RE:RE:There is Always a Fee, When Investment Bankers are Hiredkasparovisme wrote: Who thought I would agree with oilconsult. Petroexplorer, I am at a loss to understand your ignorance. 4 mill fees have been paid for the deal. Maquarie had nothing to do with it. As you have said you have owned many stock which went to zero , I would suggest that you have been screwed so many times you can't even tell when Someone is trying to #uck you
Don't worry, I know when someone is trying to screw me: that would be the 14 cents on the dollar, that the Twin Butte Board, tried to offer Debenture Holders, which was less than the shareholders were getting. (And please don't flatter Oilconsultant, as the comments might go to his head, and make it expand even more.)
I cringe every time I hear that Norton Rose Fulbright lawyer in Court, discussing how Twin Butte originally tried to do a deal, which got voted down by the Debenture Holders. He is usually smirking when he explains how they tried to close a deal, that would pay off the bank debt, but for some reason it got voted down, which led to receiveship.
The deal would have been legal, but required threats and intimidation, to get people to vote yes to it. I can't believe they pay people to advise them "How can we get a deal across? Let's screw the Debenture Holders."
A few guys writing letters, here and there, doesn't get much attention. A large investment banker, hired as an advisor, gets alot of attention. It then organizes a serious group, which attracts more investors that were sitting on the sides, to vote no. But ultimately there still needs to be organization, as to how to attack the bad deal.
As I stated before, my main regret is that there wasn't a proper credit bid placed, to take out the entire company. As a Debenture Holder, I suspected the worst case would be I would just own alot of Twin Butte shares. I didn't think they would offer me less than the value of the debentures. I suspected the proper debt to equity conversion would take place.
For whatever reason, there was no attempt to do a credit bid. Perhaps the advisors recommended that there just wasn't much value. I think part of the game was to stretch out things as long as possible, and hope for oil price recovery, in 2016. Here we are a year later, and oil prices are still around $50. I sure didn't think things would be as bad as they are.
If advisors say there isn't much value, so don't leverage your house, to pay off the bank debt, then that opinion has some value. That is professional advice, that must be paid for. Hopefully the fees aren't too onerous, and we'll soon see what the final number is.
Let's reiterate who the real thieves were, in this entire saga:
1. National Bank - they made out like bandits, for one of the few times, in receivership. They collected fees to raise equity for TBE, collected high interest rates after TBE was in trouble, and could have been more reasonable to deal with.
2. Twin Butte Directors - they threw the keys to the bank, and refused to try and negotiate with some CCAA, then all ran off from their duties. When trouble was first brewing, there wasn't a single peep to the Debenture Holders, to try and reoganize the company, well in advance.
3. Twin Butte Management - this still means the directors, but perhaps some staff were also complicit, in running the company into the ground. Who made the decision not to hedge? Who was approving the high dividend payments? Who wasn't paying down the debt? Who wasn't trying to do a bond deal?
So sorry, I don't see the Ad Hoc Group, or Macquarie, as trying to screw investors. Macquarie fee might be a bit on the high side, but not completely out of line. The one small consolation is now that the NDP raised corporate taxes from 10% to 12%, Macquarie will pay some of that fee, back into the system.
As for other stocks that go to zero, there does need to be a bit more regulation. There needs to be a house-cleaning, but regulators are fairly useless. The economic system thrives on the flow of money, from rich investors, to other people. So the regulators don't want to talk too much, about all the scams that are out there, as it would disrupt the system.
The one small consolation in all of this, is that this is one of the few investor uprisings, that actually won. The end result is more value for the Debenture Holders, than was originaly
offered. Like I have said, I would have preferred to get all the value, but it didn't work out, and we still need to understand why. But to get all the value, Debenture Holders would have had to invest more hard cash, into the troubled company. Higher oil prices, might have made this feasible, but it never materialized.