1. Sale of Elbow River properties constituted sale of substantially all of AvenEx, but no shareholder vote yet
2. Conflict of interest with excessive pay-outs to directors at AvenEx and Pace
3. Dividend reduced, and possibly terminated after 6 months
4. Sale price for Elbow River appears to be under-valued
5. Rush to sell Elbow River appears related to under-valued sale price
6. Proxy vote cut-off (February 13) before knowing whether Elbow River sale closes (February 15)
7. Arrangement does not make business sense since
A. Charger verging on insolvency
B. Previously AvenEx had been in good financial shape, but if Arrangement goes through, Spyglass is much riskier
C. Net capital allowance of $900 million indicates the lack of past success of the participants to the Arrangement
D. Huge self-serving employment termination payments at AvenEx and Pace
8. Corporate Governance Misconduct? Gallacher, Dundas, and Buchanan all on the Board of Directors at Athabasca, and appear to be using AvenEx as a cash machine to pursue their own self-serving interests
9. Lack of disclosure
A. Verbal reports
B. Unaudited financial statements
C. “Secret” Peters and Co. Report unavailable to shareholders
D. No clear disclosure by AvenEx of the additional sales of real estate and oil properties in Q4 2012, nor their contribution to cash flow
E. No clear shareholders’ resolution
10. The cash flow from Elbow River and from the oil properties provided a “natural hedge” in the sense that higher price differentials between Alberta oil and World (Brent) oil resulted in higher cash flow for Elbow River when the cash flow from the oil properties was reduced. With the proposed sale of Elbow River, the cash flow stream is much riskier. Spyglass would be higher risk whereas AvenEx was medium risk.
11. Investors in AvenEx purchased shares for the income stream, but over half the distributable cash flow is gone with the proposed sale of Elbow River
12. Incompetence relating to the reorganization, as an example, inconsistencies in statement such as “In conjunction with the Arrangement, AvenEx has reached a binding agreement for the sale of its Elbow River Marketing business” (AvenEx Material Change Form, December 20, 2012) suggesting that AvenEx shareholders would need to approve the Elbow River sale; however “Closing is presently scheduled for February 15, 2013” (Joint Information Circular, January 18, 2013) subsequently appears.
13. How can shareholders vote on Elbow River if the sale closes before the shareholders’ meeting? This critical information is buried on page 111 of the Circular.
14. Why the obscure golfing references? Until recently the name of the Spyglass presentation on the Pace and Charger websites was called “Project Pebble Beach - v.Final”. (This was just recently re-named.) And, of course, “Spyglass” is a golf course at Pebble Beach. Does anyone know how these references to Pebble Beach fit into this “Arrangement”? Is AvenEx planning to buy real estate for directors at Pebble Beach?