GTP - Great Southern Plantations

KJL · 28 May 2009

Couple of issues

1. Edliw:

edliw said:
anyone get any information on the web site being set up for the MIS investors. Out of 43000 investors, if we can bring enough together, at $100.00 per head won't take long to have a good fighting fund. Then need to find a sharp legal rep

Sydney firm Slater & Gordon are looking at the merits of a class action case, then potentially seeking assistance from a litigation funder - ie someone who pays for or funds the litigation in return for a slice of any recoveries. If anyone's interested the S&G site to register on is: http://www.slatergordon.com.au/contactus.aspx

2. Did anyone else borrow from GS, only to have loans "transferred" to Bendigo last month (ie when GS knew they were going down the pan)?

I've written to ASIC and to Senator Sherry asking that this aspect be reviewed - ie the loans are sold on for 38c in the dollar, and we mug investors have to repay the loans for the next 10 yrs without any income to do so?

If you have been so treated, then I encourage you to write to your senator, MP, ASIC and newspaper because this is a rort if ever I saw one.

Kev

The Shadow · 28 May 2009

KJL said:
Couple of issues

2. Did anyone else borrow from GS, only to have loans "transferred" to Bendigo last month (ie when GS knew they were going down the pan)?

Kev

Kev,

I too have a couple of GS loans now with Adelaide and Bendigo Bank.

The additional problem we are now also facing is that these jokers are looking to enforce significant breakcost/payout penalties.....can you believe it!

I have had my loan agreements reviewed and there is nothing mentioned about breakcosts or payout penalties or the method of calculating these. In fact at the time i invested I was told quite categorically by the GS Representatives and GS Employees that there are no payout penalties and I could payout any time!!

In fact a few of my freinds paid out their loans about 6-8 months ago without these excessive costs.

I have written to the Adel/Bendigo Bank advising them that I will seek legal action and informing them of the precedence they have set with my friends loans.

I am yet to get a response......funny that.

Shadow.

brty · 28 May 2009

The Shadow,

I have had my loan agreements reviewed and there is nothing mentioned about breakcosts or payout penalties or the method of calculating these

Why don't you just ask them to point out in your contract where it says they can charge you. If it is not there, they are likely to back down quickly. If they don't, the banking ombudsman would become very interested very quickly.

brty

KJL · 28 May 2009

The Shadow said:
I too have a couple of GS loans now with Adelaide and Bendigo Bank...

...I have written to the Adel/Bendigo Bank advising them that I will seek legal action and informing them of the precedence they have set with my friends loans.

I am yet to get a response......funny that.

Shadow.

Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action.

One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.

So getting any break costs back from you should be the leats of Bendigo's worries!

I think this as an issue needs greater exposure just in itself. Otherwise, we'll be paying a lump sum for jack squat.

Forenth · 28 May 2009

KJL said:
I've written to ASIC and to Senator Sherry asking that this aspect be reviewed - ie the loans are sold on for 38c in the dollar, and we mug investors have to repay the loans for the next 10 yrs without any income to do so?

If you have been so treated, then I encourage you to write to your senator, MP, ASIC and newspaper because this is a rort if ever I saw one.

Kev

I wrote to all of the above about project transform and the 'majority yes we take the no voters as well' problems, as well as the complete ripoff of the offer being made. I wrote to some of them several times, as well as current affairs shows, all the major capital newspapers etc and I got exactly NO responses and there was NO coverage. This was back in October / November.

I warned of all the financial probs it would cause investors and even mentioned an HIH - like devastation.

Try contacting them but they all put their heads in the sand months ago.

KJL · 28 May 2009

Forenth said:
I wrote to all of the above about project transform and the 'majority yes we take the no voters as well' problems, as well as the complete ripoff of the offer being made. I wrote to some of them several times, as well as current affairs shows, all the major capital newspapers etc and I got exactly NO responses and there was NO coverage. This was back in October / November.

I warned of all the financial probs it would cause investors and even mentioned an HIH - like devastation.

Try contacting them but they all put their heads in the sand months ago.

Forenth - don't lose hope! Project Transform was (as I undertstand it) an attempt by GS to trade themselves out of trouble, and in such circumstances there is a limit ASIC could do about a company doing its own thing.

I acknowledge you've been proved right though.

But the issue now is that GS is now likely to go under, indeed liquidation is one of the only 3 possible outcomes of an administration, the other two being a DOCA or (God forbid) handing the entity back to management. Now the receivers are involved, my view is that DOCA or a return to management is not likely, and the liquidator (if GS do go under) has various powers to wind back transactions. So all is not lost yet.

But we can and should keep the heat up on this!

Kev

Johnathon123 · 29 May 2009

KJL said:
Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action.

One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.

So getting any break costs back from you should be the leats of Bendigo's worries!

I think this as an issue needs greater exposure just in itself. Otherwise, we'll be paying a lump sum for jack squat.

I have been down this road with Adeliade Bendigo bank - There customer service was horrific. I was origonally told there would be no break costs. I then set about arranging alternative finance and three days later was told I would have a break fee of about 10% of the loan value.

Apparently the contract provides:

4.4 Early repayment

Early repayment of the Principal Sum may not take place except as permitted by the Lender, and the Borrower acknowledges that the Lender may charge the Borrower its costs and expenses (including any break fees or break costs for which the Lender may be liable however arising) and an administration fee connected with early repayment.

I asked them for a breakdown of the break fee and was not provided any meaningful response

I have now received 6 different break costs all of which are different (even when provided on the same day through different channels)

My next solution is to stop payments and at least force someone with authority to talk to me. Anyone had any luck here?????

On the issue of transferring to Adelaide Bendigo it would seem that the contract allows for this where it says

The lender may at any time assign or otherwise transferall or any of its rights, and may transfer any or all of its obligations under this document (including the benefit of a charge) etc etc

drsmith · 29 May 2009

The segment of Chairmans Address from the webcast of the creditors meeting (from about 59 minutes to about 72 minutes, including the flow charts) is what I would regard as worthwhile viewing for MIS holders.

This covers the relationship between the MIS investments and the RE and how individual MIS viability will be assessed.

KJL · 29 May 2009

Johnathon123 said:
On the issue of transferring to Adelaide Bendigo it would seem that the contract allows for this where it says

The lender may at any time assign or otherwise transferall or any of its rights, and may transfer any or all of its obligations under this document (including the benefit of a charge) etc etc

Jonathan

The issue here is WHEN did this occur. Just because the provision exists in the contract does not mean it was validly exercised. If GSFPL were insolvent when the transfer occurred (and it is not public knowledge when this transfer date was but current best estimates say that it was sometime in April 09) then that transfer may not have been valid and can be unwound.

It wouldn't be appropriate to disclose my legal advice too early, but there is also an argument to say that investors may be able to simply stop paying (ie cancel your direct debits). I'll keep you posted and might be able suggest the same law firm if it anyone else is interested in that path.

The way I see it, a few hundred $$$ in legals is worth gambling rather than re-paying loans for 10 yrs and getting nothing in return. However, I should emphasise that this is NOT legal advice, nor is it a path I advice you take without seeking your own independent legal advice.

Good luck all.

SDE · 30 May 2009

KJL said:
Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action.

One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.

So getting any break costs back from you should be the leats of Bendigo's worries!

I think this as an issue needs greater exposure just in itself. Otherwise, we'll be paying a lump sum for jack squat.

I think you are missing the point.

A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership.

Default to either will be pursued, with the seizure of the debtor's other assets, including homes, likely.

Default at your own peril

Johnathon123 · 1 June 2009

SDE said:
I think you are missing the point.

A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership.

Default to either will be pursued, with the seizure of the debtor's other assets, including homes, likely.

Default at your own peril

Isnt the other issue that the loans are all secured against the trees. Adelaide/Bendigo bank stand to own a great swag of the MIS investment. What is the value of those trees for the purpose of any guarantee they may seek to enforce against the borrowers. DO they have to wait for the loss to be realised once the trees are harvested and they have a $$ value or can they attach a nominal valuation to them today if we default under the loan agreement.

It looks messy and I agree with the general theme of the thread if we default Adelaide and Bendigo Bank are not going to go quietly into the sunset however a good lawyer might be able to find away around this.

I am not advocating either course nor giving legal advice just seeing both sides of the coin on this one.

bv2726 · 1 June 2009

Johnathon123 said:
Isnt the other issue that the loans are all secured against the trees.

Dont forget the cattle investors. Some have debts that they took out to buy cattle, which were seized and swapped into shares, which are now worthless and most likely will remain worthless. So in this situation, some folks would be paying off debt to the bank for one reason - to maintain their credit rating/assets...

Johnathon123 · 1 June 2009

bv2726 said:
Dont forget the cattle investors. ...

Yes you are right - Often find it difficult to see the wood for the trees
I think that situation with "transform" is outrageous

Johnathon123 · 1 June 2009

My "advisor" keeps pointing me to "The Managed Investments Act"

Has anyone else had a look at this one

http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/E5DC53FA3909BCECCA256F7100522C95/$file/ManInv98.pdf

SDE · 1 June 2009

Johnathon123 said:
My "advisor" keeps pointing me to "The Managed Investments Act"

Has anyone else had a look at this one

http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/E5DC53FA3909BCECCA256F7100522C95/$file/ManInv98.pdf

The Act that you "advisor" refers to has been consolidated into the Corporations Act.

This occurred in 2001!

Your "advisor" is well behind the times. (and probably still thinks that MIS investments are great)

edliw · 1 June 2009

Rumour management buy out.

Moves for a Co-Op buy out could upset them and has, if interested contact

townshend@immm.com.au

Pass it onto any one you know that is involved in GTP & MIS

KJL · 1 June 2009

SDE said:
I think you are missing the point.

A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership.

Default to either will be pursued, with the seizure of the debtor's other assets, including homes, likely.

Default at your own peril

Yep, SDE, a debt is a debt, but not if it's ultimately judged to never have been a valid debt in the first place. For example, if we MIS investors had acted in reliance on representations by GS that were incorrect (eg, projected yields, subsidising existing projects with income from future projects) then that loan may be void ab initio, ie as if it were never entered into.

This is a separate point to the issue of to whom the debt is owed. If it's owed to a liquidator then I'd feel more comfortable telling them to get nicked (in return for my 20yrs of zero return) than I would telling Bendigo had it been validly assigned to them prior to GS's insolvency.

Although your reply to Jonathan's FA made me smile and tells me you know what you're talking about

In short, my position is that there is much to be discovered about this matter, and it may be that all is not as it currently seems.

jiml · 2 June 2009

KJL Is there evidence to back the sale of loans to Bendigo/Adelaide Bank for 38c? Surely, who ever 'owns' the loans must abide by the conditions set out in the original agrement?

Johnathon123 · 2 June 2009

jiml said:
KJL Is there evidence to back the sale of loans to Bendigo/Adelaide Bank for 38c? Surely, who ever 'owns' the loans must abide by the conditions set out in the original agrement?

Adelaide/Bendigo are denying the acquisition at 38c in the dollar

see: www.crikey.com.au

Will Rayner, Head of Investor Relations, Bendigo and Adelaide Bank Limited, writes: Re. “Bendigo and Adelaide should come clean on MIS” (yesterday, item 26). In response to your article we make the following points…

Bendigo and Adelaide Bank has lent to more than 8000 individual credit-worthy borrowers who have subsequently invested in Great Southern MIS schemes. We continue to work with our customers to deliver the best outcome for all parties. We are closely monitoring the performance of each loan, and are in the process of contacting each customer to discuss their loan and their options going forwards. As per normal practice, provisions and write-offs are calculated on a loan-by-loan basis. We will continue to manage this portfolio in a similar manner.
While we remain vigilant about the performance of these loans, we are ultimately comfortable with our position, and have not revised our market guidance as a result of these developments.
The statement released to the ASX by Bendigo and Adelaide Bank on May 26, 2009 includes the customers and exposures outlined in the separate announcement by Adelaide Managed Funds.
APRA’s decision not to support the proposed purchase of the Asset Backed Yield trust was in no way related to these issues.
Contrary to recent media reports, neither Bendigo and Adelaide Bank, nor any of its related parties have recently bought any portfolio of loans from Great Southern at a discount (such as the $0.38 cents figure that has been quoted). (bold added)
We would appreciate if these facts could be reported.

The Shadow · 2 June 2009

Dear all,

This is an extract from a recent Research report on GS and the potential impact on Investors:-

When determining the viability of each MIS forestry project, consideration needs to be given to both the term to maturity, and the amount of fees outstanding. This will determine the amount, if any, of additional funds required to manage the project to maturity.

As MIS investors in the 1998 to 2007 pulpwood projects and high value timber projects do not own the underlying land, they will be reliant on their leases to secure their investments over the interests of the landowner and any mortgages registered on title. Should there be ongoing lease payments required for these properties, there is a risk that GSMAL will not be able to meet the lease payments, as most of GSMAL’s remuneration for these projects is deferred and payable out of harvest proceeds. As a result, there is a risk that these leases may be terminated or that investors may be required to make additional contributions.

GTP - Great Southern Plantations

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