BCS - BrisConnections Unit Trusts

yttrium · 13 April 2009

Sunder

however, the judge, at least in the quoted context, limited his comment on the legality of legally disposing of the shares, not of the legality of accepting the shares, knowing there is a liability attached, and having no intent to pay them.

As has been repeated by myself (ad nauseum) and others, the security is not a liability, but incurs a liability to the registered holder at a particular time. Hence there are no grounds for a transfer of securities representing a transfer of liability, by either the divestor or acquirer, and therefore no grounds for allegations of fraud. If you still hold your view that the securities carry a liability, that is your entitlement, but be aware that it is a view at odds with the judgement.

Is it your view that it should be a requirement that anyone acquiring securities must have an ability to meet the liability that they might incur? I agree that this would have been a good condition for the transfer of this type of security, and would have prevented a lot of anguish. But clearly the condition of meeting the incurred liability has not been a condition of transfer.

freddy2 · 13 April 2009

Sunder said:
Fully agree - and sellers to Bolton know that he is not intending to pay. This destroys the arms length

You really need to re-read the judgment because this is not true. While Bolton clearly does not intend to pay he does intend to either off load the shares or wind up the company to achieve this. In no way does this destroy an otherwise arms length transaction with Bolton.

sails · 13 April 2009

yttrium said:
...As has been repeated by myself (ad nauseum) and others, the security is not a liability, but incurs a liability to the registered holder at a particular time. Hence there are no grounds for a transfer of securities representing a transfer of liability, by either the divestor or acquirer, and therefore no grounds for allegations of fraud. If you still hold your view that the securities carry a liability, that is your entitlement, but be aware that it is a view at odds with the judgement.

Yes, Sunder has had us all going on about unit holders selling on the basis of whether or not the buyer has the ability to pay. But, as you rightly point out, the judgement clearly states that there is no liability unless you own the units on a certain date. Hopefully, that clears it up once and for all...

brty · 13 April 2009

Sunder,

Paying the bum to take the shares a month ago, say $1000 to take $1m face value of units, would have had a positive benefit for the bum, as he could now transfer his units to the JAB charity, something nobody here knew about 1 month ago.

It goes to show that the transfer of the asset, is just that at present, and can legally be arms length or non-arms length, because nobody really knows IF there will be liability, until the 29th April because of the special meeting.

brty

Macquack · 13 April 2009

Macquarie Puts Together Syndicate To Take BrisConnections Private
From the Wall Street Journal
http://online.wsj.com/article/BT-CO-20090412-703377.html

Executives from Macquarie are working over the Easter holiday weekend to have a proposal put to unitholders at an already planned extraordinary meeting Tuesday that was called to vote on a proposal to wind up BrisConnections, the newspaper said, without citing its sources.

Now Macquarie wants the meeting to go ahead.

Julia · 13 April 2009

The article is only available to subscribers, Macquack. Any chance of a copy and paste of it? Sounds interesting.

Sunder · 13 April 2009

yttrium said:
Sunder

As has been repeated by myself (ad nauseum) and others, the security is not a liability, but incurs a liability to the registered holder at a particular time. Hence there are no grounds for a transfer of securities representing a transfer of liability, by either the divestor or acquirer, and therefore no grounds for allegations of fraud. If you still hold your view that the securities carry a liability, that is your entitlement, but be aware that it is a view at odds with the judgement.

Is it your view that it should be a requirement that anyone acquiring securities must have an ability to meet the liability that they might incur? I agree that this would have been a good condition for the transfer of this type of security, and would have prevented a lot of anguish. But clearly the condition of meeting the incurred liability has not been a condition of transfer.

I agree with everything you say above. The fraud is not the selling of the liability. I have also said that numerous times. But someone (Bolton) has out and out said, "I will send the shares to a useless company a day before determination date if things don't my way". Hasn't he already admitted that he's intending to default on the liability?

The issue is not due diligence on the part of the seller to check on the buyer. The issue is the ethics of selling to someone who has outright said they intend to default.

There is no due diligence on K-mart to check if purchasers of knives are mentally stable. However, if one came to the checkout and said "I'm going to take this knife and start stabbing people - as soon as I've paid for it..." and then the checkout person still sells it and says "Sure mate, I guess you don't need a bag then?"... Legal or not, there are some ethical issues there.

I don't think that view is at odds with the judgement, so much as not covered by it.

Macquack · 13 April 2009

This is all there is.
Macquarie Puts Together Syndicate To Take BrisConnections Pvt-Report

SYDNEY (Dow Jones)--Australian toll road developer BrisConnections' (BCS.AU) main underwriter, Macquarie Capital Advisers, is putting together a syndicate to take the developer private and give retail investors an opportunity to exit their investment in the firm, the Australian newspaper reported Monday.

Executives from Macquarie are working over the Easter holiday weekend to have a proposal put to unitholders at an already planned extraordinary meeting Tuesday that was called to vote on a proposal to wind up BrisConnections, the newspaper said, without citing its sources.

The move is the latest in a number of attempts to resolve a messy situation. Investors in BrisConnections partly paid securities initially paid A$1.00 for each unit last year with the requirement that they pay two further installments of A$1.00 each as project construction got underway. But the price of the units fell dramatically when listed on the Australian Securites Exchange and retail investors bought the units at just 0.1 Australian cent without realizing that they would have to make further installment payments.

In a statement last week, BrisConnections said its joint underwriters, Macquarie and Deutsche Bank AG, weren't able to agree on a proposal to waive their rights to recover an upcoming A$1.00 installment from retail investors in the partly paid units or securities.

-By Iain McDonald, Dow Jones Newswires

drsmith · 14 April 2009

JAB_Charity said:
These are the laser-in questions drsmith.

Thankyou for posting them.

As far as the 10am 14 April meeting is concerned: BCSCA transfers were required to be registered with the Link share registry service by close of business THU 9 April and Proxies were required to be faxed to BrisConnections or Link by 10am SUN 12 April.

So we are not of course now talking to new prospective BCSCA sellers about 14 April voting matters. All those instructions are set and I'm sorry that we will only be able to make them known through our actions at the meeting.

There will be a lot of press there -- and updates will stream pretty fast I'm sure -- as the aggregate votes become known.

14 April meeting, if it goes ahead at all following 9am Supreme Court of QLD ruling to be handed down by Justice Dutney -- well, if the meeting gets under way we are all facing extraordinary circumstances with highstakes for all.

So as everyone already can see it will not be a simple casting of votes like a general AGM where the financial accounts are adopted and there might be a symbolic protest vote over the remuneration committee's bonus package for the directers. And then off for a scone and a chat with management.

The stakes are so high that there will be Federal Politics type scrutiny of each and every proxy form and vote by teams of lawyers for all parties. Not wanting to be too facetious, but think 2004 US Predential Election -- crucial State of Florida.

What we expect is that the meeting will run at least all day 14 April as much of the time will be spent with lawyers scrutinising the proxies and challenging the authority to act of attendees.

+Meeting could well then be adjourned with unfinished business.

And this might even be a good idea to give stakeholders some more time to breathe -- however if the 29 April call is somehow deferred or adjourned or rescheduled it is not totally certain what this will mean for the $2.9m of syndicated funding to the project. We are sure that this cadre of mostly foreign bank commitments, if not wanting to exit the Brisbane Airport Toll altogether, would like terms to be re-struck to take into account the current economic environment -- so any wiggle room to declare the commitments void, such as a change in the 29 April 2009 $1 call, could bring the project down. Most would agree that this would be a bad outcome for Australia.

David C. Barrow, Trustee, The Julie Anne Barrow Charitable Trust

http://www.barrow.org.au/

Although your post above did not provide direct answers to the questions raised it was an interesting read in itself.

It seems to me that your interest in this goes well beyond just the fate of the retail unitholders. I just hope that should a conflict of interest arise that it is the retail unitholders you put first when you vote on the resolutions (should it come to that).

With regard to the $2.9m of syndicated funding there have been a number of media reports suggesting that if the banks could choose now, they would not do it. It's going to be very interesting to see how this plays out even if Brisconnections gets the instalment money into it's coffers (from whatever source). It would not suprise me in the slightest if one or more of the banks in the syndicate have lawyers going over the loan agreements with a fine tooth comb to try and find a way out.

The following article from The Australian offers some interesting commentary,

http://www.theaustralian.news.com.au/business/story/0,28124,25324942-643,00.html

BrisConnections chairman Trevor Rowe will chair the meeting despite the fact that he is also chairman of the Queensland Government's investment arm QIC, which has a 9.9 per cent stake.

Macquarie, which has multiple exposure to BrisConnections as an underwriter, financier and stakeholder, is believed to be working on a take-private proposal that would bring all major institutional shareholders in to pay $2 a unit, thus allowing retail unitholders to walk away if they want to.

The odds of QIC taking a bigger stake shorten by the minute.

The Queensland Government declined a proposal to cut back elements of the tollway plan to save money.

Does this now mean that Queensland Government will have to cough up extra for the tollway to be built in it's present form ?

I'm wondering whether the board of Brisconnections should have organised the meeting for the Gabba and sold tickets.

yttrium · 14 April 2009

Sunder

You seem to think that there is some crime being committed through the transfer of units, but what crime? There is no condition of transfer of units of being able to meet any incurred liability, be it inclination or capacity. Nor can I understand how it is that the holder of units is commiting a crime by being unable to meet a liability. I can understand your reasoning if there has been a transfer of a liability to a person unable to pay, but where is the deception here? I could buy a few million BCSCA today, subsequently incurring a liability that I could not pay: Would this be a criminal act? My understanding is that there has to be a deception of the creditor, not merely a lack of funds to pay a liability.

adman0001 · 14 April 2009

Sunder said:
I agree with everything you say above. The fraud is not the selling of the liability. I have also said that numerous times. But someone (Bolton) has out and out said, "I will send the shares to a useless company a day before determination date if things don't my way". Hasn't he already admitted that he's intending to default on the liability?

The issue is not due diligence on the part of the seller to check on the buyer. The issue is the ethics of selling to someone who has outright said they intend to default.

There is no due diligence on K-mart to check if purchasers of knives are mentally stable. However, if one came to the checkout and said "I'm going to take this knife and start stabbing people - as soon as I've paid for it..." and then the checkout person still sells it and says "Sure mate, I guess you don't need a bag then?"... Legal or not, there are some ethical issues there.

I don't think that view is at odds with the judgement, so much as not covered by it.

You know Sunder, I asked you once before ol' mate to a typical no response, did you or anyone else know at the start of the year what Bolton's intensions where, what his financial status was, when these transfers where apparently made, because if YOU did, you must be his brother or something. I've been an interested observer in all this and I must say I find it very odd for someone to continually lay the boot in when people are down and needing to find a way out. As I said before, these people had found a willing buyer who wanted more of the stock, who in the hell cares what his motives are, remembering the timeline of all this. There are so many sides to all this. There's the 1300 people aready employed on the project, they'd be hearing rumours every other day of the week about their jobs, all the uncertainty for them. I know what it's like, I've been working in construction all over Oz for over 20 yrs and i've seen big jobs fold, take ANC in Rockhampton for instance! But this is different, they've got a hole in the ground that they are not just goin to stop working on and leave. At the end of the day this job will be finished, whether the state gov. or someone else steps in, it'll get done. The legalities of all this will get sorted and hopefully those people with the transfers will be left in peace. Can you imagine the heartache of those and the ones still holding them have had over these months. Good luck to them I say. Maybe you just gotta try and wear the shoe on the other foot Sunder, it's not that hard......

Enzyme · 14 April 2009

News just in - the meeting can proceed

BrisConnections wind-up meeting can proceed

drsmith · 14 April 2009

Not only that, negotiations between the co-underwriters of the failed BrisConnections float, Macquarie Group and Deutsche Bank, broke off over the weekend. Both parties say they will wait for the result of a shareholder vote before agreeing to any deal.

http://business.smh.com.au/business/brisconnections-fateful-morning-20090413-a4re.html

So much for my idle speculation.

Enzyme · 14 April 2009

Another complication. This time with proxies that would give unit holders yet another reason to challenge the result of the meeting in the event of Bolton failing. From this link BisConnections' crisis Meeting:

A further complication involving this morning's meeting is that the only posted proxies that will be counted are the ones posted by unitholders before 6 pm in capital cities on last Wednesday.

It seems this has happened because the deadline for lodging proxies by post, was 10 am Sydney time Friday, but the forms were not sent out until last Tuesday and did not arrive in letterboxes until Wednesday.

That means investors had just half a working day to fill out the form and post it. Failing that, their only option is to fax the proxy form and not every one has a fax.

There is no online voting, so a potential mess could happen and that could in turn trigger another legal challenge entirely separate to the one we will hear about today.

Enzyme · 14 April 2009

Slightly more detail on the judges ruling: BrisConn faces wind-up

In a two-minute hearing in Brisbane, Justice Dutney in the Supreme Court of Queensland did not uphold any of the claims put by Macquarie Group, co-underwriter and financier of BrisConnections, or grant an injunction sought by the investment bank to stop a meeting of unit holders from proceeding.

Dammit, why is AussieStockForums now demanding I make every post a minimum length? Is that happening to everyone? My previous posts I had to put a heap of zzzzzz's at the end of my post to be allowed to post it, then I edited the post to get rid of the rubish it forced me to add at the end.

Prospector · 14 April 2009

Hey Enzyme, this discussion used to be in General Chat and it has now been moved into a Formal Share discussion, so the rules changed, and the minimum length is designed to stop blatant ramping.

sails · 14 April 2009

Enzyme said:
...Dammit, why is AussieStockForums now demanding I make every post a minimum length? Is that happening to everyone? My previous posts I had to put a heap of zzzzzz's at the end of my post to be allowed to post it, then I edited the post to get rid of the rubish it forced me to add at the end.

I'm guessing it's because the thread has been renamed and put under the stock forum where you have to have 100 characters. ASF don't want ramping - but that's hardly a problem with this stock!

Problem is if you type lots of dots or zzzs - a mod might delete the post!

Also, this is not a normal ASX traded stock - perhaps it would be better placed under the derivates forum now that it will be traded in future under similar conditons to options, warrants and futures. Just my opinion

Going to be an interesting few days...

Julia · 14 April 2009

Agree with Sails - ramping surely isn't going to be a problem!!
I think it should go back into the General Chat section.

sails · 14 April 2009

adman0001 said:
You know Sunder, I asked you once before ol' mate to a typical no response, did you or anyone else know at the start of the year what Bolton's intensions where, what his financial status was, when these transfers where apparently made, because if YOU did, you must be his brother or something. I've been an interested observer in all this and I must say I find it very odd for someone to continually lay the boot in when people are down and needing to find a way out. As I said before, these people had found a willing buyer who wanted more of the stock, who in the hell cares what his motives are, remembering the timeline of all this. There are so many sides to all this. There's the 1300 people aready employed on the project, they'd be hearing rumours every other day of the week about their jobs, all the uncertainty for them. I know what it's like, I've been working in construction all over Oz for over 20 yrs and i've seen big jobs fold, take ANC in Rockhampton for instance! But this is different, they've got a hole in the ground that they are not just goin to stop working on and leave. At the end of the day this job will be finished, whether the state gov. or someone else steps in, it'll get done. The legalities of all this will get sorted and hopefully those people with the transfers will be left in peace. Can you imagine the heartache of those and the ones still holding them have had over these months. Good luck to them I say. Maybe you just gotta try and wear the shoe on the other foot Sunder, it's not that hard......

Yes, I am totally mystified what his motivation is to keep posting the way he does. Adman0001, hopefully there have been enough other posters with a different perspective to offer some encouragement.

When all this is over, it would be interesting to hear what happened to our original posters that were caught.

mazzatelli1000 · 14 April 2009

http://business.smh.com.au/business/brisconn-faces-windup-20090414-a56b.html

Well things are looking interesting

BCS - BrisConnections Unit Trusts

yttrium

freddy2

sails

brty

Macquack

Julia

In Memoriam

Sunder

Macquack

drsmith

yttrium

adman0001

Enzyme

drsmith

Enzyme

Enzyme

Prospector

Not a scaredy cat anymore

sails

Julia

In Memoriam

sails

mazzatelli1000

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