BCS - BrisConnections Unit Trusts

cuttlefish · 27 March 2009

Re: Brisconnections shareholders - financial ruin

It seems the directors of the company might be forgetting that it is the unitholders/shareholders who's interests they are supposed to serve. It sounds like the vast majority don't feel well served by the current situation.

Given that the trust needs the instalment funds to pay for the construction of the road, and given that they would by now be aware that a large proporiont of those unit holders will not be in a position to pay the instalments - how do they account for this from a legal/accounting perspective in their books. Are they entering into contracts with suppliers/subcontractors based on the assumption that this instalment revenue is coming in? If so, is this a reasonable business practice? Do they account for these instalments payments as an asset/receivable on their books? Should they be writing that asset down if so, given the likelihood of a lot of non-payments? (I'm not an accountant - would be interesting to know how they account for the pending payments on their books though and how much those payments are being relied upon in current contractual commitments they have been making prior to receiving those payments).

Actually I guess because it is fully underwritten there aren't really any questions to be asked about whether they will receive the instalment money so most of the above questions are probably moot.
They will get the instalment funds from the underwriters for the unit holders that can't pay.

Enzyme · 27 March 2009

Re: Brisconnections shareholders - financial ruin

ASX substantial shareholder notice has been published, backing up what our Jim Byrnes has said: asx release

The current court case has finished. We're all now just waiting on the verdict: asx release

Prospector · 27 March 2009

Re: Brisconnections shareholders - financial ruin

sails said:
Thanks for the explanation, Jim. That's how I understood page 9 of the document:ASX release. Obviously your client wouldn't want to have his deals voided and explains the effort he has undertaken to ensure, to the best of his knowledge, that his purchases will hold.

Which means that any party who has sold BCSCA off market, for any price, to an identity who is neither bankrupt nor fraudulent has therefore been able to divest themselves of the instalment liability, even if it was done to avoid paying the instalment. Sounds good to me! And what I expected.

It also means that this warning by BCSCA was wrong:
By memory, I believe BCS has warned that any off market transfers for the purpose of avoiding the debt can be overturned.

Gazzer · 27 March 2009

Re: Brisconnections shareholders - financial ruin

Prospector said:
Which means that any party who has sold BCSCA off market, for any price, to an identity who is neither bankrupt nor fraudulent has therefore been able to divest themselves of the instalment liability, even if it was done to avoid paying the instalment. Sounds good to me! And what I expected.

It also means that this warning by BCSCA was wrong:
By memory, I believe BCS has warned that any off market transfers for the purpose of avoiding the debt can be overturned.

So presumably it could follow that if someone has acted on the advice of BCSA and held onto their shares when they could have sold them off market, this might be grounds to refuse paying the next installment. That will be an interesting one for the lawyers to argue.

Prospector · 27 March 2009

Re: Brisconnections shareholders - financial ruin

Gazzer said:
So presumably it could follow that if someone has acted on the advice of BCSA and held onto their shares when they could have sold them off market, this might be grounds to refuse paying the next installment. That will be an interesting one for the lawyers to argue.

You can also bet that BCSCA have a disclaimer which says "Seek your own independent financial advice before acting on this information"

Cats · 27 March 2009

Re: Brisconnections shareholders - financial ruin

" Beware of wolves in sheeps clothing " ???/ As always do your own research.:
Cant seem to post links very well...but try this www.smh.com.au August 14th 2007 heading "Judge notes a calmer......."

Macquack · 27 March 2009

Re: Brisconnections shareholders - financial ruin

I found this interesting.

Brisbane Toll Road Link Pty Ltd (BTRL) acquired 1 million shares from "Bristrap Pty Ltd" for the consideration of $10.

Bristrap Pty Ltd was first registered on 9 January, 2009.

Looks like someone set up a $2 company to dump their Brisconnection shares into and then had second thoughts about the legality and so now has sold a second time to BTRL.

freddy2 · 27 March 2009

Re: Brisconnections shareholders - financial ruin

From the latest article:

------------
"If BrisConnections were to be wound up, unit holders would lose their ability to trade their units or accept any potential offer for their units," Nick Lattimore said on Boardroom Radio Australia yesterday.
------------

Getting zero is far better than paying a further $2 to get less than $2 back.

Disclosure: Never held any interest in these shares, just a curious bystander.

Prospector · 27 March 2009

Re: Brisconnections shareholders - financial ruin

freddy2 said:
From the latest article:
"If BrisConnections were to be wound up, unit holders would lose their ability to trade their units or accept any potential offer for their units," Nick Lattimore said on Boardroom Radio Australia yesterday.
------------

How could anyone say that with a straight face!

sails · 27 March 2009

Re: Brisconnections shareholders - financial ruin

Cats said:
" Beware of wolves in sheeps clothing " ???/ As always do your own research.:
Cant seem to post links very well...but try this www.smh.com.au August 14th 2007 heading "Judge notes a calmer......."

Cats, I was only able to find an excerpt of that article, but I am mystified why it matters who offers the lifeline
If the ASX permitted a smaller price and the same deal was done online, you would never know who bought them. Is there a difference?

In any case, I get the impression that Jim is not the one actually buying - he speaks of someone by the name of Ray doing the buying. That's just going on the bits and pieces I have read.

Again, from the outside looking in, the lifeline currently being offered appears to allow people to put this behind them, get on with their lives, keep their possessions, etc. Certainly not suggesting what you should do, just wondering what am I missing??? Too simplistic?

Cats · 27 March 2009

Re: Brisconnections shareholders - financial ruin

Yes...I Agree.....if drowning you might hold onto any lifeline...but not the one that pushed you in.......

Martin 123 · 28 March 2009

Re: Brisconnections shareholders - financial ruin

And plot thickens....:Courier Mail Saturday

"But behind the scenes, BrisConnections chairman Trevor Rowe had a number of negotiations with Bolton.

Rowe's suggestion was to reinstate the dividend and defer the $1 instalment due in April. That would have seen Bolton pocket $4.5 million for his investment - and perhaps, if the April instalment was deferred, let him sell out before bigger liabilities kicked in.

Could this have been a high-risk greenmail attempt - that has put a $4.8 billion project at risk? "

Prospector · 28 March 2009

Re: Brisconnections shareholders - financial ruin

Martin 123 said:
And plot thickens....:Courier Mail Saturday

"But behind the scenes, BrisConnections chairman Trevor Rowe had a number of negotiations with Bolton.

Rowe's suggestion was to reinstate the dividend and defer the $1 instalment due in April. That would have seen Bolton pocket $4.5 million for his investment - and perhaps, if the April instalment was deferred, let him sell out before bigger liabilities kicked in.

Could this have been a high-risk greenmail attempt - that has put a $4.8 billion project at risk? "

Surely it would now be illegal to re-instate the dividend once it has been announced to the market it was deferred! ASIC would have a say, surely.

sails · 28 March 2009

Re: Brisconnections shareholders - financial ruin

Cats said:
Yes...I Agree.....if drowning you might hold onto any lifeline...but not the one that pushed you in.......

Thanks Cats, obviously you have your reasons of which I am not aware. I imagine you have put a lot of research into your predicament and sincerely wish you all the best.

Here are a few more recent articles:

http://www.news.com.au/couriermail/story/0,23739,25252317-3122,00.html - The article which Martin referred to earlier.

http://business.theage.com.au/busin...d-battle-with-unit-holders-20090327-9eca.html - and an interesting excerpt for unit holders:

In the words of Justice Robson, these are people in "a very difficult situation" due to the very entity — BrisConnections — that is supposed to be representing their interests.

Hugh McLernon, managing director of litigation funding firm IMF Australia, has agreed to pay for a senior counsel to represent several unit holders in the matter next week.

IMF successfully bankrolled a class action against Sons of Gwalia in 2003, and has recently been involved in litigation surrounding Opes Prime and Firepower Australia...

http://business.smh.com.au/business/fork-in-the-road-20090327-9e6d.html (Almost the same article as the link above)

SMH - Letter to shareholders: http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00940093BCS

erana · 28 March 2009

Re: Brisconnections shareholders - financial ruin

I just read an article about this mess in The Age. I'd heard about it before but hadn't paid much attention. Now I get what happened and my mouth is agape

Have to wonder what this sort of thing does to investor confidence. Previously if a friend had a few thousand bucks to throw at something and asked me simply whether they'd be better off taking it to Star City or picking a few random stocks on CommSec, then leaving aside that neither is a great choice, I'd have advised them to do the latter. Now it seems they'd be safer taking their money to the casino or racetrack.

Julia · 28 March 2009

Re: Brisconnections shareholders - financial ruin

A further interview with an accountant representing investor couple on the ABC's "The National Interest".

http://www.abc.net.au/rn/nationalinterest/stories/2009/2528356.htm

wonderrman · 28 March 2009

Re: Brisconnections shareholders - financial ruin

Julia said:
A further interview with an accountant representing investor couple on the ABC's "The National Interest".

http://www.abc.net.au/rn/nationalinterest/stories/2009/2528356.htm

Thanks Julia, the interview was very good to listen to. It is certainly is a very interesting and bewildering case.

Martin 123 · 28 March 2009

Re: Brisconnections shareholders - financial ruin

Julia said:
A further interview with an accountant representing investor couple on the ABC's "The National Interest".

http://www.abc.net.au/rn/nationalinterest/stories/2009/2528356.htm

Question to financial experts?
As mention in discussion : "Tool Road operator invested into financial derivatives and lost few hundred millions in process.."
1- Underwriters are covering loss?
2-Unsophisticated investors (mums and dads) covering ?

Largesse · 28 March 2009

Re: Brisconnections shareholders - financial ruin

"Question to financial experts?
As mention in discussion : "Tool Road operator invested into financial derivatives and lost few hundred millions in process.."
1- Underwriters are covering loss?
2-Unsophisticated investors (mums and dads) covering ? "

Balance Sheet of BCS takes the hit, so ultimately, equity holders (ie. 80% M&D's) cover/take those lossses.

Martin 123 · 28 March 2009

Re: Brisconnections shareholders - financial ruin

Largesse said:
"Question to financial experts?
As mention in discussion : "Tool Road operator invested into financial derivatives and lost few hundred millions in process.."
1- Underwriters are covering loss?
2-Unsophisticated investors (mums and dads) covering ? "

Balance Sheet of BCS takes the hit, so ultimately, equity holders (ie. 80% M&D's) cover/take those lossses.

Hmmm... but they invested into Toll Road Builder to built, not into Financial Institution ?to engage into sophisticated financial products and loose millions...( Please explain)

BCS - BrisConnections Unit Trusts

cuttlefish

Enzyme

Prospector

Not a scaredy cat anymore

Gazzer

Prospector

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Cats

Macquack

freddy2

Prospector

Not a scaredy cat anymore

sails

Cats

Martin 123

Prospector

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sails

erana

Julia

In Memoriam

wonderrman

Martin 123

Largesse

Martin 123

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