - have they started to put together a list of people affected - are they helping to facilitate any action?

What does ASIC say about the whole thing? Also has anyone been in touch with their local federal member (and state member if from QLD)?

It might also be worth trying to engage a PR company or speak to some journalists and see if any are interested in running the story. Based on some of the things I've seen from looking through the announcements I would have thought there would be a variety of angles for a journalist to explore.

Similarly from a legal perspective I would expect the right sort of lawyer/barrister would see some different potential avenues to explore as well.


One thing of interest in that letter you mention bushie (I found it on the asx site) is that the letter mentions a 6 month period they are required to pursue the funds for - maybe by bringing an action to contest the legality of the contract it might be possible to stall any creditors/debt collection process long enough for this period to expire? (I'm not a lawyer of course, these are just ideas, none of them may have merit).

It would also be worthwhile speaking to a bankruptcy lawyer because they may be able to advise of legal means to protect assets. Also when does the liability actually get incurred? It is possible the liability may not actually exist until the record date has passed - in which case it may actually be legal to transfer your assets to a trusted party prior to that date, or transfer the shares prior to that date without repercussions - again I have no idea, I'm not a lawyer - but I'd be pursuing anything and everything were I in the situation.

For example you don't want to find out after the fact that you should have sent a letter or commenced some type of legal action prior to the record date that could have protected yourself. There may be things from a legal perspective that can be done prior to the record date or the call notice date that can't be pursued after that date.

Also if you can get some shareholders together you might be able to pool funds for a good barrister/lawyer - and you may also possibly be able to get a meeting facilitated between yourselves and BCS and/or MQG to try to work out a compromise thats acceptable etc.

You've probably thought of most of these things and a million more but just in case I thought it doesn't hurt to mention them.

Hi Cuttlefish, yes, we are all pursuing different avenues. Rocket 12 is busy sussing out lawyers, I have a complaint lodged with ASIC, we are all in touch with Australian Shareholders Association who is advocating on our behalf to all parties on the other side, I have made contact with my local member for Qld, & Federal Member, have had 2 visits to lawyers, & 1 to my accountant.
Regarding the media, ASA is cautious in this area at present as they are hoping to resolve this mess without going hugely & embarrassingly public. As Trevor Rowe of Brisconnect states, the integrity of the project is important & if we publicly damn them, what hope will we have of fair play? I would much prefer that it be resolved in a quiet & calm manner rather than be a tv target for 'idiot of the month'. As you all know from this thread, until the details get ground about out in the open, many will have a poor view of those caught up in the trap.
I really appreciate the thought that went into your response, thank you for airing all of these directions, any & all suggestions are being explored for legality or plausability. Desparation breeds inventiveness & we need all your heads to do battle with this. Thanks again

 

[lesm]

Re: Brisconnections shareholders - financial ruin

Although it becomes payable on that date and remains with whoever held at the record date, thinking about it more, I suspect from a legal/accounting perspective that rather than the liability being 'created' on the record date, the legal liability exists already and is attached to the security and transferred with it up to that date. It is effectively detached from the security after the record date (and remains with the registered holder of the securities on the record date).

btw lesm, in case you haven't seen my earlier posts - I'm not a holder of these - I've just taken an interest in the situation because it seems pretty harsh for those that did get caught up in it.

I've also been a bit suprised at some of the things that turned up when I read through the BCS announcements.

Correct, the liability remains with the party who was the registered holder on the relevant date. After this date, if the shares are sold, the liability will not be transferred.

Am aware that you are not a holder, but trying to help these people out.

While some things in the announcements may be surprising or appear to be, it would depend upon whether they are material to the situation or not.

While it may be a harsh outcome, this itself does not necessarily render the contract unenforceable under common law.

The involved parties really do need proper legal advice on this, as to their legal position and the options available to them.

 

[Julia]

Re: Brisconnections shareholders - financial ruin

Bushie, can you outline the nature of the legal advice you received?

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

From converstions with Rocket it appears we have a couple of possible avenues.
Without speaking to Rocket first I am not going to publicly disclose this delicate info, without aproval of the others.
I will however PM Julia & Cuttlefish since they have been very helpful and try and keep you informed.
Needless to say ,all those involved ,I believe have been coppied in on these e-mails.
We are taking a very pro active approach to the situation. ( Big thanks to Rocket)
You may or may not be supprised that other share holders have also come forward to join our "Action group"

 

[sails]

Re: Brisconnections shareholders - financial ruin

...I have made contact with my local member for Qld, & Federal Member...

Bushie, this is election year for Qld - hopefully Anna Bligh wouldn't want too much negative publicity on this issue either.

I understand those that say the Qld govt or any other instutional type party shouldn't have to pick up the tab for those who have been caught unwittingly, however, they do have much deeper pockets to wait it out for this project to become profitable. It is a road that is bound to get a lot of traffic and, in time could end up doing OK. QIC has about a 10% stake and hasn't bailed.

Interesting that Sir O says this is the first time something like this has happened with an instalment security. I believe he said he used to be a broker. Hopefully this "first time" situation will bring about better safety measures to prevent mums and dads being able to trade these sofisticated securities online in the future.

We watch Air Crash Investigations each week and it is through finding out the cause of these disasters and implementing the necessary changes which has made air travel so much safer these days (mechanically, pilot training, etc.) Hopefully, good will also eventuate from this bcsca debacle.

Bushie, have you guys considered appoaching the current institutional investors to see if any of them would be willing to increase their stake by a small amount by taking your shares? Yeah - probably a long shot...

Just my thoughts...

 

[sails]

Re: Brisconnections shareholders - financial ruin

From converstions with Rocket it appears we have a couple of possible avenues.
Without speaking to Rocket first I am not going to publicly disclose this delicate info, without aproval of the others.
I will however PM Julia & Cuttlefish since they have been very helpful and try and keep you informed.
Needless to say ,all those involved ,I believe have been coppied in on these e-mails.
We are taking a very pro active approach to the situation. ( Big thanks to Rocket)
You may or may not be supprised that other share holders have also come forward to join our "Action group"

Thermal, I think you are very wise to keep it all very close to the chest. Agree with letting Julia and Cuttlefish know as they have really gone out of their way to help.

Good to hear you have found others caught in this thing. Would be good if there was a way to contact any others that may be utterly terrified and not know about your Action Group yet.

All the best

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

Sounds interesting only to date we only know of 5 of us in contact, we would need to access the registry somehow to find out who the other 100's are. I am in the (no money) department therefore I can only try to give my shares/units away to any takers no matter how small a parcel off market. As on market I can only move $500 worth which instantly amounts to a $1million dollar debt. However I liked "Absolutely's" suggestion - anyone who wants from 100 to 1000 shares can have them. Free. I am not selling them, therefore I am breaking no law I know of - surely I can give them away?

Yes. You CAN give them away:

1. Buy a return ticket to Zimbabwe.
2. Find a desperate local. From media reports that would be about 100% of the population.
3. Offer to pay them $US1000 to sign an off-market transfer form. Fully explain to them the consequences of their signing the form: That there will be some debt collection process attempted, but that is unlikely to have any substance given the virtually nil chance of recovery. Aslo explain that they could avoid that possible debt collection process if they transfer the shares to someone else before April.
4. If they agree, then get them to sign the form. Video the signing for reference.
5. Take the form back to Australia and make sure it gets where it is supposed to go.

The total cost of this approach for the trip, incentive payment, and expenses would be around $4k-$6k. I bet that would be much better value for money and far more successful then engaging in a prolonged legal battle which could continue for months AFTER you've been bankrupted.

I think the best form of cooperation between the briscon shareholders on here would be to jointly fund such a trip, sending a representative over with a transfer form for everyone.

Of course you could swap Zimbabwe for another troubled country closer to home if you liked. I think that for someone unable to feed their family the prospect of getting a relative large sum of cash at the cost of receiving a nasty letter or two from an Australian debt collection service would look pretty attractive.

 

[Sir Osisofliver]

Re: Brisconnections shareholders - financial ruin

Sir O, thanks for your comments. I appreciate that you can't actually offer advice, but I suspect that the people affected here, especially Bushie, are probably too upset and stressed to easily follow the advice in your last sentence.
Can you offer them some clues as to anything they may legitimately do at this stage?

What I was getting at Julia is if you are going to default anyway - that it's better to have your shares sold earlier rather than later - but after reading bushie's upload (thanks bushie) - it's not going to work like that. They will do an auction, so instead of the shares dribbling out as they determine who is defaulting they have organised it so that the whole lot hit the market at the same time (and are auctioned). It'll probably be a bookbuild process - but wow that could be a %^&* of a deal to try and sell. This means that everyone will get the same price. (and sorry but that price is going to be @&^! because the auction is a fire sale and the buyers know it).

There is no way therefore to jump the line.

Honestly if my house was on the line for this - I'd be trying to transfer those shares elsewhere.

Sir O

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Hi Cuttlefish, yes, we are all pursuing different avenues. Rocket 12 is busy sussing out lawyers, I have a complaint lodged with ASIC, we are all in touch with Australian Shareholders Association who is advocating on our behalf to all parties on the other side, I have made contact with my local member for Qld, & Federal Member, have had 2 visits to lawyers, & 1 to my accountant.
Regarding the media, ASA is cautious in this area at present as they are hoping to resolve this mess without going hugely & embarrassingly public. As Trevor Rowe of Brisconnect states, the integrity of the project is important & if we publicly damn them, what hope will we have of fair play? I would much prefer that it be resolved in a quiet & calm manner rather than be a tv target for 'idiot of the month'. As you all know from this thread, until the details get ground about out in the open, many will have a poor view of those caught up in the trap.
I really appreciate the thought that went into your response, thank you for airing all of these directions, any & all suggestions are being explored for legality or plausability. Desparation breeds inventiveness & we need all your heads to do battle with this. Thanks again

Bushie - its great to hear that your all working together and have taken so many steps. I also get your point about the media which makes sense - the ASA would have experience in managing the media side of controversial issues - so its good that you have them there to assist with these sorts of issues/decisions.

I won't ask too many questions because as thermal points out it is a public forum - but it sounds like you are in touch with the right sort of professionals and getting some good advice, and its just good to hear that you are all actively working to resolve your situation. Even if it doesn't work out as hoped at least you'll have given it a shot which is the only thing you can do.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

While some things in the announcements may be surprising or appear to be, it would depend upon whether they are material to the situation or not.

While it may be a harsh outcome, this itself does not necessarily render the contract unenforceable under common law.

The involved parties really do need proper legal advice on this, as to their legal position and the options available to them.

Yes I agree with what you are saying. Anything of interest in the announcements is possibly more useable in the publicity/PR stakes than necessarily having any significant influence on legal outcomes - though the stuff about the substantial shareholders notices, including some from MQG, referring to the class as 'Fully Paid' (my interpretation only refer to originals) may be relevant as a supporting argument. (with the usual caveat that I'm not a lawyer so these are laymans opinions only).