Wellington Capital PIF/Octaviar (MFS) PIF

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Adam Schwab looks at the Centro situation in today's Crikey. MFS is mentioned.

http://www.crikey.com.au/2009/10/21/centro-charges-put-heat-on-directors-club/

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

The business section of the Sydney Morning Herald today has an article by Michael West about the role of "Custodians." Also, there are some interesting pieces about directors' responsibilities in the Centro coverage.

http://www.smh.com.au/business/a-storm-over-just-who-knew-what-20091021-h93k.html?autostart=1

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Octaviar III - The PTQ Strikes Back

WOW! The legal community isn't happy at all. Using comparatively strong words in their Alerts. Are they hoping the High Court reads them? Check out this from Mallesons http://www.mallesons.com/publications/2009/Oct/10112207W.htm. Emphasis added.
“which had overturned the unsettling first instance judgement”
“The relief felt by the market at the Court of Appeal decision has been dented. While that decision was unanimous and, in our respectful view, correct, the market now has to live with an element of uncertainty”
“The grounds go to the very heart of the issues that caused such disruption following the first instance decision”
“Although the Court of Appeal decision represents the current state of the law and in our respectful view, is correct and likely to be upheld, we cannot dismiss the possibility that the High Court might adopt some or all of McMurdo J's reasoning in the first instance decision, or even adopt a new course”
“While the Court of Appeal decision did not quash or reverse every element of the reasoning at first instance, it at least meant that the position regarding transactions within the facts of the Octaviar case was restored to what the market understood it to be before the first instance decision.”

If the legal/business community hurried up and assisted to void the 22 January 2008 transaction then they wouldn't have to suffer this pain.

To me the reasoning is simple.

IMO the 22 January 2008 transaction failed Holmes JA test because of the subsequent actions of the OCV board. In para [51] Holmes states that the policy of Chapter 2K was to “alert any prospective investor or creditor to the need for further enquiry as to what those liabilities might comprise”. This intent of the legislation was circumvented by OCV making subsequent misleading statements. In the Interim Financial Report for the Half Year to 31 December 2007 OCV stated that “Note 8(d) … Fortress ... held a fixed and floating charge ... THIS loan has been repaid in full..." and “Note 13(l) … the Group repaid in full THE loan facility to Fortress". (Emphasis added)

IMO - OCV mislead the market and hence fell foul of the legislation.

And there is evidence that the market has been misled. Our own JH said there were 5 equally ranked creditors: PTQ, PIF, Challenger, ATO and OPI Pacific. No mention of Fortress as a creditor, let alone a secured creditor. It’s all on the DVD.

McMurdo seems correct to me – I describe the legislation’s intention to catch you out if you attempt to mislead investors and creditors on your debt position. After all, there wouldn’t be any need for this piece of legislation if companies promptly, diligently and uniformly announced their debt positions. Seems to me the High Court has room to move against Fortress on this one.

The law firms’ commentaries seem all about technicalities. Perhaps the High Court will take McMurdo’s more purposive construction of the legislation. And perhaps the lawyers wouldn’t be so stressed if they knew that the real cause of the breach, IMO, is not the technical form of the contract and ‘documents’ but is, as I’ve speculated, OCV’s subsequent misleading statements on their debt position.

 

[BABIHUTAN]

Re: Octaviar MFS Premium Income Fund PIF

The business section of the Sydney Morning Herald today has an article by Michael West about the role of "Custodians." Also, there are some interesting pieces about directors' responsibilities in the Centro coverage.

http://www.smh.com.au/business/a-storm-over-just-who-knew-what-20091021-h93k.html?autostart=1

I can visualise similar tactics when our 'friends' eventually come b4 the courts.
Hearing aid battery failed at critical time during meeting, lost my specs, couldn't read &/or understand documents distributed or whatever defence some clever legal beagle might throw up. One thing is for sure - there will not hv been any confusion on remuneration issues passed at those meetings.
I am reasonably confident our action will succeed - ultimately - the question is how many of us will be around when that occurs and how much of our $ will we be able to recover thru the NSX to bolster a successful CA payout.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Business Gold Coast

Print Share






Indians' $70m offer for resort no mirage
Nick Nichols, business editor | October 26th, 2009

SHERATON Mirage could be the first cab off the rank in a potential multi-million-dollar spending spree on the Gold Coast by a new wave of wealthy Indian investors.

Veteran property figures Peter Madrers and Paul Brinsmead have brokered a $70 million deal for the Sheraton Mirage from the ashes of their development company Resort Corp.

While a contract is yet to be signed, the Resort Corp directors have established a new entity, Pearls Australasia, to seek more property opportunities in Australia, focusing on major trophy assets on the tourism strip.

The Madrers-Brinsmead link to the Sheraton deal has raised eyebrows among creditors to Resort Corp, which faltered earlier this year with debts of $300 million.

The company was kept alive through a deed of company arrangement (DOCA) in May.

The DOCA, described as a 'quasi-receivership' by administrator David Clout, involved the sale of all company assets in the next 30 months to repay creditors.

Mr Brinsmead and Mr Madrers met the wealthy Indian developers, Nirmal Bhangoo and Gurpartap Singh, during a campaign to sell Resort Corp assets in India.

This led to the Indians deciding to make a pitch for the Sheraton Mirage, which was placed into receivership last year by St George Bank.

The Indian investors are understood to be vying for the Sheraton Mirage under a separate entity to Pearls Australasia, a Burleigh Heads-based company registered on September 1.

The Indians are directors of Pearls Australasia, as are Mr Madrers, Mr Brinsmead and Brisbane-based property industry figure David Higgins.


The Indian investors own a single A-class and B-class share in Pearls Australasia, while MBH Holdings, directed by Mr Brinsmead and Mr Madrers, holds one C-class share.

The ultimate shareholders in MBH are Sally Madrers and Heidi Brinsmead, the respective wives of the Resort Corp directors who will share in any profit generated from the Indian-backed ventures.

One Resort Corp creditor, who declined to be named, said the Sheraton deal did not breach any of the terms of the Resort Corp DOCA.

"I just hope they (Mr Brinsmead and Mr Madrers) have the best interests of Resort Corp creditors at heart," he said.

Jenny Hutson, chair of Wellington Capital which controls the Sheraton's second mortgagee the Premium Income Fund (PIF), yesterday confirmed a deal was on the table for the property by Indian parties. She could not say how much of the $20 million owed to PIF would be recovered from a $70 million sale.

But Ms Hutson said there 'would be something in it for PIF investors'.

St George Bank, as first mortgagee, is owed $60 million plus costs from the property.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi All, I invite you to add to this list of suggestions to be fowarded to Mr Rippoll for consideration ASAP. I know that several PIF investors have voiced greivances on this thread previously, now is another opportunity to get them recognised. This list will be fowarded to several key govt representatives and the parliamentary enquiry. A few of us haven't given up yet, so please support us by contributing!!! If you do not wish to contribute but agree with the content and are prepared to put your name to the document please let me know. Thanks, Seamisty

1. We propose recommending to Parliament that legislation be enacted to create an independent entity charged with the assessment of frozen managed funds ..(perhaps to work in conjuction with ASIC..)


2. That the entity could assess whether any tax payable/paid by the fund in recent years related to REAL profit, or to 'profit' calculated on some false or fraudulent basis.

3.That managed funds should be prohibited from being listed in the event they are frozen.

4.That the concept of 'offer' be erased from the Corporatons Act, and be replaced with compulsory redemptions paid by the manager of frozen funds as soon as some predetermined level of surplus cash appears in the fund, say every 2% - each member should be paid a fixed percentage on a pro rata basis - that is, for example, each member be paid 2% of their holdings.

5.If a manager really thinks that the 'fund will be strong again'', then that manager should call a meeting, give members A COMPREHENSIVE REPORT on the state of the fund, put forward A DETAILED STATEGY, and seek members' support - otherwise, leave the unit price at the constitutionally determined price at the time the fund was frozen and progress to wind up the fund as opposed to depleting fund assets to cover operating costs and management fees

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Jenny Hutson, chair of Wellington Capital which controls the Sheraton's second mortgagee the Premium Income Fund (PIF), yesterday confirmed a deal was on the table for the property by Indian parties. She could not say how much of the $20 million owed to PIF would be recovered from a $70 million sale.

But Ms Hutson said there 'would be something in it for PIF investors'.

St George Bank, as first mortgagee, is owed $60 million plus costs from the property.

Yes, seems those managers of yore didn't mind risky deals - Mirvac Aqua (Balmain JV) did the same - the good old second mortgage - City took things one step better and controlled the first mortgage lender (FMF) before its relatives lend out on second mortgages.

Although I didn't invest with the PIF, I follow its progress (if one could call it that) along its tortuous path.

It'll be interesting to see just how much less than $10m you guys get back.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Yes, seems those managers of yore didn't mind risky deals - Mirvac Aqua (Balmain JV) did the same - the good old second mortgage - City took things one step better and controlled the first mortgage lender (FMF) before its relatives lend out on second mortgages.

Although I didn't invest with the PIF, I follow its progress (if one could call it that) along its tortuous path.

It'll be interesting to see just how much less than $10m you guys get back.

From memory that 2nd mortgage loan of approx $20 matured in Dec 2008. I would expect the outstanding loan is accruing interest at 25% in these difficult times as I understand that is the going rate!!!! Seamisty

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Hi All, I invite you to add to this list of suggestions to be fowarded to Mr Rippoll for consideration ASAP. I know that several PIF investors have voiced greivances on this thread previously, now is another opportunity to get them recognised. This list will be fowarded to several key govt representatives and the parliamentary enquiry. A few of us haven't given up yet, so please support us by contributing!!! If you do not wish to contribute but agree with the content and are prepared to put your name to the document please let me know. Thanks, Seamisty

6. If an unlisted fund is frozen (or listed fund is suspended from trade) then all transactions AND transfers under e.g. lines of credit with related parties be banned. Or something less restrictive such each and every transaction above a very low threshold requiring an auditor sign off, or quarantined in a separate entity which is in voluntary administration. Total ban on drawing down of unsecured facilities when a fund is frozen.

7. Severe restrictions on unlisted funds undertaking related party transactions. E.g. Every related party investment by an unlisted trust requires registration of a floating charge whereby the fund's investment is automatically regarded as secured as at the date of the initial investment if:
the related party or any party related to the related party, within 6 months:enters administration or has liqidators appointed, share price drops by a certain amount, initiates divestment of major assets etc.

8. Compulsory insurance against the action of directors, officers, compliance committee officers, etc up to the value of e.g. 25% of the funds reported value. Key details of insurance policy included in the PDS, changes to the policy to be announced to the investors AND market within 1 week, and the entire policy document available free of charge within 1 week from request in paper or electronic format. Electronic format must be text searchable.

9. Any attempts by trusts or RE's preventing or extorting investors/unit holders seeking unit holder lists, trust documents, insurance policies be severly punished. Namely, codify amounts that can be charged and penalties of 10 times the difference. (Legisalating that this must be covered by insurance policies.) Such requests to be fulfilled within 1 week. Penalty $1000 a day. In paper or electronic format. Electronic format must be text searchable.

10. Total ban on related party transactions by unlisted trusts when any director or officer or their family or associates of the related party owns shared in the related party or party related to the related party and has a loan secured by those shares.

11. Fix up the notification of variations in chapter 2K. E.g. any drawn down of a facilities of 10% of the value of facility brought about by something like a 'transaction document' is to be regarded as a change in the terms of the charge. Massive punitive measures where company anouncements conflict with the credit facility as well as some sort of automatic ASIC litigation measures in the legislation for breaches.

12. Take punitive $$ legal action against Deloitte for failing in their duties and putting themselves in a position whereby PTQ now has an arguable case that Deloitte has a conflict of interest.

13. Any draw down of a credit facility by a fund (e.g the facility PIF had with RBS) of more than 10% of current value (audited value within the previous 3 months) be reported to the shareholders/credit holders within a week. And/or, mandatory reporting to shareholders/unit holders of new credit facilities or where existing facilities have been extended, or/and drawn down by 50% AND 75% AND 90%. Penalty - automatic administration.

And a reminder why this is a good idea. Most of the damage to PIF occured from late 2007 when OCV was on the ropes. Even after the freeze on PIF, Guy Hutchings was authorizing MFS Living and Leisure drawing $$$ out of the fund according to Scott Rochford http://www.brisbanetimes.com.au/new...up-leisure-unit/2008/02/13/1202760399558.html

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

From memory that 2nd mortgage loan of approx $20 matured in Dec 2008. I would expect the outstanding loan is accruing interest at 25% in these difficult times as I understand that is the going rate!!!! Seamisty

I wish. Then again, if the secured creditor has also been accruing penalty rates then I'd guess PIF's junk mortgage will be completely wiped out and we can kiss another 6%-7% of our 'value' goodbye. Another dog of a loan.

What did JH say about going after the previous RE's insurers? Not worth it? Maybe WC should reconsider. $20M is beginning to look like a big % of our dwindling fund.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

From memory that 2nd mortgage loan of approx $20 matured in Dec 2008. I would expect the outstanding loan is accruing interest at 25% in these difficult times as I understand that is the going rate!!!! Seamisty

OOPS!! Sorry duped, I meant $20mill!!!!! Seamisty

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Well, Someone is interested in PIF - 235,705 units sold today @ 14 cents!!

 

[Blueboy1]

Re: Octaviar MFS Premium Income Fund PIF

Indians' $70m offer for resort no mirage

Nick Nichols, business editor | October 26th, 2009

SHERATON Mirage could be the first cab off the rank in a potential multi-million-dollar spending spree on the Gold Coast by a new wave of wealthy Indian investors.

Veteran property figures Peter Madrers and Paul Brinsmead have brokered a $70 million deal for the Sheraton Mirage from the ashes of their development company Resort Corp.

While a contract is yet to be signed, the Resort Corp directors have established a new entity, Pearls Australasia, to seek more property opportunities in Australia, focusing on major trophy assets on the tourism strip.

The Madrers-Brinsmead link to the Sheraton deal has raised eyebrows among creditors to Resort Corp, which faltered earlier this year with debts of $300 million.

The company was kept alive through a deed of company arrangement (DOCA) in May.

The DOCA, described as a 'quasi-receivership' by administrator David Clout, involved the sale of all company assets in the next 30 months to repay creditors.

Mr Brinsmead and Mr Madrers met the wealthy Indian developers, Nirmal Bhangoo and Gurpartap Singh, during a campaign to sell Resort Corp assets in India.

This led to the Indians deciding to make a pitch for the Sheraton Mirage, which was placed into receivership last year by St George Bank.

The Indian investors are understood to be vying for the Sheraton Mirage under a separate entity to Pearls Australasia, a Burleigh Heads-based company registered on September 1.

The Indians are directors of Pearls Australasia, as are Mr Madrers, Mr Brinsmead and Brisbane-based property industry figure David Higgins.

The Indian investors own a single A-class and B-class share in Pearls Australasia, while MBH Holdings, directed by Mr Brinsmead and Mr Madrers, holds one C-class share.

The ultimate shareholders in MBH are Sally Madrers and Heidi Brinsmead, the respective wives of the Resort Corp directors who will share in any profit generated from the Indian-backed ventures.

One Resort Corp creditor, who declined to be named, said the Sheraton deal did not breach any of the terms of the Resort Corp DOCA.

"I just hope they (Mr Brinsmead and Mr Madrers) have the best interests of Resort Corp creditors at heart," he said.

Jenny Hutson, chair of Wellington Capital which controls the Sheraton's second mortgagee the Premium Income Fund (PIF), yesterday confirmed a deal was on the table for the property by Indian parties. She could not say how much of the $20 million owed to PIF would be recovered from a $70 million sale.

But Ms Hutson said there 'would be something in it for PIF investors'.

St George Bank, as first mortgagee, is owed $60 million plus costs from the property.

Something in it for PIF investors........ I should hope so!
Blueboy1

 

[gardie]

Re: Octaviar MFS Premium Income Fund PIF

Morning all

A while ago I posted a question about why dont unit holders take control of the fund themselves through their own RE. Alternatively there are RE's out there for hire such as Huntleys for example who would allow investors to take an active role.

There was no real response but again with the likely sale of the mirage this is another example of a manager just accepting the position and not acting as a turn around specialist.

Why havent they gone out and sought a partner. Get 10 million in from partner and take a 50% stake. The world is turning out there so why sit back and take another hair cut when often all these assets need is to be removed from the taint of receivership.

Living and Leisure and Geo were other examples of opportunities that were sold with LLA in particular going to show that it is a great long term cash producing business. The fund was in a great position to take a cornerstone stake in LLA and instead Artic got control and the fund took a bath.

The danger is the the assets of the fund that offer opportunity are being cherry picked and only the crap will be left behind.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Thanks for the name gardie. Got any more. I called about 3 possible RE's about a year ago. None were interested. I think you might be right - WC are beginning to look like they're one dimensional. Any last hope I had that WC were investment managers rather than just an administrator are fading.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Thanks for the name gardie. Got any more. I called about 3 possible RE's about a year ago. None were interested. I think you might be right - WC are beginning to look like they're one dimensional. Any last hope I had that WC were investment managers rather than just an administrator are fading.

Remember, you'll have to amend your constitution to erase the $8m 'kick me out' clause .. that's take 75% + 1 vote. Otherwise you'll give your present manager a nice going away present.

change of manager, 50% + 1 vote.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Remember, you'll have to amend your constitution to erase the $8m 'kick me out' clause .. that's take 75% + 1 vote. Otherwise you'll give your present manager a nice going away present.

change of manager, 50% + 1 vote.

Doubt whether it would stand up in court, but there are about 900 witness's who heard JH state that if we deemed she hadn't performed, she would not take the payout!!!!

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Doubt whether it would stand up in court, but there are about 900 witness's who heard JH state that if we deemed she hadn't performed, she would not take the payout!!!!

JohnH, I am sure I read on here where some investors have documented evidence from that meeting where that was stated. 900 statuatory declarations could not be ignored in my opinion and not only has JH not performed, the PIF is in retreat.

Quote:::'A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.'
Theodore Roosevelt
I rest my case!! Seamisty

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

I am hopeful there may be an another path to changing our RE. The OCV liquidator may be able to retrieve the fund from WC as part of the OCV liquidation process. This would then allow investors to vote for a new RE based on a proper independent analysis of PIF’s potential. Some of the issues that may trigger such an outcome are:

- The comments in McMurdo’s judgement regarding OCVs insolvent trading and whether the WIM transaction was valid
- The clouded circumstances surrounding the “sale” of PIF by the OCV Board
- The status of the $5M held in OCV Administration transferred to WC
- The misappropriation of RBS loan funds by OCV
- The transfer of the dud loans into PIF to cover OCV’s insolvency
- High legal fees incurred by WC which have funded court action in which McMurdo described as going beyond WC’s position as a creditor
- The repayment of the RBS loan by WC under circumstances where it was known that the loan was increased by a misappropriation and legal action had been commenced.

Some of these issues will also be covered in our class action but the more recent ones should be looked at for inclusion. Currently it is only WIM that is a respondent – WC should also be sued particularly in the light of the withdrawal of assistance with documents to support our class action. If WC is unable to manage the fund properly and will not assist investors to recover damages what use are they!

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Doubt whether it would stand up in court, but there are about 900 witness's who heard JH state that if we deemed she hadn't performed, she would not take the payout!!!!

Well, I'd guess that a vote would put it to bed once and for all, rather than get into protracted litigation - IMO

I am hopeful there may be an another path to changing our RE. The OCV liquidator may be able to retrieve the fund from WC as part of the OCV liquidation process.

If OCV was the manager of the fund and doesn't 'own' the fund, then wouldn't the fund be a no-go zone for OCV's liquidator?