Equititrust?

Its Already A loss

Isn't a revaluation of the units in the fund a loss ?? That’s imminent as red flagged by Equititrust.

So in light of this revelation isn’t it better to be prepared and have lawyers ready to take action.. The fact that they may use investors’ money to effectively battle with them in court is no shock, it is to be expected from Equititrust. They have gambled investors’ money on King Con so why not on a court case if it prolongs their ability to stay alive.

Investors have no faith in Equititrust simple as that.. The line has been crossed.. If they did the matter would not have progressed to Piper Alderman..

Re: Its Already A loss

No Trust said:

Isn't a revaluation of the units in the fund a loss ?? That’s imminent as red flagged by Equititrust.

So in light of this revelation isn’t it better to be prepared and have lawyers ready to take action.. The fact that they may use investors’ money to effectively battle with them in court is no shock, it is to be expected from Equititrust. They have gambled investors’ money on King Con so why not on a court case if it prolongs their ability to stay alive.

Investors have no faith in Equititrust simple as that.. The line has been crossed.. If they did the matter would not have progressed to Piper Alderman..

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Yes, it is - but impairments are accounting mechanisms and not actual losses. Clearly it's going to depend on the degree of impairment - a small impairment might be overcome, but a large impairment is most unlikely to be overcome.

Yes, it is better to take steps to protect your interests - it is the right thing to do.

Re: Piper Alderman Class Action Latest Update: CLASS ACTION

Lets agree to disagree. As you say the Fund is governed by Corporations Law. Directors of the Responsible Entity are even more in the firing line. Whilst i don't like where i am sitting right now and agree with you on that point, i a very firm on the point that we can take the legal action the whole distance.

ASICK said:

Kostag, I appreciate your sincerity but your fund IS NOT a company - it's a trust governed by its constitution (and the corporations act).
There is no INSOLVENCY - investors are the only ones who will lose money.
The simple reality in managed schemes is that it will always be investors who cop the final loss on the chin.
With respect, I don't believe investors even begin to look like having a case unless a loss has occurred to their capital or perhaps to their distributions - Further, and in any event, it will probably be the case that the manager will be entitled to use the fund's money to defend an action against it.
Please go and pay for some independent legal advice.

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Any Update on the Investor meeting this morning

I have read all of your postings since this mess began and my family are also, sadly, caught up. Has anyone attended the meeting this morning and can you give me an overview, particularly any news on the Piper Alderman Class Action progress and Directors response to a "hostile investor audience".

Re: Piper Alderman Class Action Latest Update: CLASS ACTION

kostag said:

Lets agree to disagree. As you say the Fund is governed by Corporations Law. Directors of the Responsible Entity are even more in the firing line. Whilst i don't like where i am sitting right now and agree with you on that point, i a very firm on the point that we can take the legal action the whole distance.

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ok. I'll agree to disagree on the insolvency issue. :bier:

Investor Briefing or Investor Massacre

Bad loans slash Equititrust's value Mitch Gaynor From:

The Courier-Mail April 21, 2011

12:00AM

"INVESTORS caught in the troubled Equititrust mortgage fund have been told they stand to lose up to 20 per cent of the value of their holdings largely because of a loan to two-time bankrupt Dudley Quinlivan."

"Investors, including one 93-year-old man, simply wanted to know if this meant the fund was "going down the gurgler".

"I've lent money for a living for a very, very long time and it's been on the basis of the asset, we've never had the great luxury of penetrating the ... character," Mr McIvor told investors.

"Frankly, banks today barely do that but it certainly will be a significant part of our future."

"Whether these commercial hands are honourable or dishonourable hands has never concerned me, provided we can hurt them more than they can hurt us."

End Quotes

Well well well, investors can now see that their money was in "dishonourable hands". What an idiotic and insensitive statement to make.. I think that the investors getting the lawyers involved when they did was a good move. Equititrust loses 20% of the fund on the likes of King Con and then says oh we didn’t penetrate the character but it will be a significant part of our future... There is no future guys... No one will ever invest with you again you can be assured of that.

In terms of the losses the 20% is an optimistic estimate to placate investors it is not a certainty. Losses could be far greater in a final wash up.. Remember that David Kennedy recently posted on this web site: Post 153 - 16 February 2011

"Would we like to state that investor’s investment is 100% safe? Yes we would but ASIC guidelines restrict us from making such statements."

The statements being made by management are a complete and utter joke, 100% safe on Feb 16 to 20% of the fund down the gurgler on 20 April 2011. What’s the next nightmare announcement.

Then this idiotic statement by Kennedy:

"Mr Kennedy, who himself has a $43 million exposure to the fund, stayed positive, saying the "opportunity" thrust on to Equititrust would bring more opportunities".

From what I can read from this statement the only thrusting has been on the part of Equititrust over the Investors it could not give a damm about in any way. What opportunities??? The only opportunity I see is liquidation of the fund. Is this guy delusional??? There must also be a typo as Kennedy does not have a $43M exposure to the fund.

The financial implosion and investor losses were known to Equititrust and yet they had the temerity to go back to the Australian Public and ask for another 50M in January. It’s no wonder ASIC stepped in and put a stop to the capital raising.

After yesterday's classic Gold Coast White Shoe Brigade effort, the investors know what they have to do now................ and in the words of the founder of Equititrust which will come back to bite him very very hard...



http://www.couriermail.com.au/ipad/bad-loans-slash-equititrusts-value/story-fn6ck2gb-1226042417704

Sydney Morning Herald Article - Investors Losses

Investors warned of 20% losses
Vanda Carson
Sydney Morning Herald
April 21, 20


"THE frozen mortgage fund Equititrust has told furious investors in its income fund that they could lose up to 20 per cent of their investment."

"He offered cold comfort, telling BusinessDay that they would be better off than the tens of thousands of investors in the Gold Coast financial group MFS who received considerably less after it collapsed. Mr Kennedy is the former chief operating officer of MFS."
End Quote

More damming Articles in the National Press.

Investors are sick of being hurt and having their lives torn apart by Equititrust whilst the Directors live in Multimillion Dollar Waterfront and Beachfront Mansions.

Blind Freddy could see what the end result would have been in lending to King Con, yet Equititrust thought King Con was a perfect fit in terms of their spivvy lending practices.

End result investors lose tens of millions of dollars with a promise to “penetrate the borrowers character” in the future.



http://www.smh.com.au/business/investors-warned-of-20-losses-20110420-1dowv.html

Investor Briefing Video - Investors Fear Their Super is Gone

"Investors Fear their Super Is Gone"

Business Day - Video

22 April 2011

"Investors in Equititrust fear their life savings may have evaporated after the property trust froze funds and put a stop to monthly distributions."


Watch this video and listen to what McIvor's paid mouthpiece has to say..

"A Mortgage Fund Structure is Moribund"

So going to the Australian public to raise another 50M from unsuspecting investors was what?? Deceptive Conduct?? Misrepresentation??

Watch Kennedy's body language when he say's we don't attract new investment now, we can't, we certainly wouldn't, we can’t disclose the state of the fund until we get valuations etc. Valuations are you kidding these should have been continuously updated..

Equititrust really has no idea what it is doing; it is a rudderless ship with a Managing Director / Founder who is afraid to face the media. Kennedy was not there when the disaster loans were made, McIvor was..

I again bring to everyone’s attention the $50M Capital raising; so it was ok to entice new unsuspecting retiree investors a few months ago and now it’s not. Of course not, ASIC stopped it AND SAVED A LOT OF PEOPLE.

The saddest element in all this is watching the throngs of retiree investors gather in the lobby with worried looks on their faces, without any income, whilst the “fat cat” management who look extremely well fed collect their fees and salaries.

SHAME EQUITITRUST SHAME​

http://www.google.com/url?sa=t&sour...l-S7CA&usg=AFQjCNH7lyDk0REhI2yehd_ix7bXZagm5g

First of all, I'm really sorry to see members of the fund suffer substantial impairments.

Secondly, it's a shame that ASIC chose to stop the $50m raising (which was a great deal for new investors but not for you) and do nothing to help your investments in the fund.

Thirdly, it's a shame you do have to get engaged with a class action asap because ASIC makes no signal one way or the other that it is willing (or not) to take on the task - bang goes at least 26% of any successful legal claim in fees.

Fourth, the loss has been significant, especially when that loss has absorbed the $40m capital warranty and the $30m outside patch-up job Equititrust Limited did without your knowledge.

There are a lot of legal issues to raise and I certainly wish you all well with them.

I forgot .. strange how many will relish taxable income distributions (if any) while capital is lost, however, I can understand how getting any return from a damaged investment is welcomed.
The ATO doesn't care that you can't offset capital loss with income.
It's not only the scheme themselves that are a risk to the public, so are the tax laws.

ASICK said:

I forgot .. strange how many will relish taxable income distributions (if any) while capital is lost, however, I can understand how getting any return from a damaged investment is welcomed.
The ATO doesn't care that you can't offset capital loss with income.
It's not only the scheme themselves that are a risk to the public, so are the tax laws.

Click to expand...

As posted previously it is also possible be that the postponed distibutions may well be taxable in this tax year due to the ATO's treatment of Trust distibutions as being income once allocated. It would be nice to have this point clarified.

Add this to your point of paying taxation on dividends that would be better treated as capital return and the cash flow situation looks even less appealing. Not to mention the end result from all this may be less cash in our pockets and an unusable tax loss.

klua said:

As posted previously it is also possible be that the postponed distibutions may well be taxable in this tax year due to the ATO's treatment of Trust distibutions as being income once allocated. It would be nice to have this point clarified.

Add this to your point of paying taxation on dividends that would be better treated as capital return and the cash flow situation looks even less appealing. Not to mention the end result from all this may be less cash in our pockets and an unusable tax loss.

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Capitalised interest is something that I'm sure your lawyers will look at very carefully - this is where profits have been derived but no cash has been received. I'm guessing that capitalisation probably goes back to late 2007.

If there was no chance the interest could not have been paid, and if the loans should have been foreclosed, then that would be a BIG problem for the manager (and others).

Then members might see just how much they suffer by having paid tax on income over the years while their investments were in jeapody.

I'll again bring forward the issue of the $30m alleged by the manager to have been paid by Equititrust Limited towards fund impairments which was not brought to your notice at the time the payments were made.

In my view, such a lack of disclosure is a great disadvantage to members because it didn't sound alarms bells to members as to the true state of the fund's loans.

The combination of capitalised interest and non-disclosure have not been kind to members.

ASICK said:

Capitalised interest is something that I'm sure your lawyers will look at very carefully - this is where profits have been derived but no cash has been received. I'm guessing that capitalisation probably goes back to late 2007.

If there was no chance the interest could not have been paid, and if the loans should have been foreclosed, then that would be a BIG problem for the manager (and others).

Then members might see just how much they suffer by having paid tax on income over the years while their investments were in jeapody.

I'll again bring forward the issue of the $30m alleged by the manager to have been paid by Equititrust Limited towards fund impairments which was not brought to your notice at the time the payments were made.

In my view, such a lack of disclosure is a great disadvantage to members because it didn't sound alarms bells to members as to the true state of the fund's loans.

The combination of capitalised interest and non-disclosure have not been kind to members.

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"...If there was no chance the interest could not have been paid ..." should read "... if there was no chance the interest could have been paid. ..."

No return for a year

My predictions on this train smash have been correct since I started this thread June 2010. There will be no capital return for 12months unless we get ASIC or a Court order to appoint an insolvency firm to liquidate the loan book. Second, after costs our units will be down 50cents in the dollar. On $240m lians, they will be atleast $80m down. The attempted $50m raising was an attempted fraud and ASIC will be right onto this.

ASICK said:

I forgot .. strange how many will relish taxable income distributions (if any) while capital is lost, however, I can understand how getting any return from a damaged investment is welcomed.
The ATO doesn't care that you can't offset capital loss with income.
It's not only the scheme themselves that are a risk to the public, so are the tax laws.

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50 Million Dollar Capital Raising

The recent nightmare revelations clearly show the 50 Million Dollar Capital raising was a last ditch attempt to save the fund..

Equititrust is a sinking ship..

Equititrust - Proposed Equity Swap

As reported Equititrust is "Mulling" over an equity swap for shares in Equititrust??

I don’t think investors are that stupid and naive.. Equititrust is worthless without the investors, on their own admission the founders equity has been wiped out, the company is at the mercy of the banks, their reputation is in shatters and investors are pitched yet another pipe dream.

As previously mentioned in February Kennedy was posting on this web site saying investors’ money was 100% safe.. Then look what happened..

Sure Equititrust cannot survive without an Equity swap occurring, they need the investors which they have hurt very badly, however the investors do not need Equititrust anymore and its fast and loose forays of lending tens of millions of dollars to the likes of King Con..

If investors do get their money back at whatever loss to the original face value of the units, they are better off moving on and recovering the rest via the Class Action. To participate in the equity swap I am sure all legal recourse against Equititrust for losses incurred will have to be waived. I dont think investors will fall for this trick.

The 50M capital raising is a prime example of Equititrust knowingly being aware of the losses and 80% of the loans being in default yet going to the unsuspecting public looking for fresh money.

Loyalty to Equititrust by many of the retiree investors has been rewarded with incomprehensible loans to a two time bankrupt. This is unforgivable yet Equititrust is asking investors to stay on the nightmare roller coaster with them.

The Equity Swap just like the 50M Capital Raising is "doomed" and I would not be surpised if the regulator steps in again to put an end to this farce once and for all..

INVESTORS WILL NEVER TRUST EQUITITRUST AGAIN​

A Glimpse Of The Future

CityPac postpones $35m payout
Colin Kruger
Sydney Morning Herald

April 23 2011


If investors need any further evidence as to what they are in for they only need to read the article below in today’s Sydney Morning Herald where Equititrust gets a mention as well.


Equititrust's demise has almost been carbon copy City Pacific. The new manager of the fund is only now looking at starting legal action to recover 100M. It seems the investors of Equititrust are at least a little bit more advanced in terms of a class action being investigated at this stage of the collapse. The rhetoric to investors prior to City Pacific collapsing was similar to that of Equititrust at the moment until the manager was replaced via an investor revolution, something which may not be too far off in Equititrust’s future.


“THE continuing decline of Queensland's property market is extracting a toll on struggling property mortgage funds.”



“Managers of the City Pacific-founded First Mortgage Fund announced they will have to postpone most of an expected $35 million payout to investors due to worsening conditions.”


“The announcement, late on Thursday, followed on from another Gold Coast mortgage fund operator, Equititrust, finally admitting this week that investors in its flagship fund will face a significant loss on their investment. Just a week before, Equititrust cut income distributions to these same investors, whose investment has been frozen since 2008.”



“City Pacific executives are expected to be examined in court over their involvement in the fund's disastrous performance, together with executives from the fund's financier, the Commonwealth Bank, and the accounting giant KPMG, which acted as City Pacific's auditor.”


http://www.businessday.com.au/business/citypac-postpones-35m-payout-20110422-1dram.html

More Problems for Equititrust

The Age

Tough times for new apartments

Apr 23, 2011

And South Yarra's controversial $120 million, 14-level Tresor development, designed by architects Wood Marsh with sculptures by local artist Mira Gojak, faces uncertainty after key development partner Equititrust ceased income distributions on several property funds, prompting threats of legal action from investors.


http://www.optuszoo.com.au/news/state/the-age/tough-times-for-new-apartments/341906

Frozen funds stranded in no man's land

Frozen funds stranded in no man's land
Annette Sampson
Sydney Morning Herald

April 23, 2011



"Cynics argue that fund managers have no real incentive to resolve the problem. They are still collecting their fees and if they opened up to full redemptions, many believe it would be like opening the floodgates, with investors deserting in droves."


As the above excerpt correctly states, investors just want out….., this is what Equititrust and its delusional management just do not get. There will be no equity swap just an opening of the floodgates. Investors will not and cannot be fooled any longer by a company purely interested in its own self preservation..



http://www.smh.com.au/business/frozen-funds-stranded-in-no-mans-land-20110422-1drcj.html

Re: Equititrust - Proposed Equity Swap

No Trust said:

As reported Equititrust is "Mulling" over an equity swap for shares in Equititrust??

Click to expand...

They're taking a leaf out of Citypac's book - that was the first try on, preferential shares in Citypac Limited were to be offered to PFMF investors, a move that didn't go ahead, and if it did, I believe it would have failed miserably.

The next step was to list the fund.

You guys would be wise to oppose both with gusto.