Member Info for MontiBurns

Just to add some legal company law around a parent being wound up, what happens to the subsidiary:

“If a parent company is liquidated, then it's unlikely the subsidiary will survive unless it's sold whole to a new owner who continues operations.“

(https://www.irwin-insolvency.co.uk/liquidation-of-parent-companies/#:~:text=If%20a%20parent%20company%20is,new%20owner%20who%20continues%20operations.)

As Deloitte mentioned via Looed’s first post that FRUS will be unaffected from FRC liquidation, as well it will continue to operate independently, with its own Board, controls and governance, means that post official liquidation, FRUS will transfer to a new shareholder(s). Value to the transfer to the new owner? Probably just $1 as there are no assets or cash in the company. As someone mentioned earlier, it means all the creditors are wiped out from this liquidation. But unfortunately that also means the shareholders too. We need a miracle and a strong moral conscience from SN&team, that shareholders register and holdings will be transferred to FRUS upon FRC’s liquidation. Perhaps SN May finally be allowed to talk to us directly when FRC is officially gone.

Thanks for continuing to be the conduit Looed, but your hour of need may not be that far away….

Hi Looed, thanks for your responses. Perhaps foolishly, I am still looking at the FRUS situation as ‘glass half full’. So, just wanted to touch on some of your points. Firstly, we know there are many dormant subsidiaries within the FRC group. I recall seeing an organization chart many years ago which showed quite a few FRR subsidiaries and most were dormant. So based off that, why liquidate all except FRUS? Secondly, the intriguing part of your message was also that FRUS was operating independently with its own governance and Board and would not be impacted from FRC liquidation. Well, if that is the case, then to all intents and purposes, it means Deloitteare out (let alone trying to preserve it).

But the more important question is: if the Parent (ie FRC) is liquidated and will not legally exist, who will become the shareholder of FRUS? Here, I will echo ‘tsbs’ concern that perhaps SN or one of his controlled ‘actors’ become the new shareholders, we will be left behind with FRC liquidation. Alternatively, it could be that the case that is rumbling on in Georgia against Zaza (as cymro1864 posted yesterday) has a strong possibility of financial recovery and hence FRUS remains in existence for that conclusion.

As far as Texas and Cayman are concerned, both are primarily relating to FIC and enforcement of personal g’tees, not FRC or FRUS as Deloitte were appointed to liquidate these companies.

What’s your take on FRUS?

Morbidly, this news that FRC and subsidiaries are going to be liquidated while FRUS is untouched, kinda feels like ‘good news’. I mean why not just also wind FRUS down and be done with it especially if FRUS has no assets. Looed listed the pertinent questions that immediately sprung to our minds but I am not sure if AI can provide any meaningful clarity (tbh). So Looed, what is your frame of mind around FRUS ‘continuing to operate independently with its own Board and governance?’. Does it feel positive? And do you know who sits on FRUS’s Board and who is paying the bills if there is no cash in FRUS? Does our man have seat on the new Board? More importantly, after the liquidation of FRC, who is going to be the shareholder(s) of FRUS? Very, very baffling around the prevailing situation especially a don’t have renewed PSA in Georgia.

Ok, so I am no AI, but will try to provide some basic human extrapolation from my side: Discussions with the Georgian Govt probably ongoing between FRUS’s new Board to thrash out a deal on a new PSA and may be there is some traction now, hence this entity continuing to operate independently. Perhaps a deal struck with Deloitte and creditors that in case FRUS restarts operations in Georgia, that it will make ‘payment in kind’ to creditors. On the other side, the Georgians have probably been severely reprimanded by Trump’s MAGA Administration to remedy an US Oil Company’s poor & unfair treatment over the years by Bidzina Ivanshivili’s political party , the Georgian Dream Party.

I honestly don’t know….I wish I could provide a more meaningful insight here…….

Looed, we are aware that FIC is a subsidiary of the FRC Group and that’s never been doubted, but the question was that Deloittes is not managing the liquidation of FIC as Hope appointed the Receivers being the secured creditor. This is why there is little reference to FIC by Deloitte as it is following its own separate legal liquidation process. As far as financial value/recovery is concerned, sure the Moldovan PSA has little prescribed value because there is hardly any production or bookable assets from a credible CPR but implicitly it does have a lot of value as it covers 38% of the country O&G land. As far as the Georgian PSA is concerned, this was signed with FEGL and underpinned by the huge cost recovery pool of $330m so there was some value there if they could ramp up production. But now, with the termination of this PSA, there is not much value left in the Group, unless SN can re-sign the Georgian PSA, and perhaps this where the Trump Administration can help us given the shifting geopolitical landscape.

Anyway, these are nuance points but I wanted to jot something down as I had some free time.

Hi Looed. My understanding is that Frontera Resources International liquidation is being managed by David Griffin et al. This same entity issued the original CLNs which were was subsequently acquired by Stephen Hope at deeply discounted value. Hope is trying to recover his money via FRI as he is secured creditor. FRI was also the Company that signed the PSA with the Moldovan Govt back in 2016, therefore does not be fall under the purview of Deloitte. Is this correct? This case also seems to be rumbling along as Pace Monitor shows an entry from 11 September 2024 for the case to ‘remain open’ under Chapter 15.

Separately, the ‘hairdryer’ treatment that Zellinskyy got in the Oval Office by Trump and Vance signals a seismic shift in geopolitics in that region concerning Russia. So what impact on Georgia and FRR? The fact our situation remains in limbo, is a good thing after all this time………..???

Hi Looed.

I am not sure what to make of your this comment……’ separately, the tender process remains temporarily suspended, and we are still awaiting updates on if or when it might resume’.

My question is, what difference does it make when this process may resume? Our company and future direction is in the hands of Deloitte and from them we know that there is no money in the company to even considering putting a bid in, so what’s your point? The other avenue may be that SN sets up a new company and from that entity he puts a bid in, with the support of the US Political regime. But under this scenario, we are reliant on SN to do the right thing by substituting our old shares in FRR to the new co, although the cost recovery pool of $300m is gone.

Anyway, the political outlook for Georgia is not looking good as far the West is concerned and is (more and more) being perceived as a rogue state…

Interesting choice of words from the Georgian PM….. ‘restore strategic partnership and…..clean slate’. Well, that’s rich coming from the GD Party who have literally destroyed US and foreign companies investments over the years. I for one hope that the US throws this empty gesture back in the PMs face. If they are genuine about restoring political relationships with the US and EU, they need to be transparent and sincere. And we know by now how disingenuous the Georgians can be. Nevertheless, this public statement does probably indicate that there is probably some tension/political pressure from the new US Administration on Georgia and they want make mends before things get any worse, especially under Trump’s America First policy. So let’s see what this change brings for FRR.

Well, I have a strong opinion on this latest news shared by cmyro1864.

When we first got the news that the tender for B12 was temporarily halted last week, we all assumed perhaps this was due to some wider geopolitical and/or economic factors and not specific to our block. But now, after this news that other blocks have been awarded in the same tender process, it is fair to assume that perhaps some US political pressure, owing mainly to the arrival of one Donald J Trump in to the Oval Office triggered something (coincidence? Nope).

There is no way in the world, that you can stick two fingers to a company that has invested $500m in your economy and people by forcibly (firstly) obstructing progress for many years and and then dragging their ass(es) to the Tribunal to forcibly terminate an agreement. The GD is anti-business, anti-West and anti Georgian (people).

Interesting to note that Blocks awarded were to unknown, non-west companies. Also glaringly obvious, that BP nowhere on the scene with these available blocks. The GD is bad for everybody’s health.

SOAG canceling the tender process for B12 at the eleventh hour? Well, that is an interesting and significant development. I mean if our former Block has world class deposits in terms size and composition (I.e oil, gas & condensate) then why would there not be a long queue of interested companies? Sure, you could argue that politics played a big part in this process, especially if Georgia is perceived to be very close to mother-Russia, which has already been an impediment to them joining the EU.

As far as the value of the field data FRR holds on B12, well, that would only be worth what someone is prepared to pay for it. And presently there is nobody that holds the license so why pay for something that you can’t do any with? However, what is more alarming for me is that with the license terminated, the Georgian Govt has basically wiped the slate clean regarding the cost recovery pool which was attached to the oil sale proceeds, thereby freeing themselves of c.$300m+ cost recovery liability (and all it cost them was the arbitration fees).

So then the next question is, why did the GG cancel the tender process on B12? The optimist in me says perhaps there has been more communication between the State Dept and the GG, especially if the latest comms have been endorsed by the new incoming US President, having learnt the ill-treatment FRR received from the GD Party over the past decade. Remember the Americans take good care of one another and if it is perceived that a US company that has taken to the cleaners for investing over a half billion dollars in Georgia’s nascent O&G sector, then they will not take this ‘lying down’.

Having said all this, there more I think out our (shareholders) situation, the more vexed I become at SN. He has basically overseen the destruction of our money for his poor decision on people and operations. Let’s hope he can still absolve himself and rescue his troubled and distressed individual investors. Otherwise, may God never have mercy on his Soul. Harsh but fair (and that’s how I feel right now).

The Liquidator is duty bound to inform the Court that company/group is under their control and in the process of being wound-up. In addition, all creditors have been notified of Deloitte’s appointment via public announcement/publishments. So, perhaps the Texas case is more relevant to the Directors’ PGs.

Well, it’s alittle perplexing is that this Texas cases continues to rumble-on despite the appointment of Liquidators. Typically, all court proceedings are ceased against a company when it’s enters administration and a plaintiff’s claim is then registered with the Liquidator. I mean why would someone continue to incur financial costs when the company is insolvent and there is remote monetary recovery. The only difference here is that may be SN and ZM have issued their J&S personal guarantees and the creditor feels a summary judgment will allow them recourse to these individuals especially SN being a Texan resident.

Separately, will the arrival of Trump, a Republican and a businessman, in to the White House help US Companies like FRR who have been unfairly treated by foreign Govts? We understand there is strong political association between FRR and the Republican Party, but in all honesty it may be a long shot.

Finally some action on Bidzina from the US and thereby opening signaling to the rest of the world what Georgian Dream Party is up to (and has been up to since coming to power some 12 yrs ago), ie playing a double-game with the West and ‘Mother-Russia’. Hopefully also a deterrent to other wannabe Georgian Political figures who think they charm and sweet talk as if they are pro-West but in reality are Ruskie friendly.

Wishing very miserable, depressed and hopeful FRR shareholder a very happy 2025.

The other factor that could play a significant role in the future is FRR is the imminent arrival of Trump in to the White House and we know historically FRR is closely attached to the GOP. Let’s see what January brings…….

Given the silence for many months now, combined with negative news from Deloitte and the contentious results from the Georgian Election, should we (the shareholders, both the passive and the active) just sit on our hands or try to reach out some contacts for any upcoming news? Is there a strategy or is it the case of waiting and see? Rodders befriended some chaps from Deloitte by grassing up the management when they communicated with us after the appointment of the liquidators, so perhaps these nice chaps can now return the favor? Feels like we (the shareholders) are against the wall, blind folded waiting for the firing squad to shoot. And if that is the case, I will pray the SN chokes on his fat, juicy, golden roasted turkey this Xmas while all his loyal investors enjoy another Xmas with ‘beans in toast’. Well, it could be worse, we could all be stuck in Gaza!

Was SN not sitting on the Liquidation Committee at Deloitte? Yes he was. Do we know if he is still sitting on this Committee? If he has bailed already then we are indeed in the last throes of extinction. And if the end is nigh, why can we cannot use our access to get some heads up from the company, rather than facing death by thousand cuts on a daily basis.

Whether it was going to be this quarter or next quarter, I think it is fair to say that we can finally put this ghost to rest. The final straw was probably the Georgian Dream party being re-elected with the slimiest of margins at 53%, although bitterly contested by the opposition and populists. Does a Republican President-elect alter our position going forward, perhaps…..

Yes, we have been loyal and patient because…….

1) We were told after the delisting, don’t worry we will still communicate with you officially via RNS-Reach Service……..what did we get?

2) For years and years, we stood tall with the company during the multiple legal cases, hoping to get some news once these concluded, particularly relating to ZM permanent injunction…… but another false dawn

3) Company went in to liquidation knowingly after SN reneged on a payment plan with Mourant, but were reassured that the management was working hard to ‘return the company to pre-liquidation status’……. Now we are sifting through Gazettes for official confirmation.

Then you have some here who have the gall to suggest that just because most shareholders who didn’t have the means (money & know-how) are somehow more culpable than the people who got us to this place. When are we going to call it a ‘spade of spade’ about the ineptitude and deception propagated by SN and his crew?

Worth remembering that the profit sharing agreement signed between FRR and the Georgian Govt back in 1997 stated that oil profits would be split 51-49 in favour of the GG but this was after FRR had recovered all its costs. This cost recovery pool stands around $320mln (more or less), meaning that any one that acquired FRC, and quickly developed these oil fields like the Taribani would not need to pay anything to the GG until all the investment costs were fully recovered. Further, any new inward investments in to the fields would also be subject to this recovery treatment before any share in paid out. Hence, this is a hugely attractive financial incentive for any Major that could be interested in acquiring FRR/FRC. At the same time, I would say that the Georgian Govt (especially after the GD Party came in to power in Oct 2012), that this arrangement became a big cause of frustration and irritation as Georgia had not received a penny from FRR for all the oil sales it did since 1997, especially as the oil sold by FRR was mainly coming from the old Soviet-era drilled wells like the Mirzaani field. Conversely, and to give SN and his team some credit, they will argue that all sales proceeds (and more) was reinvested in to developing Georgias O&G sector.

As far as accountancy is concerned, an Auditor will only recognize this as an asset if there was healthy annual sales and profits going through books, which has never been the case. Previously, we have discussed the benefits to someone like BP who own a big stake in the BTC pipeline that runs from Azerbaijan to Europe and directly goes through B12.

There also been discussions here about B12 geology in the Kura Basin and Azerbaijan major oil and gas fields like Shah Deniz where BP is a long term operator and therefore would make the ideal partner. Anyway, this is all a pipe dream because the PSA has expired.

Anyway, as requested by JimS and Looed, still sticking around to see if any thing good comes…

Hi Lifeishard. While I am not chucking in the towel, we certainly can’t ignore the fact that we are still inching towards extinction after Deloittes statement to dissolve the company. Sure, we got a cryptic message, but in reality what does that mean? We have had similar messages from the company over the years and yet we continued our march towards implosion, whether that was during the Cayman Court cases, the California cases, the permanent Injunction case, the UK cases or the Texas cases. After each legal event, we got a reassuring message but the situation got progressively worse, finally with the surprising news that Mourant had put the company in to liquidation for a relatively small unpaid legal bill of around $1.2m.

During all these legal tribulations, SN has not felt the moral need to reach out to us. That makes me wonder what his moral code is? Does he have a conscience or has his moral compass is broken beyond repair?

Also, recall many of the long term investors here focused and relied on his comments when an RNS was released. These comments are recorded in the passage of time and can be checked back through multiple news platforms. But my point is this, how many times did he deliberately mislead us in these comments? Inly he can answer that. If he is ethical and has a moral code of conduct through his religious beliefs, then he should know that he bears the majority of responsibility to save us from financial disaster and to put this company back to ‘pre-liquidation’ status as he claimed. On the other hand and to be fair to him, how much is out of his control? Probably a lot especially if the GG are not renewing the PSA or signing-off to the debt repayment plan (for the outstanding tribunal costs).

Overall I think it would be somewhat foolhardy not to think we are on a life-support machine, possibly gasping our last breathes and the only way to snap out of this depression is to get some direct, clear news from them.

For Looed: those people that have and are assisting you, it would be good to know who these are so we can pay our sincere thanks.

Tsbs1 - with respect, I think you are conflating two issues here as the debt default was not the reason for the Georgian Govt dragging FRR to the Arbitration Tribunal (but this was the beginning of the end imho). Nevertheless, I will acknowledge a lot operational failings on SN and FRR’s part, especially taking a ‘headless chicken’ approach to exploration activities in B12 in the early years, which yielded minimal results in terms of oil production. But in all fairness, the real problems for FRR started after the arrival of the Georgian Dream Party in 2012. For investors, this was the perfect storm ie poor operational performance combined with unfriendly political environment. Then the arrival of Hope and ZM on the scene from 2016-onward put the whole situation in a different sphere. The amount of lies ZM spewed (a Georgian by the way), was beyond belief. He will have to answer to his Lord while SN has to answer to us for backing his judgment and his plan to approve the higher share capital back in 2016. A lot of us will take this grievance against him to our final resting place and may be unforgiving. Why? Many here wholeheartedly invested (incl. me) over a very long time, did so for the noble cause of improving our families quality of l life.

But ultimately, I do hold the Georgians responsible for the greater destruction of FRR, first the Georgian Dream Party, followed by ZM. As far as the Americans are concerned, the capitalist, Hope , was opportunistic and within his right to claim on the debt he bought, while SN (the son of a legendary CEO), tried his best to emulate his father’s achievements but failing spectacularly, taking down with him hundreds of small retail investors.

Firstly thanks to JimS and Looed for a somewhat cryptic but positive message following Deloitte’s news that it had reached the end of the road and would apply to the Court to dissolve the company. But what to make of this message…….’we may want to stick around a while longer’? Reading between the lines, my personal view is that heavy US political pressure came crashing down on the Georgian Government following this official news from Deloitte. You could probably hear the fury from the US Senators (led by Ted Cruz), decrying how could this Pro-Russian Georgian Government treat a long-term, loyal American company that has invested over a half a billion dollars in their economy be treated in this scandalous way. What triggered this US reaction? The fact there has been no response to the renewal of the PSA request, which directly influenced Deloittes decision to wind up FRC, is now being used to whip the Georgians (and rightly so). So, it’s now ‘do or die’ time for us and the Georgian-hoodwinker-politicians. Let’s hope this US political pressure finally yields a positive response for FRC, otherwise there will be a heavy price to pay by the Georgians for many years to come in terms of future international integration (EU, NATO)and direct inward investments. Fingers crossed.

Well, been away for a few days and only now catching on this news. Yes, it seems the unstoppable force finally collided with the unmovable force and it is the Georgian Govt that has triumphed. Remember the article we saw a few days back when the Georgian Prime Minister was accusing oligarch for infiltrating and influencing US Institutions to impose sanctions on the Georgians? Well, perhaps that was the fallout from Deloitte throwing in the towel because the PSA expired in August and no further word heard from the Georgians. It is a very sad state of affairs especially after the huge investment was made in their O&G over the years, that they could not find a solution on the outstanding arbitration costs, especially as it was a Georgian at FRR that lied and cheated everyone in to this mess. Let’s us hope karma catches up with them all but especially for SN and ZM……..yes SN has unclean hands in this debacle.