BCS - BrisConnections Unit Trusts

[Macquack]

Re: Brisconnections shareholders - financial ruin

For me, the key thing was hearing a professor of corporate law say that transferring the shares doesn't get rid of your liability.

Professor Ramsay does not say that.

What he says is that if the trust is wound up, it does not relieve unit holders of their requirement (liability) to pay the further installments.

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

Thanks for the correction. You're quite right.

Brisconnections have a new ASX release: link

That includes a page on transfers. They say that transfers can be undone and the liability returned to whoever did the transfer.

BCS really have their investors in a bind. They say that:

- there is no way to avoid the liability;
- winding up the company will not avoid the liability, and;
- perfectly legal transfers will be undone and the liability will get back to you;

That said, I do think Bolton has a legitimate chance. If he takes over BCML or whatever the management trust is called, he can eliminate the liability then windup the trust.

 

[Largesse]

Re: Brisconnections shareholders - financial ruin

I'm sorry but i just can't comprehend how a legal off-market transfer of the shares does NOT remove your liability for future obligations.

Off market transfer of shares is as legitimate and LEGAL as selling your shares is.

Are BCS saying that anyone who's ever owned BCS shares and on sold them liable for the 2x $1 payments?

Because that's what it's sounding like and quite frankly that absurd.

Actually, on re-read, what they are saying is that transfers CAN be undone.
And I guess they can, but i'd think they'd need solid legal reasoning to do so because in effect they are asking for a private contract between two unrelated and independent parties to be voided.


simply awesome case-study for commercial/contract law

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

I'm sorry but i just can't comprehend how a legal off-market transfer of the shares does NOT remove your liability for future obligations.

Off market transfer of shares is as legitimate and LEGAL as selling your shares is

I agree, offmarket = onmarket. We have done several ourselves; some through an inheritance and some into our Super Fund from a personal account. How can they be 'undone'?

 

[prawn_86]

Re: Brisconnections shareholders - financial ruin

Have to agree with Largesse on this one. It would be a brave lawyer/firm/company that would try and undo off-market transfers. In fact the lagal costs of chasing all the smaller transfers would probably out weigh the benefit as those smaller holders wouldnt be able to meet the liability anyway...

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

Since the whole Bolton thing appears to be out in the open My comments are as follows:

BCSCA state in their PDS that you can trade shares off market.
They have since sent intimidating letters to share holders stating they advise you not to vote to wind up the company and not to transfer your shares to avoid the debt.
I think they are in a bit of a panic!

Any off market share will be lagal. I dont know Mr Boltons Financial situation as much as BCSCA do.
They also were not intersted in mine when I bought them from COMSEC.
Nothing stopping me buying another 5million liabilty also.

BCSCA are trying their damdest to scare investors into not transfering their shares.
Ignore it.

If your not on the registry by the due date then your not liable for the installment.

However, Like sunder says they will try every legal avenue to try and reverse them..... but i doubt very much they can.
Their is nothing fraudulent about it whatso ever. I am sure Mr B has a well thought out bussiness plan.

 

[sails]

Re: Brisconnections shareholders - financial ruin

...I am sure Mr B has a well thought out bussiness plan.

From this statement, it appears that Mr B is not conveying any intention to become insolvent. Surely on that basis, it wouldn't be illegal to transfer shares to someone (especially someone not destitute) who is willing to take them.

All conjecture, of course

 

[drsmith]

Re: Brisconnections shareholders - financial ruin

I think they are in a bit of a panic!

That's the impression I got too. They did not mention any reference to having obtained legal advice in their opinion on the validity of off-market transfers.

I also note the intention to declare a distribution of $0.05 per share post payment of the second instalment and that a DRP will be available for this distribution. That will be interesting if the units (BCSCB) are still trading at $0.001 during the DRP pricing period.

That's not a distribution I would be banking on.

 

[Aurum]

Re: Brisconnections shareholders - financial ruin

I assume that as well as the $1305 dollar admin fee a consideration (1$) was paid for the shares. I don't know Australian law but under UK law a contract without consideration is null and void. This could be how they intend to undo the transfers.

Mike.

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

I assume that as well as the $1305 dollar admin fee a consideration (1$) was paid for the shares. I don't know Australian law but under UK law a contract without consideration is null and void. This could be how they intend to undo the transfers.

Well, who is to going to prove or disprove there wasnt some consideration given? Bolton would know his contract stuff, and even $1 would do it. I dont think they can undo them and if your name is not the registered owner at 'pay date' then there is no legal obligation to pay the instalment.

 

[Aurum]

Re: Brisconnections shareholders - financial ruin

Well, who is to going to prove or disprove there wasnt some consideration given? Bolton would know his contract stuff, and even $1 would do it. I dont think they can undo them and if your name is not the registered owner at 'pay date' then there is no legal obligation to pay the instalment.

I just thought I'd mention it. Better to cover all bases etc.

Mike.

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

I think all of this is brand new territory Aurum so no-one really knows; but I cant think they can suddenly make something that has always been legal, illegal because it suits the consortium. I guess we only have a few weeks to wait now.

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

Hi Thermal, it is good to hear from you again. I think like most people here I am cheering for you and the other unitholders and hope it all works out for the best.

Sadly, I do now believe BCS can undo the transfers. It has taken a lot to convince me, but I have been pointed to a section of the Corporate Law Act (2001). this link happens to be from the legal database on the Australian Taxation Office site, but googling for "1072F(3)" in Australia shows many other sources of the same information:

1072F(3) [Directors may refuse to register]

The directors may refuse to register a transfer of shares in the company if:

(a) the shares are not fully-paid; or

(b) the company has a lien on the shares.

I hate to be the bearer of bad news. I also searched the PDS and couldn't see any reference to off-market transfer of shares. I know their website says you can, but I don't think it is in the PDS.

:-(

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

Hi Thermal, it is good to hear from you again. I think like most people here I am cheering for you and the other unitholders and hope it all works out for the best.

Sadly, I do now believe BCS can undo the transfers. It has taken a lot to convince me, but I have been pointed to a section of the Corporate Law Act (2001). this link happens to be from the legal database on the Australian Taxation Office site, but googling for "1072F(3)" in Australia shows many other sources of the same information:
:-(

So what happens in the case of options then; they are traded up to the date of expiry. And this wouldnt be an ATO issue; that is a separate issue entirely and would refer to issues like CGT/losses in offmarket transfers, at a rate different to that on the open market.

 

[Macquack]

Re: Brisconnections shareholders - financial ruin

I assume that as well as the $1305 dollar admin fee a consideration (1$) was paid for the shares. I don't know Australian law but under UK law a contract without consideration is null and void. This could be how they intend to undo the transfers.

Well, who is to going to prove or disprove there wasnt some consideration given? Bolton would know his contract stuff, and even $1 would do it.

If you have a look at the ASX site, you can view copies of the "Deed of Gift of shares" used to donate the shares to Bolton.

It clearly states " This parcel of securities was aquired for Nil Consideration "

Is Bolton using a cut-price lawyer?

 

[Largesse]

Re: Brisconnections shareholders - financial ruin

maybe, just maybe, Bolton want's to own a large chunk of brisconnections
i know i've always wanted to own my own bit of road... think Kramer in Seinfield

 

[drsmith]

Re: Brisconnections shareholders - financial ruin

Brisconnections directors have brought out the heavy artillary.

http://www.asx.com.au/asxpdf/20090303/pdf/31gdptldzzlczb.pdf

No prizes for guessing where it's being aimed.

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

They have asked for an order to wind up ASI subject to provisions of the Corporations Act? OK, off to find out how they have the right to do that.....I dont think that will one will succeed though; they are using an alternative section which suggests they dont have the confidence in one or other to succeed.

 

[shaunQ]

Re: Brisconnections shareholders - financial ruin

For those interested. Here are the sections from the act

http://www.austlii.edu.au/au/legis/cth/num_act/ca1989172/s459.html

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s461.html

They may have a chance, but I think trying to stop the meeting should* be dismissed. He isn't insolvent yet.

 

[quinn123]

Re: Brisconnections shareholders - financial ruin

I just want to say: 1000 posts in my thread!

I know its for the wrong reasons though.

Good luck.