briscon auction response

In response to BrisCon ASX Announcement today:

http://www.asx.com.au/asxpdf/20100201/pdf/31ngwwhd51h9qd.pdf

David C. Barrow and companies associated with Mr Barrow (SettleMate Pty Ltd and DefaMate Pty Ltd) hold 1.2m BrisCon BCSCB units (0.3% of total on issue)

With 99.4% of BCSCB units paying the 29 January 2010 $1 final instalment this leaves 0.6% declining to pay; 50% of these are held by David C. Barrow and assoc companies

Alternative for Sophisticated Investors looking to get a slice of BrisConnections

Private Auction:

http://www.settlemate.net.au/PrivateAuction/tabid/60/Default.aspx


Inconsistency: Underwriting Arrangement

There is a fundamental inconsistency between the underwriting arrangement for the final instalment of the BrisConnections units and any claims for a with-recourse liability against unitholders who decline to pay the final instalment.

An issue along these lines was raised in the courts in 2009, but not as yet tested, for the following matters:

VSC 7066/09 FAUSTO IERVESE $500,000
VSC 7067/09 ANNE LOUISE NEWTON $300,000
VSC 7091/09 ROBERT GREGORY STEPHENSON $700,000
VSC 7093/09 SCOTT NORTH-COOMBES $1,000,000
VSC 7096/09 JOE CHEEWA CHANG $500,000
VSC 7377/09 YSCA NOMINEES PTY LTD $100,000
VSC 8392/09 BHAGWAAN ENTERPRISES PTY LTD $500,000
QSC 7295/09 DALEWON PTY LTD $350,000

Note: VSC = Victorian Supreme Court; QSC = Queensland Supreme Court


Following in the footsteps of the causes of actions pleaded in these previous cases -- in our view, either the unitholder pays the final instalment and there is no underwriter payment; or the underwriter pays the final instalment and there is no liability for the unitholder.

It's as simple as that. And makes the collection of debts said to be owing unenforceable by BrisCon (as it always was for the second instalment as well).


Further, any amount that an underwriter pays on or around 17 March 2010 is not a 'Loan' (it is full payment) and in any event there will be no liability for any party on or around 29 July 2010 (6 months after the infamous best endeavours imperative expires).

Regards, David