"Any legal obligation to pay the debt will be wiped by the bankruptcy, but the moral obligation to repay remains - this applies only to C&B debt, not CBS debt which was dead back in 2009"
From Liam Collins ala "Q&A document compiled with Liam Collins" blog article (if you have not previously read this article, you should):
"I believe if I was making the rules those who had not originally invested in C&B should be treated differently. We know that the FSA treats them differently but it is whether the receiver will. If he does then he will make C&B PN investors a priority which I agree should be the case. That said all this is largely irrelevant who is prioritised as there will be nothing realised from the sale of the assets and so there will be nothing to prioritise. It is now down to us and our moral obligations as to who we choose to prioritise if the law allows us to do so as I am sure you will understand I am happy to pay back those who have supported us and those who have made it difficult I have no intention of paying a penny back."
And there you have it, the partners' endearing love for ex-CBS investors! And it is very much this group that is providing support for an IVA proposal, in contrast to the vast majority of those who invested in the partnership in 2010/2011 who are anti-IVA ... and for good reason. The only reason the partners want an IVA is to protect their own hides, as they are fully aware of the:
- prohibitive costs associated with bringing independent legal action outside of a bankruptcy framework.
- plethora of charges and supporting evidence that will be laid at the bankruptcy trustee's feet.
Robert Wakefield would have you believe that allowing the partnership to go bankrupt would amount to "Collins and Bone being allowed to walk away Scott free". Quite the contrary - personally bankrupted (and all the ramifications that has), criminal records, likely jail terms, prohibited from ever handling investor monies again ... these are very substantial penalties and public safeguards.
The partners have said:
"We are offering 100% in the IVA because we feel it is right to do so. We are not stating that we believe we can repay 100% or that our properties are capable of repaying 100%. I think everyone understands this. The repayment plan is based on the market recovering and the rental income remaining strong."
This is no basis whatsoever for an IVA proposal. If the %age return is not substantial (the partners themselves said back on 1/12/2011 that an IVA was not advisable because at best you might only get 20p in the pound) and guaranteed, any IVA proposal is worthless, and the pursuance of crimninal charges is the best route forward ... and it is the facing of these criminal charges that the partners want to avoid at all cost. A number of ex-CBS investors who have either joined the anti-IVA group, or are sitting on the fence waiting to see what, if any, IVA proposal is put forward, have expressed their regret at not having done more as CBS investors to hold the former directors to account, realising that the same treatment that was meted out to them as CBS investors has now been done to C&B investors in an even more blatant manner. Their views are that the partners need to be stopped and held to account for what they have done.
And let's take a look at the above Q&A document statement from Liam Collins a bit more closely, and apply it to PNs taken out in 2010/2011:
- Were monies owed to C&B investors paid ahead of those owed to ex-CBS investors? Absolutely not!!!! In 2010/2011, some 300k GBP was paid out to ex-CBS investors, yet there are C&B investors who invested in 2010/2011, myself included, who have not received a penny in interest payments and/or our original investment.
Now consider the following statement from Liam Collions in a personal e-mail on 18/1/2012:
"Total invested in CBS which was carried over = 2.3m this will be reduced to around 2m as it includes interest as per the PN i not paid on time."
, and couple it with this niave statement Robert Wakefield made to a group of select investors in March 2012:
"Unless I am very much mistaken, it seems there is a small splinter group of investors who are determined to ruin everything for everyone by acting without having properly understood what bankruptcy for Collins & Bone will mean for us all."
What Robert Wakefield neglects to mention is that ex-CBS investors have already received a return of 15% of their original investment monies at the expense of C&B investors ... although I suspect that these monies were not evenly distributed. C&B investors have collectively received substantially less than this, and were just outright defrauded of their monies.
- Were monies owed to C&B investors who invested in 2010/2011 paid out in a pro-rata manner? Absolutely not!!! Some investors were paid monthly interest right upto and including October 2011, others stopped in July 2011, others in May 2011 ... and some never received anything at all.
- In the e-mail from Liam Collins to all investors dated 1st November 2011, he states:
"We have taken legal advice from a top practice and they have explained that we cannot now prioritise one investor over another due to the overdue PNs which have a negative effect on the solvency of the partnership. We must treat all investors (creditors) equally."
But the partners were in default of PNs in March 2011 (that's just from a C&B investors perspective) ... and I suspect that they were in default of ex-CBS investor issued PNs long before this as well, hence the need to have ex-CBS investors sign 5-year PNs in March 2011. So exactly what the condition "now" refers to, ala "cannot now prioritise", is a mystery.
So God only knows what criteria were used to determine who got paid when - and it certainly was not down to computer software bugs as Liam Collins would try and have you believe.
The monies that were raised through PNs in 2010/2011 were almost certainly being used from the outset in a "ponzi/"borrowing from Peter to pay Paul" manner - in the case of the investor whose story is covered in the blog article "The true Liam Collins" there is absolutely no question that this is what happened. The ex-CBS investors, who received 300k GBP post 2009, well these monies I am sure also largely came out of these newly issued PNs ... this, in total violation of what the majority of the C&B investors were told their monies were going to be used for. I am sure a full investigation of the books by the bankruptcy trustee will bear these statements out.
The Editor
