There is Always a Fee, When Investment Bankers are HiredNo pay, no play: a pretty simple rule. Macquarie seems to have a high fee, but we'll need to verify the actual percentage, after the final distribution is made. Right now, everything is speculation, but we do see a range of possible fees.
There was no doubt some work done by Macquarie, assessing the relative value of the company. People had to look at the company, and determine the future production profiles. Perhaps if Twin Butte had true value, they could have gotten their private banking division, to just lend $205 million, and take out the bank line, as they have done with other companies. But if they didn't do that, then they didn't think there was enough value to survive this prolonged price downturn. $60 oil, would have been an entirely different story.
Let's look at other fees for investment dealings:
Twin Butte offered $70 million of subscription receipts, at $1.95, in October 2013. They paid a 4.5% commission out of the $70 million, to Peters and Co, National Bank Financial, Cannacord, CIBC, etc.
Twin Butte offered $85 million of Debentures, in November 2013. They paid a 4% commission to National Bank Financial, Peters and Co, Cannacord, CIBC, etc.
(I like to reinforce the fact that National Bank made good money from Twin Butte shareholders and Debenture Holders, over the years, then was fairly quick to slit their throates. Keep that in mind when you choose who to bank with...)
So it would be completely reasonable to pay for some commission, on gaining an increased value to the Debenture Holders. The alternative, of actually paying a team of engineering and finance people to assess the Company's value, would eat up alot of fees. That goes beyond the scope of what a smaller investor, can affort do bankroll.
Thus a performance based commission, was the only way to go. We'll just have to see if the value was truly obtained, at the end of the day, and the fees aren't too much more than 5% of the incremental value. Fees in excess of that, might be seen as a bit excessive. But the alternative of a massive loss, is worse than paying a small fee to gain more value.
I'm still interested in finding out if these phantom tax pools, exist or not. Alot of conflicting viewpoints here. Without tax pools, there is no value in a corporate shell, when a fresh corporation can just be started. I know from my own experience, of owning lots of "shell companies", that just sit in my portfolio statement, with zero value.