Wellington Capital PIF/Octaviar (MFS) PIF

[Mary Lynch]

Re: Octaviar MFS Premium Income Fund PIF

These "men" are the arseholes of the earth. The main feature is that they have NO CONSCIENCE....are just pathologicl cheats and liars with no ability to think further than their own selfish person. They are to be pitied, and really should be left behind bars to contemplate the errors of their ways.

However, Jadel, How could you invest with them not once (and lose your $$ to these thieves) but TWICE...even with the benefit of hindsight!!!???

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Complete Supreme Court Ruling found here:

Excellent. Thanks JM.

The bulk of the text of the decision is about what date to apply to the wind up/voluntary administration. This is important because it would determine which transactions can be voided. A wind-up order - effective date of 4 June. Voluntary Administration - effective date 14? September.(see para [30])

Para [12] - ATO support PTQ's move to wind-up OCV rather than for VA.

Para [26] - The reason PTQ is asking for a wind-up: the proposal to us creditors "at least so far as noteholders are concerned, was flawed for legal reasons because a majority, even a 75 per cent majority, could not alter the terms upon which the notes were held, so that the proposal was always bound to fail. It is unnecessary to determine that question but if the Public Trustee’s point is correct, it is unfortunate that it was not revealed before this week."

IMO - OCV Ltd has dug itself a huge hole since Jan 08. Selling Stella, selling MFSIM, flawed proposal. Had OCV simply subordinating itself to its creditors in Jan 08 it would have had a much better chance of surviving but like a leopard that can't change its spots it continued to play tough business man. Arrogance seems to have killed OCV Ltd. What is it with people like this who can't see when the gig is up?

[44] [45] & [59] PIF $50M Support Mechanism was demanded on 26 Feb 08. The agreement behind the SM was dated 23 Jun 2006. PTQ argued that this transaction could be voided (hence reducing PIF's claims and standing as a creditor) Thanks heaps PTQ, for the salt on our wounds. Oh and you too ATO. Fortunate for us McMurdo found "But at least at present, that is no indication of insolvency in 2006 and the Public Trustee’s suggestion involves mere speculation.".

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

People this isn’t rocket science. The only part open for interpretation is section 177 (1a). So talk to ASIC or Jenny or get a lawyer and stop speculating.

We know a legal opinion was given so I’m sure things were checked out by a lawyer and if perhaps you can get them on a technicality.....

Thank you Cableguy for bringing me up to speed on this. I did seek advice after receiving your post and was advised that:

(a) a case could be run against PIFI, grounded on the fact that information was used to identify and contact certain types of unit holders to the exclusion of others; and or

(b) a bigger case could be run against the legislation itself seeking to amend it to make it illegal to supply information considered to be private and in contravention of privacy laws.

As you say, the matter is open to interpretation; subjective in fact and you'll find lawyers who (for an appropriate fee) could argue either way.

By the way, wasn't it DoraNBoots who was quoted a fee of $40,000 by WC to obtain a copy of the PIF register?

Rance

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

"Small window for Octaviar as administrators arrive

Nick Nichols

September 15th, 2008

A SENSE of relief has descended on the Octaviar board after it was finally allowed to call in the corporate doctors at the weekend.

The administrators, appointed on Saturday afternoon, will sweep into Octaviar's Southport office this morning to take charge of the company's affairs.

The embattled entity, formerly known as MFS, is now expected to be given six weeks to reach a new deal with creditors owed $1 billion, as a winding-up hearing scheduled for the Queensland Supreme Court this morning is likely to be adjourned until October 24.

The Octaviar board appointed John Grieg and Nicholas Harwood, of Deloitte, as voluntary administrators on Saturday afternoon, shortly after a phone call from Justice Philip McMurdo at midday.

Justice McMurdo informed Octaviar he had lifted an injunction that had previously hamstrung the company, preventing it from appointing administrators.

"It's a bit of a relief," said chief executive Craig Chapman. "At least we've got to first base."

The Public Trustee of Queensland, acting on behalf of 560 noteholders who are owed $351 million, last Wednesday sought a winding up of Octaviar.

The move had baffled Octaviar directors after a meeting of noteholders two days earlier agreed to hold off on any action until September 30, allowing the noteholders time to consider an existing payout offer that would have given them an average of 22.5c in the dollar.

This compares with 13.9c in the dollar the company said would be left through a liquidation.

Many creditors, including Octaviar's former flagship investment vehicle, the Premium Income Fund, had warmed to the idea of the swift payout option already proposed by Octaviar.

The deal would have given smaller noteholders, with up to $5000 invested, all of their money back.

Now, the administrators will go back to the drawing board and offer up a deed of company arrangement that will need to satisfy just 51 per cent of creditors by value and number.

"You'd never think the day appointing a voluntary administrator is good but, under the circumstances and the journey we've had so far, it is a much better outcome than liquidation," said Mr Chapman. "It's basically a six-week window (of opportunity).

"I'll be working with the administrators to put everything together to present to the creditors."

Octaviar director and major shareholder Chris Scott, who led a boardroom coup of Octaviar in April that resulted in his and Mr Chapman's appointment to the board, is in Singapore and is expected to return to the Gold Coast to assist in that process.

The directors have been attempting to keep Octaviar afloat long enough for its key assets to appreciate in value and give the company a new lease of life.

Octaviar owns 35 per cent of the Stella group, a tourism and travel business made up mostly of Mr Scott's former listed company S8, and Tony Smith's former float BreakFree.

Stella, which cost the then MFS more than $2 billion to accumulate, was majority sold to private equity group CVC Asia Pacific in February for about $1.3 billion -- a price Mr Scott, at the time, described as 'outrageous'.

But the sale delivered a much-needed cash boost for the company, which still retains about $150 million in the bank. The liquidation action by the Public Trustee of Queensland is said to have drained about $5 million of those reserves."

Are these Directors/Exec's so delusional that they think we swallow the same crock that they seem to believe?

Ummm - DUH - OCV Ltd board could have gone for VA a year ago or at any point since then and in doing so preserving a hell of a lot of value for both creditors AND shareholders. Right? But NO - like pokie junkies they opted to inject more cash that they can't afford into the slot, i.e. another capital raise of this time $550M, hoping that this was the one that was going to pay out.

They just don't get it. The days of easy cash and minimal dislosure are OVER. How many more times does PTQ have to slap you in the face for you to wake up and change your MO?

 

[flatback]

Re: Octaviar MFS Premium Income Fund PIF

"Small window for Octaviar as administrators arrive

Nick Nichols

September 15th, 2008

A SENSE of relief has descended on the Octaviar board after it was finally allowed to call in the corporate doctors at the weekend.

The administrators, appointed on Saturday afternoon, will sweep into Octaviar's Southport office this morning to take charge of the company's affairs.

The embattled entity, formerly known as MFS, is now expected to be given six weeks to reach a new deal with creditors owed $1 billion, as a winding-up hearing scheduled for the Queensland Supreme Court this morning is likely to be adjourned until October 24.

The Octaviar board appointed John Grieg and Nicholas Harwood, of Deloitte, as voluntary administrators on Saturday afternoon, shortly after a phone call from Justice Philip McMurdo at midday.

Justice McMurdo informed Octaviar he had lifted an injunction that had previously hamstrung the company, preventing it from appointing administrators.

"It's a bit of a relief," said chief executive Craig Chapman. "At least we've got to first base."

The Public Trustee of Queensland, acting on behalf of 560 noteholders who are owed $351 million, last Wednesday sought a winding up of Octaviar.

The move had baffled Octaviar directors after a meeting of noteholders two days earlier agreed to hold off on any action until September 30, allowing the noteholders time to consider an existing payout offer that would have given them an average of 22.5c in the dollar.

This compares with 13.9c in the dollar the company said would be left through a liquidation.

Many creditors, including Octaviar's former flagship investment vehicle, the Premium Income Fund, had warmed to the idea of the swift payout option already proposed by Octaviar.

The deal would have given smaller noteholders, with up to $5000 invested, all of their money back.

Now, the administrators will go back to the drawing board and offer up a deed of company arrangement that will need to satisfy just 51 per cent of creditors by value and number.

"You'd never think the day appointing a voluntary administrator is good but, under the circumstances and the journey we've had so far, it is a much better outcome than liquidation," said Mr Chapman. "It's basically a six-week window (of opportunity).

"I'll be working with the administrators to put everything together to present to the creditors."

Octaviar director and major shareholder Chris Scott, who led a boardroom coup of Octaviar in April that resulted in his and Mr Chapman's appointment to the board, is in Singapore and is expected to return to the Gold Coast to assist in that process.

The directors have been attempting to keep Octaviar afloat long enough for its key assets to appreciate in value and give the company a new lease of life.

Octaviar owns 35 per cent of the Stella group, a tourism and travel business made up mostly of Mr Scott's former listed company S8, and Tony Smith's former float BreakFree.

Stella, which cost the then MFS more than $2 billion to accumulate, was majority sold to private equity group CVC Asia Pacific in February for about $1.3 billion -- a price Mr Scott, at the time, described as 'outrageous'.

But the sale delivered a much-needed cash boost for the company, which still retains about $150 million in the bank. The liquidation action by the Public Trustee of Queensland is said to have drained about $5 million of those reserves."

Are these Directors/Exec's so delusional that they think we swallow the same crock that they seem to believe?

Ummm - DUH - OCV Ltd board could have gone for VA a year ago or at any point since then and in doing so preserving a hell of a lot of value for both creditors AND shareholders. Right? But NO - like pokie junkies they opted to inject more cash that they can't afford into the slot, i.e. another capital raise of this time $550M, hoping that this was the one that was going to pay out.

They just don't get it. The days of easy cash and minimal dislosure are OVER. How many more times does PTQ have to slap you in the face for you to wake up and change your MO?

Duped if you believe the statement that you just made is true( the days of easy cash and minimal disclosure are over ) i tell you what, i have three geese in my yard that lay, gold silver and diamond eggs, which one do you want to buy. as long as there are corporate lawyers,( who will bend every law to suite their own whims) and an asic body that doesnt have the kahoonas to use the power that has been bestowed on them , and there are a group of people (us ) who believe that there are gov agencys to look after us, and unfortunately the white shoe brigade that runs the financial world on the gold coast is allowed to operate as they do ,IT WILL HAPPEN UNTIL I SUCK IN MY LAST BREATH, i liken this form of investment to investing my money into the poker machines,you may say, well you were caught too you know ,and you are right, but because of my age and my health i can guarantee, it will not be physicaly possible for me to ever get caught again, and unfortunately its my wife and her well being that concerns me more than anything.
i have put many threads on this forum trying to instill some sense and order to the retoric that has materialised but to no avail, constantly we hear from the same people cutting and pasteing exerps from papers etc etc, WHY when everything is out of our control. i wont say have a good day , have a bad day like i have to suffer.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

So has anybody heard whether the meeting is on or off tomorrow?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

So has anybody heard whether the meeting is on or off tomorrow?

They are still in court, there is meant to be a statement posted on the PIF website as soon as is possible. It is my understanding there will still be a meeting tomorrow, no one is sure as to in what capacity at this stage. Seamisty

 

[newwwtrader]

Re: Octaviar MFS Premium Income Fund PIF

Thank you Cableguy for bringing me up to speed on this. I did seek advice after receiving your post and was advised that:

(a) a case could be run against PIFI, grounded on the fact that information was used to identify and contact certain types of unit holders to the exclusion of others; and or

(b) a bigger case could be run against the legislation itself seeking to amend it to make it illegal to supply information considered to be private and in contravention of privacy laws.

As you say, the matter is open to interpretation; subjective in fact and you'll find lawyers who (for an appropriate fee) could argue either way.

By the way, wasn't it DoraNBoots who was quoted a fee of $40,000 by WC to obtain a copy of the PIF register?

Rance

If that was the advice you were given......id go and get another opinion

And secondly.......why would you even waste your time about such a meaningless issue? There is nothing to be gained from it!! Surely energies are best directed to more meaningful tasks

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Yep. I did get duped - by my financial advisor who in turn was duped by ratings agencies who were duped by MFS. Hence the handle I gave myself - to remind me.

I was trying to be as brief as possible. What I meant was 'days of large amounts of super easy cash with no questions asked are over for this cycle'. I have no doubt it'll happen again. (I recall hearing a story about a stack of dutch investors being done over by a tulip shceme in the 18th century.)

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

If that was the advice you were given......id go and get another opinion

And secondly.......why would you even waste your time about such a meaningless issue? There is nothing to be gained from it!! Surely energies are best directed to more meaningful tasks

Like counting the cost of todays episode!!!! Seamisty

 

[flatback]

Re: Octaviar MFS Premium Income Fund PIF

Yep. I did get duped - by my financial advisor who in turn was duped by ratings agencies who were duped by MFS. Hence the handle I gave myself - to remind me.

I was trying to be as brief as possible. What I meant was 'days of large amounts of super easy cash with no questions asked are over for this cycle'. I have no doubt it'll happen again. (I recall hearing a story about a stack of dutch investors being done over by a tulip shceme in the 18th century.)

Sorry duped its just that you were the first cab of the rank( i wouldnt buy any of my geese either) its all so very frustrating, i let my heart bleed to WC about my personal problems and got $2000 for $4444 worth of units i apologise again to you , its not your fault, and to you, do have a nice day. Flatback

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

If that was the advice you were given......id go and get another opinion

And secondly.......why would you even waste your time about such a meaningless issue? There is nothing to be gained from it!! Surely energies are best directed to more meaningful tasks

Thanks Newwwtrader.

The legal opinion was (fortunately for me) given freely.
I value my privacy and believe info about the number of shares or units I hold in any organisation should not be divulged willy-nilly without my consent. I'm surprised it can happen in this context and demonstrates that in some areas of law, privacy considerations have not been acknowledged. In my mid-seventies, I have other priorities to pursue and will leave it to younger citizens, especially lawyers, who might like to take up this "meaningless issue". I'm speaking here of broader community concerns not the minor PIF skirmish we are involved in. I'll refer the subject to Civil Liberties Australia.

Rance

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Just published:
Premium Income Fund – Supreme Court Proceedings
Wellington Investment Management Limited has appeared in the Supreme Court of Queensland today in relation to an application bought by the Australian Securities and Investments Commission seeking orders restraining Wellington Investment Management as the responsible entity of the Premium Income Fund from proceeding with the resolutions scheduled to be considered at 10.00 am tomorrow 18 September 2008.
Justice McMurdo dismissed all of the concerns raised by ASIC except one.
Clarification about the proposed cash payments to unitholders will be sent to all unitholders, confirming that cash payments totalling 3 cents per unit will be made by Christmas. The clarification notice will also advise unitholders that no decision has been made by Wellington Investment Management Limited about the quantum of any payments to unitholders after that time.
Unitholders will be advised that quarterly payments are proposed, however unitholders must consider the resolutions the subject of the 18 August 2008 notice with the clear understanding that any payment beyond December 2008 will depend entirely on the financial circumstances of the Premium Income Fund at that time.
Chairperson, Jenny Hutson said “I am disappointed that this has been the outcome. Unitholders in this fund have had a very difficult 7 months. Our efforts in ensuring unitholders have been well informed have been very significant. When I stepped into this role on 2 May 2008 it was with one purpose only, that purpose being to achieve the best possible outcome for Premium Income Fund unitholders - all 10,387 of them.”
She said “It remains my mission to look after the people who invested in this fund in good faith. I will remain determined in that regard. I will be asking unitholders tomorrow to adjourn the scheduled meeting so that clarifying information can be sent before a decision on the resolutions is finally made.”

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

Like counting the cost of todays episode!!!! Seamisty

ASIC's action has nothing to do with the letter that was sent to investors.

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

ASIC’s case was in relation to whether the information contained within the EM would give the average unitholder the correct understanding of WCIM’s intentions for the fund along with WCIMs ability to meet those commitments.

The judge dismissed the second part of ASIC’s case as this was a last minute addition which WCIM could not reasonably address in the time permitted before tomorrow’s meeting.

ASIC said that distributions, buyback and investor committee were permissive rather than enforced which means that WCIM are not legally required to honour these as they do not appear in the proposed constitution.

There was a lot of discussion over what “and quarterly thereafter” meant. The judge agreed that the EM could be interpreted by the average unit holder to expect a 3 cent per unit distribution quarterly. When asked, WCIM said they are planning on giving a 1.5 cent per unit distribution quarterly however when questioned more deeply admitted that no actual amount was legally guaranteed. The judge asked whether it could be a 0.1 of a cent per unit per quarter. WCIM said “yes but it wouldn’t be”. This is an important point for investors who are planning on relying on income beyond Christmas.

The judge noted that the 2% severance fee (resolution 1) isn’t in the unit holder’s best interest however it is recommended by WCIM directors.

All parties agreed that resolution 3 should be an extraordinary resolution rather than an ordinary resolution and that it was incorrect. Interestingly the lawyers in the room couldn’t confirm what the correct requirement for and extraordinary resolution was and someone said 75% which everyone seemed happy with however, an extraordinary resolution requires 50% of all units to pass (ordinary is 50% of those that vote).

The calculation for the .7% management fee is currently based on funds under management of $691M carrying value! This equates to $4.837M per annum.

A transcript of the case will be available to purchase whole or in part from the State Reporting Bureau in around 28 days
http://www.courts.qld.gov.au/2056.htm

Now for the moment you’ve all been waiting for, the verdict…

The judge ruled against all 3 resolutions and that the affirmative vote has been unintentionally mislead by WCIM. The average unit holder may have voted expecting a 3 cent per unit quarerly distribution. It would not be apparent to the average unit holder that the 2% removal fee was a part of resolution 1. The meeting tomorrow cannot be to decide the vote.

-----
"This concludes our broadcast day. Click."

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

Just published:
Premium Income Fund – Supreme Court Proceedings
Wellington Investment Management Limited has appeared in the Supreme Court of Queensland today in relation to an application bought by the Australian Securities and Investments Commission seeking orders restraining Wellington Investment Management as the responsible entity of the Premium Income Fund from proceeding with the resolutions scheduled to be considered at 10.00 am tomorrow 18 September 2008....blah blah blah

Note that the above is WC's media realease http://www.newpif.com.au

Comare this release to what was actually said, see post #2737

-----
"Hard to believe they got the floors cleaned in here after what happened..."

 

[newwwtrader]

Re: Octaviar MFS Premium Income Fund PIF

Thanks Newwwtrader.

The legal opinion was (fortunately for me) given freely.
I value my privacy and believe info about the number of shares or units I hold in any organisation should not be divulged willy-nilly without my consent. I'm surprised it can happen in this context and demonstrates that in some areas of law, privacy considerations have not been acknowledged. In my mid-seventies, I have other priorities to pursue and will leave it to younger citizens, especially lawyers, who might like to take up this "meaningless issue". I'm speaking here of broader community concerns not the minor PIF skirmish we are involved in. I'll refer the subject to Civil Liberties Australia.

Rance

That statement about not wanting your information disclosed is quite hypocritical. Considering that most people here believe (quite rightly) that ASIC and any other interested body should be chasing the money trail of King and Co.

Now in order for them to do that they are going to have to go and look at organisation records etc. And guess what, in doing so other peoples details are going to be devulged (how many shares thye owe etc).

And here is another little gem, when the fund does get listed on the NSX one could assume that your details will be all the more available.

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Court ruling forces Octaviar meeting to be adjourned
Article from: The Courier-Mail

by Anthony Marx

September 17, 2008 12:00am

A MEETING expected to draw up to 1000 investors at the Gold Coast Convention Centre will have to be adjourned this morning.
This comes after a Brisbane court late yesterday ruled that information sent to them was misleading and deceptive.

The decision is a costly blow for Wellington Investment Management, which was seeking approval of three resolutions to help restructure the embattled $413 million Premium Income Fund once operate by failed financier Octaviar (formerly MFS).

Supreme Court Justice Philip McMurdo sided with arguments by the Australian Securities and Investments Commission that unitholders could be confused about proposed quarterly cash payments in the new year following a promised 3c payment by late December.

"It is likely that many unitholders would be affected in their consideration of the resolutions," Justice McMurdo said.

Wellington chair Jenny Hutson said she hoped to re-schedule another meeting within a month and would send out new proxy forms after consulting with ASIC. "I'm disappointed for the unitholders," she said.

Ms Hutson said her firm had been engaged in extensive talks with ASIC since August about the proposed changes to the fund constitution and the corporate regulator had never previously raised concerns about lack of clarity in quarterly payments. ASIC had even approved the 80-page explanatory memorandum sent to investors, she said.

Wellington had proposed giving unitholders a 1.5c payment in October and another 1.5c payment in December and "quarterly thereafter" - wording that Justice McMurdo ruled could be interpreted to mean 1.5c or 3c per quarter.

Ms Hutson said no figure was promised because market conditions are so uncertain and she warned that the October payment may now be endangered because of the delay in holding the meeting. The fund's planned listing on the National Stock Exchange tomorrow will also have to be deferred.

Ms Hutson estimated that Wellington would have to bear another $120,000 in costs because of the delay and that yesterday's court tab would reach $50,000. Investors travelling to the Gold Coast will also be out of pocket and severely inconvenienced.

ASIC counsel Jean Dalton argued that Wellington provided investors with error-ridden documents and had failed to make clear its fee structure, including a potential $8 million windfall if removed as the fund's responsible entity.

The fund was originally worth $755 million but has declined sharply in value because of nearly $200 million owing from MFS and the falling value of assets.

---------END------------

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

That statement about not wanting your information disclosed is quite hypocritical. Considering that most people here believe (quite rightly) that ASIC and any other interested body should be chasing the money trail of King and Co.

Now in order for them to do that they are going to have to go and look at organisation records etc. And guess what, in doing so other peoples details are going to be devulged (how many shares thye owe etc).

And here is another little gem, when the fund does get listed on the NSX one could assume that your details will be all the more available.

Your latest post is very interesting. Of course, ASIC and other investigative bodies are entitled (by law) to look at whatever company records they need to, to track down the money-go-round of King & Co. But I can't see why they would be interested in individual PIF unit holders such as you and me? (I don't hold Octavian shares.)

When listed on any exchange, why would individual details be available to every Tom, Dick and Harriette? When buying or selling shares, I've never in 50 years known the details of the person or company at the other end of the deal.

I'm saying that registers made available to the general public should not (as they do now) contain info regarding the number of units held by each individual on the register unless an individual allows that.

It's not rocket science! It's a simple one character position on a computer record indicating "yes" or "no". You've probably indicated such on many other forms you've filled in recent years, particularly on the internet.

I find your comments rather strange. In the words of another (in)famous Queenslander: PLEASE EXPLAIN.

And why are you wasting time on this matter when you could be using it on more productive matters concerning our PIF?

Rance

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Just published:
Premium Income Fund – Supreme Court Proceedings
Wellington Investment Management Limited has appeared in the Supreme Court of Queensland today in relation to an application bought by the Australian Securities and Investments Commission seeking orders restraining Wellington Investment Management as the responsible entity of the Premium Income Fund from proceeding with the resolutions scheduled to be considered at 10.00 am tomorrow 18 September 2008.
Justice McMurdo dismissed all of the concerns raised by ASIC except one.
Clarification about the proposed cash payments to unitholders will be sent to all unitholders, confirming that cash payments totalling 3 cents per unit will be made by Christmas. The clarification notice will also advise unitholders that no decision has been made by Wellington Investment Management Limited about the quantum of any payments to unitholders after that time.
Unitholders will be advised that quarterly payments are proposed, however unitholders must consider the resolutions the subject of the 18 August 2008 notice with the clear understanding that any payment beyond December 2008 will depend entirely on the financial circumstances of the Premium Income Fund at that time.
Chairperson, Jenny Hutson said “I am disappointed that this has been the outcome. Unitholders in this fund have had a very difficult 7 months. Our efforts in ensuring unitholders have been well informed have been very significant. When I stepped into this role on 2 May 2008 it was with one purpose only, that purpose being to achieve the best possible outcome for Premium Income Fund unitholders - all 10,387 of them.”
She said “It remains my mission to look after the people who invested in this fund in good faith. I will remain determined in that regard. I will be asking unitholders tomorrow to adjourn the scheduled meeting so that clarifying information can be sent before a decision on the resolutions is finally made.”

ASIC’s case was in relation to whether the information contained within the EM would give the average unitholder the correct understanding of WCIM’s intentions for the fund along with WCIMs ability to meet those commitments.

The judge dismissed the second part of ASIC’s case as this was a last minute addition which WCIM could not reasonably address in the time permitted before tomorrow’s meeting.

ASIC said that distributions, buyback and investor committee were permissive rather than enforced which means that WCIM are not legally required to honour these as they do not appear in the proposed constitution.

There was a lot of discussion over what “and quarterly thereafter” meant. The judge agreed that the EM could be interpreted by the average unit holder to expect a 3 cent per unit distribution quarterly. When asked, WCIM said they are planning on giving a 1.5 cent per unit distribution quarterly however when questioned more deeply admitted that no actual amount was legally guaranteed. The judge asked whether it could be a 0.1 of a cent per unit per quarter. WCIM said “yes but it wouldn’t be”. This is an important point for investors who are planning on relying on income beyond Christmas.

The judge noted that the 2% severance fee (resolution 1) isn’t in the unit holder’s best interest however it is recommended by WCIM directors.

All parties agreed that resolution 3 should be an extraordinary resolution rather than an ordinary resolution and that it was incorrect. Interestingly the lawyers in the room couldn’t confirm what the correct requirement for and extraordinary resolution was and someone said 75% which everyone seemed happy with however, an extraordinary resolution requires 50% of all units to pass (ordinary is 50% of those that vote).

The calculation for the .7% management fee is currently based on funds under management of $691M carrying value! This equates to $4.837M per annum.

Now for the moment you’ve all been waiting for, the verdict…

The judge ruled against all 3 resolutions and that the affirmative vote has been unintentionally mislead by WCIM. The average unit holder may have voted expecting a 3 cent per unit quarerly distribution. It would not be apparent to the average unit holder that the 2% removal fee was a part of resolution 1. The meeting tomorrow cannot be to decide the vote.

Note that the above is WC's media realease http://www.newpif.com.au

Compare this release to what was actually said, see post #2737

Geez, by reading the announcement on WC website, initially I thought it was favourable to WC & JH.
eg.: "Justice McMurdo dismissed all of the concerns raised by ASIC except one."
Only when you start reading JH quote "I am disappointed that this has been the outcome...." does the reader realise what has actually happened.

I guess trying to add a positive spin to something negative is an art.