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.