Member Info for MontiBurns

“Just LOLS”.

Well that is a blast from the past from the ADVFN board; but can’t recall the poster’s name. Anyway, interesting that you still hang around FRR BB - did you not get paid from your short? Why all the fret?

Incidentally what big words did I use, may be I can help with that too?

Saucysausage - it is basic knowledge that once a company has been put in to liquidation, its affairs are the sole responsibility of the liquidators (see Companies Act). It is also mandatory to do an investigation of what’s been going on and if there is any fault from the management team. It would have been wise if you did a quick google search for yourself but anyhow, the important thing to note is that the process Deloitte is following is procedural and law-defined such as the resignation of the BoD. Also, if you review Deloitte’s Shareholders notice, 80% of the content is standard, generic template tweaked to FRC’s situation like uncovering of significant liabilities and no liquid assets. So please do not try to present this as only specific to FRC; upon liquidation, all BoD are required to resign. Obviously the twist here is the signaling of bringing FRC back to pre-wind up status but that may require all creditors to postpone their debt to say 3-years from the agreement (if there is cash from SN to partial settlement of debts). All conjecture at this stage so let’s see where we go from here.

Yes that is a distinct possibility that SN could gobble up the company by making an offer to the creditors. But is that privilege not open to all creditors, more specifically to Hope? Do they really want to get involved in a bidding war for an insolvent company? And what are assets in the company and associated value (if any)? No, I don’t think that is SN’s Plan, especially when you re-read the company’s statement this morning: “We are working closely with Deloitte to return the company to the pre-windup status quo for the benefit of all stakeholders”. It specifically says all stakeholders but then we are reliant on their word, which has been less reassuring in the recent past. Is there another unexpected turn in this long, seemingly never ending saga?

Saucysausage - ‘stakeholders’ is a generic and a commonly used word to describe all parties that have an economic interest in a company, which includes shareholders (although the last ones to be paid out in a liquidation scenario). Clearly your depth of knowledge on corporate affairs is a little dim but don’t worry, there are many here who are qualified and sincere to provide a free education.

As far as ‘stringing along’, well, this company has been delisted for over 5 yrs so there is no financial benefit in doing that; but all well-reasoned opinions are welcome.

Having said that, we are at a very critical point in time, so let us unpack the company’s earlier message to plot a trajectory in terms of where this could be heading.

“ We are working closely with Deloitte……………….and we are advancing a joint formal plan in this regard.

Is this plan or proposal to offer something to the creditors? I would think so but how much to the dollar?

“We are grateful for the positive and professional, collaborative relationship we’ve established with Deloitte.”

So good rapport struck straight off the bat. It is in Deloittes’ interest to finalize a deal which will make them look good in the marketplace if they can get any recovery out from this company. Remember, they have already stated in the shareholders notice that FRC is insolvent plus they have ‘uncovered significant liabilities to various creditors’.

ODR1 - the fact the company continues to update us through the Looed conduit is a big plus for me. They have had ample opportunity to slam shut the comm-door on numerous occasions but continue to convey key messages in a somewhat timely manner. I agree that it is no coincide that the company message was timed to Deloittes shareholder notice. Also, the fact they say that they have established a very constructive relationship with Deloitte suggests that are deal may be on the table. For the creditors, as much a it pains them, getting any thing back from an insolvent/in administration company would be a gain in their P&L. But perhaps it has got personal with one or two of creditors like YA but let’s see their reaction.

Anyway, the questions worth considering now is, how much can FRR offer on the dollar and where will this money come from? If it is not from a potential farmout deal but instead iextended by SN, how much would it cost the ordinary shareholder in terms of more dilution? But again, if we were going to be shafted, comms would be dead imo.

So, on the face it, todays revelation can be seen as positive. I also recall a post from Looed that said there is a whole legal team managing all of FRR’s cases, so perhaps this course of direction/action was envisioned.

So is this good news Looed? Me personally, I am a little confused by the company’s message. Why? Well on one hand, FRR let the winding order pass through the Grand Cayman Court ‘uncontested’, but now on the other hand it is working closely with Deloitte to return the company to the ‘pre-winding up status’. I assume, they are working on a similar concept to Creditor Voluntary Scheme (CVS)?

It could signal that FRR may offer, say 10cents to the dollar, to extinguish all creditor claims and return the company to previous ‘status quo’, ie a valid solvent entity. If this is the case, then two things come to mind: 1) FRUS is still part of FRC group and may still hold the PSAs for Georgia and Moldova. And 2) SN/FRR has some money to go down the route of partially settling some Creditors outstandings. But what’s the motivations for doing this now? Also, I can’t see the creditors saying, ok we defer our claims until the company starts selling oil, which means the PSA being renewed by the GG as well as securing significant new investments. Or, perhaps a farm out deal has been reached (the dream scenario) and this is where the money is coming from? Whatever the case, this company message does signal ethical behavior from SN as he is trying to look after many stakeholders, while noting Deloittes comment that they could not identify any ‘liquid’ assets.

So, as per the CWR (Company Windup Rules), the Liquidator must opine within 28-days whether the company is solvent, insolvent or doubtful solvency. Here is their opinion after the 28-day period, noting the winding up order was granted on the 16 Jan.

“The Liquidators have reviewed the books, records and information that is available to them. Following that review, the Liquidators have not identified any liquid assets of the Company, but have identified potentially significant liabilities due to various creditors. Accordingly, the Liquidators have determined that the Company shall be regarded as insolvent, and having made that determination, the Liquidators will convene a meeting of creditors in due course in accordance with the CWR. The Liquidators note that they will keep their initial determination of insolvency under review for the duration of the liquidation.”

Hardly a revelation but I have to admit that the approach taken by Deloitte is professional and courteous and we look forward to their findings and reports.

Thanks for sharing Looed

Thanks Looed. Do you think the reason for a minimal spend on lobbying points to a positive sign? What do I mean by that is perhaps something has already been worked out between SN and the GG and therefore no need for further US political support. What’s your assessment?

Hi Mills240 , thank you for the additional information regarding costs associated with liquidators, which I agree with, as it’s a ‘Big 4’ firm handing the liquidation process. From my heyday, during my banking exams, priority of payouts: , the Administrator was the first to get paid on the list of unsecured creditors (unpaid wages comes next); these outfits would be out of business if they were paid lower down the creditor list. I am sure they have info on liquid assets (namely cash) and if there is zero/minimal, then they will do the minimal to close out the liquidation process.

My post of yesterday was trying to reach out to Tenners to see if he had received any response from Deloitte, after his insistence her that as many shareholders as possible should contact them. Perhaps this was a ploy by Deloitte to rack up billable hours - but I don’t know.

Equally, if he has not received a response, then I would not be entirely surprised as you could argue it’s still early days. Perhaps the best way to get updates will probably be via court dockets.

*Tenners (autocorrect for you).

Tenders - just wondering whether you heard back from Deloitte on anything FRC-related? I think a a shareholder, you do have right to know whay went on and how much cash the company/group had?

Interesting to see that FRC continues to be represented by outside counsel but may be this is a legacy arrangement as liquidation order granted subsequently. Going forward, all decisions concerning FRC should now be made by Deloitte, plus, we know the FRC Board replaced by representatives from Deloitte.

Now, we will wait to see what actions Deloittes decides to take regarding this case, but to note that the amount owed by FRC has never been in dispute. I wonder if YA even know who they should be speaking to at Deloitte. So let us see if YA appeals the order to send this to mediation but they probably won’t as FRC is insolvent and managed by the Receiver.

Perhaps we can politely ask Tenners if he could speak to his helpful contact at Deloittes and find out what they intend to do with the YA case? There is also another case whereby FRC is suing YA for malpractice/market manipulation for forward selling its shares with out authority, so what will happen with this case too?

Tenners, people’s approach/mindset on whether to trust (or over trust) SN is based on the size of their investment and their length of association with the company. Many made the trips to the big smoke to meet the FRR team and many have spent countless hours (over many, many years) to do research for the benefit of all. These experiences have no doubt dictated their sentiment and approach. So, take for example, a punter with a £1000 investment compared to someone with say £25,000, do you think their mindsets will be the same? Definitely not. The person with the small investment has probably long moved on while others continue to hope, mainly because of SN who personally made multi-million dollar investments in FRR and had c.11% of the company. So, regardless of people’s opinion expressed here, please cut some slack for those who continue to believe because they need this to come good for themselves and their families. Having said that there are still many that take a balanced and pragmatic approach to this investment.

Dear Looed, whether you like it or not, but all genuine FRR shareholders are emotionally dependent on you for your continued efforts and comms f especially after the liquidation of FRC. Company’s messages via you and JimSlade have helped keep some of us sane during the turbulent period. I don’t believe any true shareholder would risk losing this access to FRR via you, unless of course they are infiltrators from the other side, seeking to defame you and stop you from posting here. So, please keep your chin up and be assured that we are all behind you. Happy New Chinese Year.

Looed - I have not requested you to ‘work harder’ as you put it and if I have, perhaps you can refer me to that post where I have mentioned this. Also, it is not my nature to impose demands on people who are already going above and beyond; nobody really disputes your efforts in this regard. In fact, after your post as to how you ended up in this trusting position with FRR, I am more appreciative of your work. Having said that, I try to keep an open (and fair) mind on FRR and that means presenting the good, the bad and the ugly.

Let me try to play the devils advocate on behalf of SN: You say all this happened on SN’s watch, which I do not completely disagree with but the question is how much and how much was out of his control? Well, firstly, the wheels started to come off the FRR wagon when the Georgian Dream Party came to power from 2012 (I will pass over the Russian invasion of North Georgia in 2008). Then the covert acquisition of the CLNs by OMF when SN had signaled to the majority loan holders (DDJ and Plainfield) that he should be given first right of refusal but they were so cheesed off with him that the loans were sold to OMF without his knowledge at 20cents to the dollar (if my memory serves me right). Once this event occurred, Hope forced his way on to the Board and started planning ways to exercise his debt and takeover the company ( his modus operandi). Then the other significant event was the appointment of ZM as the CEO who was supposedly the local guy tasked to keep smooth relations with the GG, but we know how that went with initiation of the Arbitration hearings. On SN side, he worked his ass off on the political side via lobbying GOP representatives, including personally meeting Bidzina Ivanshivili with Senator 2013, promoting FRR via the Atlantic Council and trying close profit sharing agreements with Moldova and Ukraine. There were also numerous commercial meetings held to farmout B12 to allegedly BP.

Your point about no official contact from the company for 5-yrs is acknowledged but again if the veil of secrecy was to stop leakage of important information to dark forces like Hope and ZM, then it is understandable. Plus, the last 5 years has seen significant legal activity so it is justified.

Anyway, I will reserve judgment on SN until we have some clarity on where we stand but in the meantime, the company has kept the door ajar on some level of communication via Looed and Jim, so not completely ignoring us.

Thanks Tenners. My view? Similar lines but more severe in my criticism of ZM. I would even call him out as a pathological liar. He met many of the ordinary retail shareholders in the big smoke who had invested bucket loads of more money in to FRR based on his investor presentation get-to-gethers, while at the same time, and in the background, there were huge disputes with the GG and Hope/OMF. I can’t really say how much influence SN had at that time because there were some rumors that he was in ill-health. Also, it appeared that SN was trying to be the peace-broker between Hope and ZM based on the internal emails that were released to the Cayman Court. I would also say that ZM managed to convince many intelligent people of his business acumen and his presentation skills including SN, but ultimately his fraudulent behavior got exposed. Talk about throwing it all away for money. Worth also saying that one of the reasons why Dustin Aro departed somewhat unexpected from FRR was due to disagreement with ZM, who was the CEO at the time.

On SN, he has come across as someone more honorable that ZM or Hope (admittedly not a high benchmark) but his acid test will be coming soon on how he treat his shareholders once the reorganization of FRR is complete.

Given your shareholding in FRR goes back nearly a decade, I would be interested to hear your views on ZM.

Tenners - I think I can answer your question about conflicting situations concerning creditors getting their mitts on FRUS. Recall before the liquidation of FRC, only two major companies fell in to the hands of liquidator (via Hope exercising his default under the CLNs), FIC and FRCC. Under FRCC, the major entity was FEGL, which held the Georgian PSA, hence the management’s urgency to assign its rights to FRUS, which was under FRC. Now, following the liquidation of FRC, FRUS is presumably under the control of Deloitte, but what is the status of the PSA (expired or nrenwed?). If expired, FRUS is not important, especially if arrangements have already been made with the GG.

Tabs, it is a whirlpool right now in terms of what is going on with FRR and it’s shareholders, sadly you will have to rely on your wits and instinct to guide you but to me Tenners mask has slipped so you will have to make your own mind up.

My question for Looed would be has he ever had the chance to speak to SN directly? You don’t need to answer this if that puts you in a vulnerable position.

Tenners, the thing I am really confused about in your postings was that you said FRUS was separated from the FRC Group and this entity was now controlled by SN et al, where the asset resides and where all our hard earned cash went in to. You were presenting this as a matter of fact but I assume you arrived at this conclusion based on Looed’s previous posts where he mentioned that despite the best endeavors of Hope/OMF and ZM/GC, they could not ‘get to’ FRUS. From this you deduced that FRUS’s shareholding was reconstituted, but is this not supposition on your part?

Instead of asking Looed about FRUS, you can simply request Deloittes to clarify whether FRUS is a wholly owned subsidiary of FRC and what is the status of the Georgian PSA. My own deduction from the information we have (albeit on the face of it only), is that an MOU was signed with GG to renew the PSA but with a new unrelated entity (probably related to SN but not FRC Group), hence our reliance on SN to bring us in to this new company once the reorganization was complete. But PSA renewal is also dependent on repaying the GG for the Arbitration Costs and probably for the unpaid workers in Georgia. This was chunk of change owed at c.$3.6m. Who is going to pay for this? All I can see is lots of creditors and financial liabilities in FRC. I would be surprised if any creditor managed to recover any thing after the liquidator has added his expenses. Also, from my own experience, the level of forensic investigation in to these type of situations is depended on the money available in the company or extended by other stakeholders like creditor or even shareholder (action) group. If there is no cash, Deloitte’s will only do the basic necessaries.

Now, while we are all now legally exposed, I am reassured by Looed’s and Jim’s posts that we are in the same boat with SN, but minus ZM, Hope and YA who have all caused untold damage to FRR both financially and from time perspective. How many cases had SN and team had to fight? US, UK, Cayman, Georgia. All this cost money and time and who paid for it all? Definitely not FRC.

As far as approaching Deloittes, all I would say is ‘not in my name’. I think the best you could achieve here is some basic answers but even then, not sure how accurate they could be given the complexities, spanning over a long period of time. I think you just need to sit back and let this process take its natural course, and in time, we will get some answers. Furthermore, there are some really big creditors in FRC with more resources and legal know-how than us and who are probably doing the job you are attempting to do given the amount they have at stake like YA. Once the liquidation process is complete, you can request a report from Deloittes.

One also wonders what was dug up from the FIC and FRCC liquidation process and whether those findings are available to us. Recall the CLNs of c.US90M+ were issued by FIC, secured by corporate g’tees.