BCS - BrisConnections Unit Trusts

[Prospector]

Humphrey B Bear, being a talent from Adelaide is in the process of being declared Bankrupt!

 

[nathanblack]

Thanks Jim for your quick response. It seems your client has thought it through nicely and buying bigger parcels is cost effective for you AND will result in the best outcome for holders.

A win-win situation in anotherwise messy pile of $hyte.

Goodluck with the transfers, i hope you reach your target and i hope your offer reaches as many people as possible.

 

[drsmith]

mate could you at least use a nice picture .
am old
am grey :
am well, fat
but still vain
jim

I chose that one for of all things the smile. David's pic was the hardest as Paint would not open the image from his charity's website.

I did consider putting Georgia Bolton in there as well but quickly realised the rest would not have been noticed (at least by male readers).

 

[JAB_Charity]

Re: BCS - Charity ($?)Consideration

Hello All,


There have been some good questions on the forum regarding the need for Consideration in the transfer of shares by way of donations to a Charitable Trust.


It is well established in contract law that Consideration is something of value that moves from the promisee (giver) to the promisor (receiver). And that Consideration is an essential element of a valid contract.


In the case of commercial share transactions: Consideration can be the value of the shares in exchange for $cash.

In the case of a gift to a Charitable Trust: in these transactions the Consideration can be the value of the shares given in exchange for the positive benefit (sense of good feeling, for instance) that comes from providing a gift to a worthy cause -- it could even be described as the 'promise' to have an opportunity to do an act of giving that helps others beyond ourselves.

So Consideration is not limited to payment in $cash. It is value -- operating broadly -- that is essential.


Take a look for instance at the ASX Standard off-market share transfer form.

See point 9. Consideration $A

Note also the standard terms of transfer wording:

I / We the registered holder/s and undersigned seller/s for the above consideration do hereby transfer to the above name/s hereinafter called the Buyer/s the securities as specified above standing in my/our name/s in the books of the above named Company, subject to the several conditions on which I/We held the same at the time of signing hereof and I/We the Buyer/s do hereby agree to accept the said securities subject to the same conditions. I/We have not received any notice of revocation of the Power of Attorney by death of the grantor or otherwise, under which this transfer is signed (if applicable). To sign as power of attorney you must have already lodged it with the registry or your broker as appropriate or enclose a certified copy with this transfer.

Now compare this to the sorts of share transfer forms at the Sharity -- "Shares to Charity" website:

http://www.sharity.com.au/share_from.html

For instance, download the Salvation Army Share Transfer Form

Note again the standard terms of transfer wording:

I/We the registered holder(s) and undersigned Seller(s) for the above consideration do hereby transfer to the above name(s) hereinafter called the Buyer(s) the securities as specified above standing in my/our name(s) in the books of the above named Company, subject to the several conditions on which I/we held the same at the time of signing hereof and I/we the Buyer(s) do hereby agree to accept the said securities to the same conditions. I/we have not received any notice of revocation of the Power of Attorney by death of the grantor or otherwise, under which this transfer is signed.

But notice that there is no box in which to place $consideration amount on the transfer shares to Charity form.


This is because $cash consideration is not required to cement a contractual exchange of shares by way of a charitable donation.


It is value that is important -- which can include those benefits that flow from the very kernel / heart of what it means to make a gift.


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

http://barrow.org.au/

 

[Julia]

An interview with Andrew Fraser, Qld Treasurer, in conversation with the blokes from Business Spectator, on the Qld Government's role in the ongoing fiasco.

http://www.businessspectator.com.au...-FRASER-pd20090416-R66MX?OpenDocument&src=kgb

 

[drsmith]

An interview with Andrew Fraser, Qld Treasurer, in conversation with the blokes from Business Spectator, on the Qld Government's role in the ongoing fiasco.

http://www.businessspectator.com.au...-FRASER-pd20090416-R66MX?OpenDocument&src=kgb

If this does come down to the ultimate game of chicken it will be interesting to see who blinks first. The government or Macquarie.

 

[nathanblack]

JAB, can donors claim a tax deduction for donating to your trust? if so what value is placed on the shares donated? the last traded price perhaps $0.001per share?

The most important thing right now is for as many retail holders as possible to dispose of there shares. You and Jim Byrnes are possibly the only two methods now. I urge all holders to dispose of there shares/liability.

But at some point there are tax implications. The donation will trigger a capital gail/loss event, so a value must be placed on them in order to claim a real loss or to claim tax deduction for there donation.

 

[sails]

From The Age: Brisconnections investment pay off: CEO

Brisconnections investors who stick with the troubled $4.8 billion project will be rewarded in due course, CEO and general manager Ray Wilson says.

Soothing words for investors with money, but no mention of the fate of mum and dad investors who can't pay up...

 

[JAB_Charity]

Hello Nathanblack,

JAB, can donors claim a tax deduction for donating to your trust? if so what value is placed on the shares donated? the last traded price perhaps $0.001per share?

The original purchase price of Shares may also be eligible for a tax deduction for the donor of up to $5,000. See this ATO Link for more details.


In short: the donation is valued at the date of transfer (inc based on the last closing price).


So at $0.001per share the unitholder would need 5mil units to achieve the full $5,000 tax deduction

But at some point there are tax implications. The donation will trigger a capital gail/loss event, so a value must be placed on them in order to claim a real loss or to claim tax deduction for there donation.

In the absence of on-market prices the unitholder may care to value the units for CGT purposes at the last known trading price.


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

http://barrow.org.au/

 

[jim Byrnes]

David, Mate i don’t want to rain on your parade .But you keep refereeing to contract law and so forth.
One of our companies Co Directors is a retired Tax Qc who i meet regularly to go over litigation matters.

If the transferor places a nil value on the transfer, then there is nil consideration and this causes all sorts of issues.
What act are you talking about? Please be specific. Act, corporations act , tax act , ??
Do you have a tax ruling re donation at nil value?
Mate i think its a great idea, just needs to be properly constituted by some clever lawyers .
Who devised this scheme?
What law firm has certified what you’re doing?
What tax account has signed of?
are you subject to an Audit , if so has your auditor signed of .

Personally i think they are not charitable donations they are gifts to a charity.
if so there is a few problems and i think the transaction is subject to unwinding .
Hope i am wrong.
Who signed of on this?
Mate you need to clarify this.

We went to great lengths to get our docs water tight
Whitens certified everything, they are specialist and accredited experts in this field.
Ray Whitten was the chairman of the NSX .

Who prepared your agreements

 

[jim Byrnes]

for the record.
Brisbane Toll road link can purchase this weekend only up to 20million units
prefer parcels of 500k and up wards
we can effect all transfers on monday and tuesday
people who email me on j.byrnes@alfpl.com
will get an offer in the morning early with a transfer .
we reserve the right to levy a charge on any parcels under 500,000 and or reject purchases of same

so were on the same page
500k or more no charge we pay you
under 500k we MAY ask you to pay $1,000 which will go to the litagation funder . We will waive this cost to pensioners

 

[nathanblack]

If the transferor places a nil value on the transfer, then there is nil consideration and this causes all sorts of issues.

The JAB link seems to explain it.

See this ATO Link for more details.
http://ato.gov.au/nonprofit/content.asp?doc=/content/61197.htm&page=1#P181_10545

It is a tax deductible "gift". and the value/consideration is the last traded price($0.001) up to $5000.

and the consideration given from JAB to the donor is satisfaction of knowing they have donated to a worthy cause.

 

[jim Byrnes]

The JAB link seems to explain it.

See this ATO Link for more details.
http://ato.gov.au/nonprofit/content.asp?doc=/content/61197.htm&page=1#P181_10545

It is a tax deductible "gift". and the value/consideration is the last traded price($0.001) up to $5000.

and the consideration given from JAB to the donor is satisfaction of knowing they have donated to a worthy cause.

That does not help
The company has not been listed for 12 months .This means that these shares is outside of the charitable mandate

 

[sails]

Jim, what happens with scared mums and dads who might have transferred their units to fake names such as Humphrey, Bud Gerigar, etc, but who might now think it is safer to transfer them to you? How do you accept a transfer from a fake identity? Or do they have to transfer back to themselves before you can take them?

It was just a passing thought I had this morning - and there may not even be any in this position, but if there is, I wondered if it's a question some might be afraid to ask.

It's hard to believe anyone would transfer shares to clearly fake names in the first place, although fear and desperation can severely cloud thought processes.

 

[JAB_Charity]

The JAB link seems to explain it.

See this ATO Link for more details.
http://ato.gov.au/nonprofit/content.asp?doc=/content/61197.htm&page=1#P181_10545

It is a tax deductible "gift". and the value/consideration is the last traded price($0.001) up to $5000.

and the consideration given from JAB to the donor is satisfaction of knowing they have donated to a worthy cause.

Thanks Nathanblack -- yes that is correct.


The ATO info is a bit confusing [I will write to them to suggest that the ATO make this info clearer as I have done on a number of times in the past on other issues]...


..yes -- it's a bit confusing when ATO says that it is a condition of the tax deduction that "the shares were acquired at least 12 months before they were gifted"...

...ATO is referring then to a valuation based on the on-market (or last traded price) of the shares at the time of the transfer. This applies to shares held great than 12 months.


Where the shares have been held for less than 12 months -- [and to be clear these shares can be gifted to a charity] -- then the valuation of the income tax deductible donation is as follows per ATO website:

If the donor acquired the shares during the 12 months before making the gift, the amount of the gift deduction is the lesser of the market value of the shares on the day the gift was made, and the amount paid for the shares.

* Of course: As with all financial and legal matters investors should obtain their own independent professional advice *


Hope this make things clearer.


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

http://barrow.org.au/

 

[JAB_Charity]

Macquarie buys out its private BrisConnections investors

Macquarie buys out its private BrisConnections investors

http://www.businessspectator.com.au...Connections-inv-pd20090418-R7MR7?OpenDocument

The Spectators 3:14 AM, 18 Apr 2009 [quoted in full -- in public interest]

Macquarie Group Ltd is quietly bailing out its private clients who hold BrisConnections stock to relieve them of their liabilities, The Weekend AFR reports.

According to the newspaper, the investment bank is understood to be buying out its clients of the stock it once promoted, but now privately acknowledges to be toxic.

Chief executive Nicholas Moore is believed to be personally involved in efforts to rescue anxious retail investors.

Meanwhile, rebel shareholder Nicholas Bolton has spoken out against critics that accused him of abandoning other distressed investors in the beleaguered tollroad project.

A wind-up motion brought against BrisConnections by Mr Bolton was defeated after he sold his votes to Leighton Holdings for $4.5 million.

"To the extent there was an altruistic outcome it was unintended, in that my interests were aligned with the interests of all other unit holders," Mr Bolton told Fairfax.

"But there was always a commercial intention on our part. We didn't seek the tag of white knight, and it doesn't fit."

Mr Bolton and BrisConnections chairman Trevor Rowe have traded barbs, both accusing each other of proposing monetary offers.

The fiasco has drawn the attention of the market operator and corporate regulator.

According to The Australian, the Australian Securities and Investments Commission has reached a preliminary position that BrisConnections and Leighton Holdings Ltd had complied with continuous disclosure obligations.

 

[sails]

Re: Macquarie buys out its private BrisConnections investors

Macquarie buys out its private BrisConnections investors

http://www.businessspectator.com.au...Connections-inv-pd20090418-R7MR7?OpenDocument

The Spectators 3:14 AM, 18 Apr 2009 [quoted in full -- in public interest]

It begs the question why they didn't do this months ago instead of leaving mum and dad unit holders terrified for so long. But perhaps its more to do with the pressure of unit holders transferring to the three Bs?

 

[nathanblack]

Re: Macquarie buys out its private BrisConnections investors

It begs the question why they didn't do this months ago instead of leaving mum and dad unit holders terrified for so long. But perhaps its more to do with the pressure of unit holders transferring to the three Bs?

i doubt unit holders transferring to the three Bs is creating pressure. MAQ would want as many units as possible to find there hands into people that intend to pay the installments. After all they are underwritters and will make up any shortfall.

doing it earlier would have prevented bolton having such a strong hand. by the end of this saga there will be a few holders controling 90% of the project.

i dont think they did this because of pressure. they probably just realise its there obilgation. they are finally doing the right thing. maybe pressure of bad publicity but atleast there doing it.

 

[JAB_Charity]

Macquarie bails its clients out of BrisCon

Macquarie bails its clients out of BrisCon

Saturday, 18 April 2009 -- The Australian Financial Review -- Jacqueline Maley

[quoted in full -- in public interest; check against original]


Macquarie Group is quietly buying out the BrisConnections stock held by its private clients to relieve them of the liabilities due on securities the investment bank once promoted but which it now privately acknowledges to be toxic.

The Weekend AFR understands that, when the BrisConnections register closes next Wednesday ahead of the $1-per-unit call on the now worthless stock, Macquarie will have taken out its private wealth management clients via a series of private transfers.

BrisConnections units are listed at .01c, the lowest price possible on the Australian Stock Exchange. They have not traded on market since Macquarie bought 31.4 million units on market on March 31 - an 8 per cent share that would have blocked the wind-up vote proposed by BrisConnections' renegade major investor, Nicholas Bolton.

In the end the vote, held on Tuesday, was in no danger of passing because Mr Bolton sold his proxy votes for $4.5 million.

Macquarie's latest acquisition will add another 2 to 2.5 per cent to its existing share of BrisConnections, taking its holding to about 10 per cent and lifting its exposure by tens of millions.

The buy-up amounts to a tacit admission that the $4.9 billion BrisConnections project, which Macquarie put together, sponsored and underwrote, has been an abject failure.

It is believed Macquarie chief Nicholas Moore is under great pressure to resolve the fiasco and has become personally involved in moves to rescue distressed retail investors unlikely to meet the calls on their units.

Some sources claim Macquarie brokers were pressured into pushing BrisConnections scrip on to its private clients. The bank, being an underwriter to the project, reportedly was keen to avoid a shortfall in the original float. Last year a Macquarie spokesman said several funds managed by Macquarie independently decided to take positions in the July 2008 float.

Macquarie faces mounting exposure on the troubled project. In a related development, it is believed the Australian Securities and Investments Commission (ASIC) will scrutinise the legality of the deal struck between BrisConnections' builders Leighton Holdings and Mr Bolton ahead of Tuesday's shareholder meeting. Mr Bolton owned his stock through Australian Style Investments, but Leighton paid the $4.5 million into another of his companies, Australian Style Holdings.

It is possible Mr Bolton breached his director's duties in making this arrangement. This in turn raises concerns that Leighton may have been complicit in a breach of the Corporations Law. Meanwhile ASIC warned investors it was illegal to transfer shares to fictitious persons, a ploy it is believed some BrisConnections investors might have been considering to avoid paying next week's call.

 

[sails]

Re: Macquarie bails its clients out of BrisCon

Macquarie bails its clients out of BrisCon

Macquarie Group is quietly buying out the BrisConnections stock held by its private clients to relieve them of the liabilities due on securities the investment bank once promoted but which it now privately acknowledges to be toxic.

The Weekend AFR understands that, when the BrisConnections register closes next Wednesday ahead of the $1-per-unit call on the now worthless stock, Macquarie will have taken out its private wealth management clients via a series of private transfers.

and

Macquarie's latest acquisition will add another 2 to 2.5 per cent to its existing share of BrisConnections, taking its holding to about 10 per cent and lifting its exposure by tens of millions.

That article gives a bit more info and looks like they are only buying out their private clients - possibly original IPO purchasers?