BCS - BrisConnections Unit Trusts

[Julia]

Looking at the top 20 shareholder list for BCSCB it appears that David (JAB_Charity) has not coughed up the $1 second instalment for too many (if any) of his 0.5%+ BCSCA units.

This has all gone silent. Does anyone know if the above suggestion is correct, i.e. David Barrow has not paid the installments? Neither he nor Jim Byrne ever answered my question about nil responsibility on those from whom they took the units.

 

[octain]

Re: Brisconnections shareholders - financial ruin

Simple answer is this:

Set up a $2 shelf company. Process costs about $1000

Do an off market transfer of shares to that company.

The day the installment comes due, declare the company as insolvent and unable to service its debt.

As its director, you did your due diligence to declare as soon as it was known that the company could not meet its obligations, and liability is limited to the original $2.

Heck, you can even get people to pay you to take the shares off their hands, and draw a directors fee before the installments are due

Somehow, I doubt people would get away with this, but I'd say there'd be some catch-all fraud law, instead of a specific law that prevents them doing this.

LOL I think nick bolton might have read this post.

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

LOL I think nick bolton might have read this post.

Either he had more balls than I did, or better lawyers. Or maybe just a more corrupt conscience. Who knows.

Anyway, I doubt my joke was original or innovative. It didn't take a genius to work out that possibility was there. Just as I said, guts and a corrupt conscience.

 

[nathanblack]

any updates on this? are people being persued for money? did JAB and jim make a dime? are the shares value atm?

 

[drsmith]

any updates on this? are people being persued for money? did JAB and jim make a dime? are the shares value atm?

I would say no given that defaulting unitholders have been offered the period up until the public auction this Friday to pay the second instalment.

http://www.asx.com.au/asxpdf/20090522/pdf/31hqglf7ddv8r3.pdf

For JAB and Jim to make a dime directly from the units an auction price above the $1.00 reserve will need to be achieved for the BCSCB units. Based on recent BCSCB sale prices that appears unlikely but the market is very thin. I suspect that the underwriters are hoping to winkle out a few more dollars out of defaulting BCSCA unitholders and perhaps a few fools willing to pay $1.00 at the auction before deciding what to do about the rest. It will be interesting to see if QIC increases it's holding at the $1.00 per unit reserve.

As for Jim's class action that's suffered a significant setback to say the least.

http://www.asx.com.au/asxpdf/20090602/pdf/31hwltkkw9bx0n.pdf

 

[drsmith]

Today's public auction on the defaulted stapled units was, well, err, um, slightly less than successful.

 

[Gazzer]

I was in Brisbane yesterday. I have never seen so many new cranes, trucks & concrete pumps in my life. No wonder they need the money from the shareholders.

 

[Gundini]

I think Humphrey Bear is only interested in being a silent partner.

After reading through the last 30 pages I needed this!......... Thanks lol

I still have a few pages to go... Unbelievable debarkle really...

Imagine if Comsec had a confirmation button stating ther are 2 further payments to be made.

This would make an awesome movie, and I don't know the ending!

Thoughts for those still involved in this saga. Are there any left?

 

[drsmith]

I think this Wednesday (June 17) is D-day for the underwriters to cough up on the instalment shortfall.

 

[Knobby22]

I think this Wednesday (June 17) is D-day for the underwriters to cough up on the instalment shortfall.

They charged the fees for their awful advice. They can take the (very deserved) imp:

 

[Julia]

Apparently the underwriters have duly paid up.
Now I guess we wait to see how diligently Brisconnections chases up the people who defaulted on their payments.

June 19, 2009 SMH

Page 1 of 2 Single page view

TREVOR ROWE, the embattled chairman of BrisConnections, might have reason to sleep a little easier, 11 months after the toll road made its ill-fated listing on the sharemarket.

The road project has confirmed Macquarie and Deutsche Bank coughed up the $278 million shortfall not paid by unit holders to fund the group's second $390 million listed instalment.

The lingering question now will be how hard BrisConnections will chase about 140 defaulting unitholders. These include the purported hedge fund represented by the banned company director Jim Byrnes, the IT entrepreneur Nicholas Bolton and his family friend John Williams, who owes $76 million.

There is also the issue of the ASX having the discretion to delist the company if it deems the trading in its securities too illiquid. Yesterday about $4000 of securities changed hands.

One positive this time around is the illiquid trading could at least stop small shareholders from buying large chunks of the company and exposing themselves to the third instalment.

And, unlike the first instalment which crashed from $1 to 0.1c (allowing shareholders to assume liabilities 1000 times their outlay), shares in the second instalment have only halved in value, meaning it is less likely there will be as many defaulters when the next instalment is due next year. If there is a next instalment.

 

[drsmith]

Apparently the underwriters have duly paid up.
Now I guess we wait to see how diligently Brisconnections chases up the people who defaulted on their payments.

They won't get much if they do.

There's only about 6.5m units outside the underwriters, QIC and HSBC so I suspect a mopping up of minority holders and delisting will be on the cards.

 

[Julia]

It seems Jim Byrne's promises have failed to reach fruition. This is quite interesting from "Business Day".

BrisConnection votes against resolution
June 22, 2009

The managers of troubled toll road builder BrisConnections have survived a bid to oust them, as it was revealed excavation costs for the multi-billion dollar Airport Link project will blow out.

BrisConnections stapled security holders were asked at a meeting on Monday to vote in favour of three resolutions, including one to remove BrisConnections Management Co Ltd (BCML) as the responsible entity of the holding trust.

BrisConnections chairman Trevor Rowe said Brisbane Toll Road Link Pty Ltd (BTRL), which put up the resolutions, was unable to vote as it had failed to pay a second instalment totalling $59.7 million due in April on partly paid stapled units listed on the stock exchange.

Some 106 million or 99.9 per cent of votes cast by stapled security holders were against the removal of BMCL as the responsible entity, with only 10,000 votes in favour.

The second and third resolutions, to appoint Armstrong Corporate Capital Ltd as the new responsible entity and to defer payment of the second $1 per unit instalment, were also voted down.

Businessman Jim Byrnes, who represents BTRL, did not appear at the general meeting in Brisbane.

 

[stoxclimber]

His case was summarily dismissed as well, the one where he alleged the BCS prospectus was misleading.

 

[Julia]

Unbelievably, Jim Byrnes is at it again. The following is from today's "Sunday Mail".

Controversial Sydney businessman Jim Byrnes is offering to help defend Brisconnections investors facing legal claims from the company - for a fee.

Mr Byrnes claims to have been able to "arrange for a firm of lawyers and counsel to act to set aside the statutory demands on a no-win, no-fee basis".

But Mr Burnes is asking for $2000 from corporates and $5000 from individuals.

In a letter to investors he says this is the 'only cost to be funded upfront'.

He asks for it to be paid to Australian Litigation Funders, which is owned by his wife.
BrisCon launched suits to recover unpaid $ 1 per unit instalments from 140 defaulting shareholders on April 29. Mr Byrnes tells individual unitholders that for $5000, Australian Litigation Funders will manage their defences.

There's absolutely no suggestion that the $5000 will cover all costs.

The letter says "it could cost hundreds of thousands of dollars to defend the claims".

But Mr Byrne, who concedes he may be paid by ALF "if ALF asks him to assist it", suggests that by getting together, unitholders may be able to cut their eventual defence costs.

I hope no one falls for this. What a charlatan the bloke is.

 

[Enzyme]

Remember MAFCA - the Multiplex Prime Property Fund - which this thread predicted would become the next Brisconnections?

The old news: Like Brisconnections, MAFCA is a partially paid security. This one with 40 cents to pay. The price had flatlined at $0.001 with no buyers. Anyone who invested $1,000 at that price has a liability of $400,000, and there were plenty of people trading this penny dreadful until the new rules on buying partilally paid securities came into force after the BCS debarkle.

The new news: Nick Bolton has come in and brought 6% of MAFCA. He just brought $16 million shares for $17,000, and got a liability of over $6 million. link

The last I heard of Bolton, Brisconnections were still chasing him for $1.2 million of outstanding debt for a parcel of shares that he missed transferring. When it was suggested that MAFCA would be the next Brisconnections I don't think anyone thought it would be this much like BrisConnections.

 

[JAB_Charity]

...The last I heard of Bolton, Brisconnections were still chasing him for $1.2 million of outstanding debt for a parcel of shares that he missed transferring.

Hello Enzyme,

I was sitting near Nick Bolton in the Victorian Supreme Court last week and he looked like a man who was being chased by BrisCon for two claims totaling $1.3m ($100k raise on your estimate) and perhaps contemplating a creeping move on Multiplex.

Regards,
David

 

[drsmith]

Remember MAFCA - the Multiplex Prime Property Fund - which this thread predicted would become the next Brisconnections?

Reading the MAFCA June 19 fund update one gets the impression that unitholders are being softened up for an early call on the $0.40 final instalment.

It would be interesting to know whether or not payment of this instalment is underwritten.

 

[JAB_Charity]

It would be interesting to know whether or not payment of this instalment is underwritten.

Hello Drsmith,

MAFCA instalment is not underwritten. Responsible Entity (RE) bears the burden of defaulted calls.

See:

PDS Link

Constitution Link


Enzyme, MAFCA-messenger, any insights on how it might play?


Doesn't look like the MAFCA registry has many low value, high volume holders (as inferred from the trading record), unlike BrisCon situation. That is other than Nicholas Bolton.

Buyers are in the MAFCA market at $0.001 for 20mil units -- but the sellers are not getting out at the moment.

Regards,
David

 

[JAB_Charity]

As far as instalment procedures are concerned, BrisCon is an interesting comparison to MAFCA.

(A) The BrisCon Trust Constitutions [see Link and Link for identical article in the Investment and Holding Trusts]

...state in article 4.9(e) that the Manager "may" set a reserve price at auction as then set out in sub-articles 4.9(e)(a) and 4.9(e)(b)

...when article 5.7(b) of the Underwriting Agreement states that the Manager "will" set a reserve price at auction as then set out in sub-articles 5.7(b)(i) and 5.7(b)(ii).

(B) The BrisCon Trust Constitutions also

...state in sub-article 4.9(e)(a) that the reserve price at auction will be at a price "not exceeding" the amount then set out

...when sub-article 5.7(b)(i) of the Underwriting Agreement states the reserve price at auction will be "equal to" the amount then set out.


Note: "may" is not "will"

...and "not exceeding" is not "equal to" -- even though the destination may end up being the same, the possible journeys are many and varied when you are a prospective BCSCA investor looking forward, and relying on the Investment Constitutions in good faith, as to how a Public Auction ought to be reasonably run.


It's also quite a journey to find the UnderWriting Agreeement in the public domain, as it does not appear on the BrisCon home webpage or in any ASX announcement.

Here are some travel directions [in 10 steps]:

Download Pathway
to Underwriting Agreement
from BrisConnections home website


(1) Brisconnections.mht

http://www.brisconnections.com.au/

(2) The Project.mht

http://www.brisconnections.com.au/default.aspx?tabid=55

(3) City North Infrastructure - Mind meets Matter.mht

http://www.citynorthinfrastructure.com.au/

(4) "Click here for more on CNI PROJECTS" button

(5) City North Infrastructure - Airport Link, Northern Busway (Windsor to Kedron) and Airport Roundabout Upgrade.mht

http://www.citynorthinfrastructure.com.au/home/home.html

(6) MEDIA & PUBLICATIONS

http://www.citynorthinfrastructure.com.au/media_and_publications/project_documents.html

(7) Project Documents

(8) Consortium Project Documents

(9) EQUITY DOCUMENTS

(10) DOWNLOAD: Underwriting Agreement - 3,510 Kb

http://www.citynorthinfrastructure....ts/equity_documents/underwritingagreement.pdf

Regards,
David