BCS - BrisConnections Unit Trusts

mikeyfinn111 · 15 January 2009

Re: Brisconnections shareholders - financial ruin

Sunder said:
Yes, they'd lose out on their underwriting agreement, costing them billions.

Even assuming this wasn't the case, from what I understand the majority of share holders owe hundreds of thousands, not millions of dollars. If someone owed you say, $1m, and you knew you could only get $200,000 out of them, would you just forgive the debt and say "Not worth it, since I can't get the lot"? or would you get what you can and write off the rest?

The other possibility is that they sell the debt at 10c to the dollar to a debt collector, and it's the debt collector's problem to make a profit out of it.

If they were to pursue only the people with a million debt or less, the cost of legal fees, accounting fees etc to take all these people to court would exceed what they would get in return, making them even more out of pocket then they already would be. And remember this is mostly mummys and Daddys or young people like myself that have been caught up in this, they can take us to court, but theyll just be making us bankrupt with very little to offer in assets. I owe $650,000 and all ive got is a Beaten up VN Commodore with a blown head. they can take it if it makes them feel better. If MACQ had any business acumen which I imagine they do, they would be aware that this is not a solution.

GumbyLearner · 15 January 2009

Re: Brisconnections shareholders - financial ruin

"Liquidity" is a straw man

GumbyLearner · 15 January 2009

Re: Brisconnections shareholders - financial ruin

Sunder said:
Yes, they'd lose out on their underwriting agreement, costing them billions.

Even assuming this wasn't the case, from what I understand the majority of share holders owe hundreds of thousands, not millions of dollars. If someone owed you say, $1m, and you knew you could only get $200,000 out of them, would you just forgive the debt and say "Not worth it, since I can't get the lot"? or would you get what you can and write off the rest?

The other possibility is that they sell the debt at 10c to the dollar to a debt collector, and it's the debt collector's problem to make a profit out of it.

From my own personal limited knowledge of this situation, not having all the facts. I think it could go either way. Plenty of lawyers must be loving this, no matter who finds judgement in their favour. Does seem like a novel scenario though. JMO

DYOR

GumbyLearner · 16 January 2009

Re: Brisconnections shareholders - financial ruin

I was in cafe last year and a guy from Macquaire Bank told me,.. "Well Macquarie really know what
is going on YOU should invest in us!"

All I could say is thanks, we KNOW YOU KNOW it all..BUT NOW most people realize that their company is worth almost a quarter of when you suggested so go and get ******.

Anyway. I invested in non-retail stocks and have no exposure to financials.
Including Macqaurie and the dodge merchant who told me so!

Thanks Macquarie bank but your garbage employee, customer service, peerage, usual we care more about you because our fund manager/graduate sponsored program is trying to achieve results.

Work on it yourself, you ungrateful doyens of nothingness.

Get a life weaklings!

In good faith
Steve

Sunder · 16 January 2009

Re: Brisconnections shareholders - financial ruin

mikeyfinn111 said:
If they were to pursue only the people with a million debt or less, the cost of legal fees, accounting fees etc to take all these people to court would exceed what they would get in return, making them even more out of pocket then they already would be. And remember this is mostly mummys and Daddys or young people like myself that have been caught up in this, they can take us to court, but theyll just be making us bankrupt with very little to offer in assets. I owe $650,000 and all ive got is a Beaten up VN Commodore with a blown head. they can take it if it makes them feel better. If MACQ had any business acumen which I imagine they do, they would be aware that this is not a solution.

Isn't the average person worth 250k or something like that? I suspect share traders would be above the average net worth.

As for fees, how much could it cost to hire a lawyer for a couple weeks, to send out the preliminary paper work to get it to court (In form letter - basically pay the lawyer 5 units to write the letter, then the remainder of the two weeks to ensure that the letter is applicable in each case), hopefully get some offers of settlement, then decide which are the big fish worth frying for 2 hours in court? Even a QC at $1000 an hour, is only going to cost $2000 per case, when they've narrowed it down to the clients worth suing.

Commercial litigation is not like a criminal trial and is settled very quickly, where a debt is easily proven.

I'm still putting the money on selling debt though, with the price of debt negotiated by the size of outstanding. A $650,000 debt might get sold for $100k, where as a $65 Million debt might still get sold for 100k, unless the debt collector found out the debtor has above or below average assets.

A friend of mine lives with a debt collector. They're ruthless. The statute of limitations says you can't collect on a debt more than 7 years old unless an additional financial transaction has occured in the interim. So what they do, is 2 months before the statute expires, they go in hard, knowing they're not going to get anything. They play "Bad cop", essentially. Then two weeks before it expires, they send a "good cop" in, saying if the debtor would pay just $1 into the account, they'll get off their back for another year, and then renegotiate a payment plan then. That $1 gives the debt collectors another 7 years at it.

So if you think you can get away with not paying the debt because you have nothing now, they may try to collect in 6.9 years, say, after you get an inheritance, or got a good job, or... whatever.

This is why you always treat any kind of debt with extreme caution, and never agree to any kind of debt renegotiation plan without advice of a damn good lawyer.

prawn_86 · 16 January 2009

Re: Brisconnections shareholders - financial ruin

Sunder said:
The statute of limitations says you can't collect on a debt more than 7 years old unless an additional financial transaction has occured in the interim. So what they do, is 2 months before the statute expires, they go in hard, knowing they're not going to get anything.

I didnt know this. Someone i know is being pursued by debt collectors over a mutual car accident (was a rental car company involved also) so i'll be sure to let them know about the 7 year thing

Sunder · 16 January 2009

Re: Brisconnections shareholders - financial ruin

prawn_86 said:
I didnt know this. Someone i know is being pursued by debt collectors over a mutual car accident (was a rental car company involved also) so i'll be sure to let them know about the 7 year thing

Could be 6 years, actually:

The right to pursue the debt in court has expired due to the passage of time.

This time limit varies from state to state, but is usually six years from the date the debt was last acknowledged by the debtor (e.g. by making a payment).

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Draft_ACCC-ASIC_debt_collection_guideline.pdf/$file/Draft_ACCC-ASIC_debt_collection_guideline.pdf

Trying to find the actual legislation, but as I'm at work at the moment, can't really spend too long at it.

Definitely let anyone you know who is having trouble with Debt collectors about the dirty tricks they play. No matter how they got into the debt, debt collectors should not be using deceit and breaking the law in trying to collect.

thermalmonster · 16 January 2009

Re: Brisconnections shareholders - financial ruin

Welcome to the not so Happy Party.
The group is gathering members from different sources also.
Im sorry to hear you guys have also been caught up in this.
You have probably read through the posts and got the general jist of things.

I think to start with a few people on this forum accused us of being a little foolish to have invested in these shares without doing the "obvious research " that perhaps Experienced Investors would have carried out.

However due to the number of people who have fallen into this trap it is becoming increasingly apparent that insufficent and contradicting information has resulted in this situation.
It is blatently obvious to most that some form of PPE should have been issued to protect Jo public from this exposure.

ANYONE ELSE CAUGHT UP IN THIS SHOULD PM ME WITH THEIR CONTACT DETAILS

thermalmonster · 16 January 2009

Re: Brisconnections shareholders - financial ruin

Debt collection companies will only buy up debts that have a sound foundation.
That is where a Liability is proven by way of a credit agreement or similar.
For instance a car loan or personal loan or phone bill. There is no grey area that sudgests that you dont owe the money.

This is much different.

My brother once got hounded by such a company over a defaulted car loan. The company had sold the debt and they wanted to bankrupt him.
A lawyer acting on his behalf came up with somthing to do with the GAP insurance and Bla bla bla.

My point being, as soon as there was a slight bit of doubt in the case that they would not be succesful in getting the money, they pulled the pin

Cant imagine a debt collection company wanting to touch this with a barge pole.

sails · 16 January 2009

Re: Brisconnections shareholders - financial ruin

Sunder said:
Isn't the average person worth 250k or something like that? I suspect share traders would be above the average net worth...

May be the average, I don't know. But the extremely low share price naturally attracts those with small trading accounts and also more likely to be well below your net worth average. If they were experienced share traders, they probably wouldn't be in this mess.

shaunQ · 18 January 2009

Re: Brisconnections shareholders - financial ruin

Hey does anyone know with an off-market transfer whether you still need to be over the $500 minimum ASX purchase amount. Like others have said on here, I would be interested in buying some but not 500,000...

itsonlymoney · 18 January 2009

Re: Brisconnections shareholders - financial ruin

I have read with interest in various newspapers and internet sites about the shareholders who face financial ruin due to this debacle.I am interested in aquiring these shares before the due date.....the proviso being that shareholders sign over the shares to me in a face to face setting.This is absolutely in no way a hoax or misleading....I know exactly what I am doing.

drsmith · 18 January 2009

Re: Brisconnections shareholders - financial ruin

shaunQ said:
Hey does anyone know with an off-market transfer whether you still need to be over the $500 minimum ASX purchase amount. Like others have said on here, I would be interested in buying some but not 500,000...

Why?

shaunQ · 19 January 2009

Re: Brisconnections shareholders - financial ruin

drsmith said:
Why?

Why not? You never know, it could actually be worth something after April... Wouldn't want many obviously...

shaunQ · 19 January 2009

Re: Brisconnections shareholders - financial ruin

itsonlymoney said:
I have read with interest in various newspapers and internet sites about the shareholders who face financial ruin due to this debacle.I am interested in aquiring these shares before the due date.....the proviso being that shareholders sign over the shares to me in a face to face setting.This is absolutely in no way a hoax or misleading....I know exactly what I am doing.

Since no-one has jumped on this... can you elaborate? Obviously it would be a sensitive topic for those affected and since this is your first post I think it would be good to detail your intentions. Are you looking for payment? Whats the deal? As you would know there have been different options, schemes, or scams mentioned previously in this thread -so we aren't stupid. Be upfront and you may get a response...

drsmith · 19 January 2009

Re: Brisconnections shareholders - financial ruin

shaunQ said:
Why not? You never know, it could actually be worth something after April... Wouldn't want many obviously...

When the starting point is so far in the red ($0.70 per unit as estimated by Macquarie), no one wants many. That's why there's no buyers.

shaunQ · 19 January 2009

Re: Brisconnections shareholders - financial ruin

drsmith said:
When the starting point is so far in the red ($0.70 per unit as estimated by Macquarie), no one wants many. That's why there's no buyers.

Their estimate could be wrong. I agree its an absolute gamble, and couldn't afford much, but allowing a lower trade level could at least provide some liquidity. The minimum buy in of $1M is pretty steep.

It wouldn't surprise me to see the price above $2 after both the installments are paid, as much as it wouldn't surprise me to see it completely fold.

The sick irony of Mac Bank buying them all up in the end, bankrupting everyone and making a fortune out of it.

So the question stands, is there a minimum for off-market trades (ie. lower than $500). And do these trades have a transaction cost?

drsmith · 19 January 2009

Re: Brisconnections shareholders - financial ruin

shaunQ said:
Their estimate could be wrong.

It could. There still might be no buyers after payment of the second instalment.

If you wanted to have a punt on this a better time would be after payment of the second instalment (assuming you're not the only one bidding at the time).

Enzyme · 20 January 2009

Re: Brisconnections shareholders - financial ruin

From The Courier Mail:

"This stock is not trading purely because of the liability associated with it," one Brisbane stockbroker said yesterday. "People also don't know what it is worth. After the $1 instalment is paid what will it trade at, 50c, 40c? It certainly will not be trading at $1.

sails · 20 January 2009

Re: Brisconnections shareholders - financial ruin

shaunQ said:
...So the question stands, is there a minimum for off-market trades (ie. lower than $500). And do these trades have a transaction cost?

In the absence of anyone else knowing or replying, I had a look on the ASx site and it's difficult to find any info. Here is a link to an article I found by Patricia Harrison which makes mention of it: http://www.asx.com.au/resources/newsletters/investor_update/20040511_Broker_article_IE3.htm. Here's an excerpt:

The first thing most people ask is: how much money do I need before I can start buying shares? The share registries which manage the registers on behalf of companies will allow a minimum parcel of $500 worth of shares, however as most brokers charge a minimum brokerage on each trade it is really not cost effective to buy such a small parcel and I usually recommend that $5,000 would be a more appropriate amount.

I don't think she had in mind a $0.001 share price with a future $2 debt when suggesting $5,000.

Anyway, back to the point. She says it's the share registries that allow a minimum of $500. I did a search on Link Market Services website (bcsca registry) and could find nothing on minimum share parcels. It seems like Commsec enforce the $500, but perhaps that is their own rule.

I guess you could give Link a call to find out what size you can do by market transfer especially as there is future debt to be considered on this share. If the future debt of $2 was added on to the current share price you could do as little as 250 shares to make up the $500.

And, what happens when people want to give their shares away. Seems a very strange rule if it exists...

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