BCS - BrisConnections Unit Trusts

[skc]

I don't understand the hostility.

The retail investors found themselves stuck owing $500,000+
Bolton offered to everyone he will take their liability off their hands. He did this.

Then he created the vote, he chose to essentially vote as if he hadn't done anything in the first place.

So basically, Bolton has saved the asses of countless people who would be bankrupt by the time of payment, (and made a small fortune in the mean time).

What exactly has he done to make anythign worse for anyone if he never popped his head up in the first place??

Imagine this story (in Lord of the Ring setting)...

The Shire was under attack from the Orcs and all the little hobbits were scared and worried. Gandolf rode into the Shire, rallied everyone and tried to build up their defense (using his own contractors so he made money on the construction). On the eve of the attack, however, Gandolf did a deal with the evil white wizard Saruman. He was paid $4.5m and left the Hobbits to meet their own fate.

Now - the Hobbits are no worse off then they started. But would they still invite Gandolf over for a cup of tea the next time they meet?

 

[Prospector]

Now - the Hobbits are no worse off then they started. But would they still invite Gandolf over for a cup of tea the next time they meet?

And would Gandolf really give a damn if they didnt?

 

[sails]

An excerpt from this article: Stunned investors vent fury at chairman - doesn't look like Jim has a cup of tea in mind...

Alan Bond's pugnacious former bankruptcy adviser, Jim Byrnes, who represents a US hedge fund that is BrisConnections' second-biggest investor, is now threatening a class action against Mr Bolton. "He's not going to get (the $4.5 million), I can promise you that," Mr Byrnes said. "He's just ruined his corporate life forever … I'd trust Mr Bolton like I'd trust a rabbit with a lettuce leaf."

The article also describes a little of what went on in the meeting yesterday.

 

[steve999]

Mr Rowe hailed the failure of the bid to wind up BrisConnections as "the right thing for unit holders", but said he was "very sympathetic" to retail investors (who make up 70 per cent of BrisConnection's share register) left with expensive liabilities.

I know who I'd be annoyed at. Rowe is claiming that the right thing is for retail investors to be hit with a bill they can't pay.

And Macquarie could always declare they would pay instead.

Investors could also have purchased enough shares to be in Bolton's position.

 

[Julia]

Investors could also have purchased enough shares to be in Bolton's position.

Steve, I'd guess that many of the investors who discovered their liability would (a) never have begun to thought of any such move, and (b) be too shocked and fearful to consider buying more shares.

I'm still astonished at the ballsiness of young Bolton. Not too many 26 year olds would take on Macquarie et al.

 

[sails]

ABC report: BrisConnections not optimistic about investor lifeline

The BrisConnections chairman says he is not optimistic about reaching a deal to help investors who say they cannot make payments on their shares.

It would be interesting to know how many unwitting retail investors are actually still holding. We have read reports that some have transferred to Bolton, Jim Byrnes and JAB charity. Was thinking that if the number of retail holders diminishes significantly, perhaps there will be less effort to get the remaining ones out.

 

[steve999]

Steve, I'd guess that many of the investors who discovered their liability would (a) never have begun to thought of any such move, and (b) be too shocked and fearful to consider buying more shares.

I'm still astonished at the ballsiness of young Bolton. Not too many 26 year olds would take on Macquarie et al.

He's done well out of it assuming he can hold on to the $4.5 million. I just get annoyed at people getting annoyed at Bolton... (No opinion yet as to whether what he did was good/bad etc.)

Macquarie purchased some shares to try to block him, they sold the shares to the retail investors in the first place, and if they chose to they could buy the shares back and save the retail investors.

 

[sails]

Here's an excerpt on the news report of Bolton's response: Bolton defends BrisConnections backflip

Bolton claims he has not done a deal to relieve him of his obligation and says he will continue to fight to resolve this matter.

"We are certainly not a passive investor. While I can, I will be doing everything I can to resolve the situation for unit holders. The matter's not over. There's still a big pending issue with the instalments and that needs to be resolved."

Only time will tell what his intentions really are...

 

[Warren Greenspan]

I'm not a legal person but I wonder if there's grounds for a royal commission into this mess.

 

[Prospector]

I would love to know how the ASF'er holders are doing? Have you transferred the liability? Would like to think you are all good now. Any chance of a roll call?

 

[investorpaul]

I would love to know how the ASF'er holders are doing? Have you transferred the liability? Would like to think you are all good now. Any chance of a roll call?

There has been so many opportunities for unit holders to get rid of their holdings it would be interesting to know how many retail shareholders remain.

Off the top of my head there has been:

1. Bolton (19.9%)
2. Macquarie Bank buying 8%
3. Bryne acting for the US hedge fund (???%)
4. Barlow Charity (5%)
5. Another one (not sure on name) (???%)

can anyone fill in the blanks

 

[drsmith]

Zachary

If there is one lesson from Mr Bolton, surely it is that we have to make our own escape and not rely on the benevolence of others. Jumping off the train might seem daunting, but is the destination any better?

If you own these things on the 29th, the liability is yours. Thankfully, the dilemma is not mine, but I still think that Brisconnections should respond to Justice Robson's judgement as it may be of assistance to shareholders wanting to get out.

Personally, if I held them I would be looking to jump off the train for the reasons you have stated above.

That being said though the underwriters are not going to be able to extract blood from a stone even though they have the legal right to recover the debt. There's also broader politics involved given that the road is being built on behalf of the Queensland Government. That therefore leads to the possibility of some sort of deal being worked out between DB/Macquarei/QIC and the Queensland Government to relieve retail unitholders of their obligations.

 

[drsmith]

Hello All -- am back in Melbourne.

Interesting day with BrisCon at the BrisConCentre.

The Julie Anne Barrow Charitable Trust is approaching a 5% stake in BrisConnections (BCSCA).

The charitable trust is still actively acquiring BrisConnections units by way of share transfer donations. And , yes, we received some more donations in Brisbane.

I did happen to have a telephone conversation with Nicholas Bolton on 8 April when Nick called me some 30 minutes after BrisConnections announced on the ASX that the Macquarie deal had been unsuccessful. It was some 10 mins into our conversation when I got the impression that Nick was not so well informed on the breaking developments. When I pointed out that the Macquarie proposal had failed he seemed to be a bit stunned and I suggested that he call me back after he had consulted with his advisors.

Nick did not call me back nor send me any further emails. It seems that not long after we spoke on 8 April that Nick was then likely propositioned by Leightons for $4.5m.

It does not surprise me that Nick took the money and ran. In my opinion -- Nick is no David before Goliath.


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

http://www.Barrow.ORG.AU

I'm tempted to ask how you voted at the meeting but that is now history. With regard to donors from the meeting I'm suprised you wern't swamped.

If worst comes to the worst will the charity be able to pay the $1 per unit instalment on it's 5% holding and if not what will be the fate of the charity ?

 

[Enzyme]

I'm not a legal person but I wonder if there's grounds for a royal commission into this mess.

That can mean only one thing: You must be an illegal person!

Guards! Guards!

I'll get my coat...

 

[investorpaul]

I'm tempted to ask how you voted at the meeting but that is now history. With regard to donors from the meeting I'm suprised you wern't swamped.

If worst comes to the worst will the charity be able to pay the $1 per unit instalment on it's 5% holding and if not what will be the fate of the charity ?

To add to the above questions, were you surprised that you only got 5%? were you making people aware/announcing that you were after their units? if so why dont you think everyone donated them?

It just seems so odd that unit holders have been given a way out, yet havnt taken it. I surpose people who are not up to date with their info or dont use internet forums might not be aware of all the people/groups interested in acquiring units.

 

[investorpaul]

EDIT:

Off the top of my head there has been:

1. Bolton (19.9%)
2. Macquarie Bank buying 8%
3. Bryne acting for the US hedge fund (13%)
4. Barlow Charity (5%)
5. Another one (not sure on name) (???%)

Thats 45.9% so far

 

[steve999]

http://business.theage.com.au/business/in-defence-of-bolton-20090415-a6vf.html

Sums up what I'm thinking.

 

[drsmith]

EDIT:

Off the top of my head there has been:

1. Bolton (19.9%)
2. Macquarie Bank buying 8%
3. Bryne acting for the US hedge fund (13%)
4. Barlow Charity (5%)
5. Another one (not sure on name) (???%)

Thats 45.9% so far

Of the institutional holders other than Macquarie, QIC has 10%, World Capital 7% and Leehman Brothers 4.5%.

http://economics.com.au/?p=2667

Another 39m units (10%) are for sale on the ASX.

 

[Calliope]

How Nick Bolton Pocketed a Cool $4.5m.

By Terry McCrann
April 15, 2009 12:00am

HOW to stiff the big guys and pocket $4.5 million - and KEEP the $4.5 million. That's the story of young Nick Bolton and BrisConnections.

Big guys? They don't come much bigger than Leighton Holdings, Macquarie Bank and Deutsche Bank – all of whom are going to be well and truly, and deservedly, out of pocket.

To say nothing of the Australian stock exchange which in its institutional greed allowed the trap to be set with the listing of a defective investment product in the first place.

It all comes down to the substitution of one letter – H for I. Young Nick's ASI – Australian Style Investments – owns the units in BrisCon and is up for $77 million this month and another $77 million next year.

But it is young Nick's ASH – Australian Style Holdings – that has pocketed the $4.5 million of Leighton money.

BrisCon and indirectly MacBank and Deutsche can go knocking all the way to the corporate knackery on the ASI door for the $77 million plus $77 million.

But they can't touch the money inside ASH. Game, set and $4.5 million match to young Nick. Absent perhaps an interesting discussion with the tax office.

Did young Nick also stiff his fellow small investors in BrisCon – getting them to turn up to the general meeting yesterday, only to find their votes had been rendered futile by Bolton switching sides?

Instead of his 20 per cent anchoring a successful wind-up vote; it delivered the rejection.

This was exactly captured in BrisCon posting Bolton's letter urging unitholders to vote for the wind-up six days, as we now know, AFTER he had committed to voting AGAINST the wind-up for $4.5 million.

Which is of course precisely why Leighton parted with $4.5 million. It didn't want the actual building of the toll way to be caught up in all the mess of a BrisCon wind-up.

Yes, in theory unitholders would still have been liable for the $1 a unit – the judge made it clear that would be the case yesterday.

And, yes, MacBank and Deutsche would still have been liable to make up any money not paid by unitholders. And then be able to chase those defaulting unitholders all the way to bankruptcy.

But it would have been at best messy; and almost certainly have cost Leighton more, much more, in legal and other costs. With some serious uncertainty over ultimate outcomes.

MacBank and Deutsche are not so lucky. They are up for as much as $387 million on the payment at the end of the month. That's if all unitholders failed to pay their $1 a unit.

While that's unlikely, they they know full well they are going to have to cough up $77.4 million that Young Nick won't be paying. Correction, ASI won't be paying as it probably doesn't even have the proverbial brass razoo.

In doing so they will reap the whirlwind of sowing a boom-time breeze – a defective almost Ponzi-like product that to the ASX's expanding disgrace and incompetence but not seemingly its corporate embarrassment, it endorsed.

In a moral sense Bolton clearly stiffed his fellow small holders. They were the cannon fodder in the game of poker he was playing with Leighton, MacBank and Deutsche.

He gets the $4.5 million; they get stuck with the $1 a unit to pay, all the way up to personal bankruptcy.

In a practical sense though, he hasn't cost them. Indeed, he nearly got them off.

The poker was played all the way up to yesterday's day in court and the meeting. That was when MacBank was desperately trying to put a deal together to take small investors out and to avoid a wind-up.

If MacBank had succeeded, Bolton would have been their hero. But either way it had to be done before the meeting.

If the meeting HAD voted for a wind-up, that would have been the end of any MacBank deal.

Now that there's no prospect of a wind-up, there's also no point in MacBank buying anyone out.

Either way it – and Deutsche – have to make up any shortfall. At least they will have units of some value in a going concern. As opposed to having almost certainly valueless units in a BrisCon in liquidation.

In simple terms then, Bolton's turnabout hasn't cost other unitholders and might even have preserved some value for them.

It's cost Leighton $4.5 million directly and MacBank/Deutsche $77.4 million they will have to outlay on his units. The buying of which was crucial to give Bolton the aces in his high-stakes game.

Assuming it works. That the liability stays with "I" and the Leighton money stays in "H".

Critically "I" did not sell the units to Leighton. If it had it would have had to take the Leighton money. And then pass it to BrisCon, reducing a tad the MacBank/Deutsche liability.

All "I" did was to agree to vote in a certain way and "request" Leighton to pay the money to "H". The key is presumably that "I" has no legal basis for claiming that money back.

So when as inevitably happens, "I" goes into liquidation, even the liquidator can't get any money from "H". As "H" doesn't owe it to "I".

Nick sets out to bankrupt BrisCon. In the process of failing, bankrupts his own "I" company – while enriching his other "H" company. To the big boys' cost and the ASX's shame.

 

[MeToo]

Not sure whether this question has been asked or answered, but as April 21st is coming real soon (next week), I just have a question regarding the liability.

According to Brisconnections communications, 21 April is date when liability for payment is determined.

As I have already signed an acceptance form to sell my share to a third party, if the transfer has not occurred before 21 April, then I am liable for the $1 call. If the transfer occur after 21 April, does it mean the new owner is not liable, but I am still liable.

IE, if transfer after 21 April, I need to pay $1 but at the same time I don't have any shares anymore.