|What was liquidation payout on this?|
|Think you played a good guardian here erstwhile2 (I'm just looking months and months later). Most "researchers" in this will have been warned off by your posts - certainly anyone daft enough to look in after digesting them deserved all they got.
What was it all about, this? Who won and who lost? Can't see that anyone ever really bought in - other than some utter fool "financial adviser" in the SW who is presumably out of the country now. Or (with any luck) dead.
But even so I doubt he put a real dent in things with his poor-old client's hard-earned money.
If someone made money then someone lost money - but who?? Seems a lot of bother to go to for my £500 in late '05.
|So finally push has come to shove. Weiss and one other arb hedgie have forced an EGM to require complete liquidation of the company. The NAV is around 24p supposedly, of which 5p is cash and the balance in securities which I think are essentially valueless (so the real NAv is not much more than 5p). If you own LPI, a 15.5p bid is a top price - watch it crater if anyone tries to sell meaningfully.|
|More detail on Nutracea's legal action against Langley - from their most recent SEC filing 14 Nov 06:- net result if they win is Langley pays back the £9m or so it has from the recent sale of the 7m NTRZ shares
"3. MARKETABLE SECURITIES
On September 8, 2004, we purchased 1,272,026 shares of Langley Park Investment Trust, PLC, a United Kingdom closed-end mutual fund that is actively traded on a London exchange. Per the Stock Purchase Agreement, we paid with 7,000,000 shares of our own common stock.
Per the agreement with Langley, we may sell 636,013 shares of Langley at any time, and the remaining 636,013 shares of Langley and the 7,000,000 shares of NutraCea are escrowed together for a 2-year period ending October 7, 2006. At the end of the period, Langley's NutraCea shares are measured for any loss in market value and if so, we must give up that pro-rata portion of our Langley shares up to the escrowed 636,013 shares.
As of September 30, 2006, our shares have not lost any value. However, the Langley shares are marked down to their fair market value of $256,066.
Any unrealized holding gains and losses on the marketable securities are excluded from operating results and are recognized as other comprehensive income. The fair value of the securities is determined based on prevailing market prices.
On September 8, 2006, NutraCea filed a complaint in the United States District Court for the Eastern District of California, Sacramento Division, against Langley for, among other causes of action, securities fraud, breach of contract and rescission relating to this transaction, NutraCea also filed a placeholder complaint in the State of New York to preserve its rights relative to venue and jurisdictional issues. NutraCea is seeking rescission of the Stock Purchase Agreement and return of all of NutraCea's shares issued to and held by Langley. NutraCea is also seeking compensatory damages representing the loss in value as well as attorneys' fees and costs incurred in the litigation. "|
|Quite right too....thanks for that. very useful reminder indeed....eagle eyed stuff etc. LPIs only major asset went from 1.40 to 2.65 in the same timeframe, so I would expect the share price to have moved from 11p.....still I seem to recall saying if you wanted the NTRZ exposure (which was all you got from LPI), you could have bought NTRZ directly for a 90% gain in a liquid stock.
Anyway, thats now by the by as I think all of the NTRZ will have been sold, leaving LPI with £6m of net cash (about 8p/share which they will keep subject to the legal action against it). I do however think there is a decent bid for LPI stock at present levels which I simply can't fathom. If I have got something wrong with the value of some of the underlying assets, would one of the perma bulls on the stock let me know what it is instead of just pointing out information which I can readily see on a price screen.|
Just to remind you as promised.
Donemyhomework2 - 17 Oct'06 - 09:04 - 165 of 179 edit
Well the market does not seem to agree with you erstwhile2.
When it doubles your real value of 7p I will remind you|
|My motto has always been if you dont understand something dont buy it
if anyone from milton reads this please think very carefully before buying anymore for your clients|
|A Langley portfolio constituent stock has been subpoenaed by SEC in relation to its Langley Park transaction and Langley's officials. The following is an extract from Aberdene (now Canyon Copper) recent filing at the SEC: (the filing was made on October 2006)
"On May 25, 2005, the United States Securities and Exchange Commission (the "SEC") issued a formal order of private investigation to Canyon Copper Corp. (formerly "Aberdene Mines Limited"). In connection with the investigation order, we received subpoenas from the SEC requesting the production of certain of our documents from several of our former employees, relating to, among other things, our transactions with Langley Park, PLC and the principals of Langley Park, PLC certain of our news releases and certain materials sent to our stockholders. We have since received additional document production orders from the SEC. We have complied with all document requests and are voluntarily complying with the investigation. We have also responded to any informal requests for information from the SEC."
Actual link follows: http://sec.freeedgar.com/displayHTML.asp?ID=4702833 (go to page 20) - if it looks like "document not found, keep refreshing your page.
Are the SEC on the trail of LPI and its somewhat odd existence and management?|
|good post erstwhile2
you should think very carefully before buying these|
|The Global Diversified legal proceedings description I described above can be found here: (Scroll down to page 19 for the relevant text). Needless to say, LPI settled out of court and the transaction never went ahead
|And finally one of the portfolio companies (in fact the only one with any real value, with any serious management, and the one which LPI is now trying to liquidate its most valuable stake in) has issued legal proceedings to rescind the original contract. (New release from LPI 6 Nov re NTRZ lawsuit)
EDIT: LPI now notes (7Nov) that the court has denied the injunction requested by NTRZ subject to the sale proceeds being placed in an escrow account. I guess there is more legal action to come.
Before commenting on the likelihod of success, heres what would happen if the contract was rescinded: LPI would lose 7m shares of NTRZ, worth in todays money about 13.5p of LPI NAV. LPI would "gain" 1.27m of its own shares (or the number of shares outstanding would fall from 59.3m to 57.6m). The net effect would be a loss of about 13p in LPI NAV terms.
This still assumes that LPI's other portfolio stocks are actually worth something on a sale by LPI. I contend they are not worth a fraction of their "puff" OTC bulleting board valuations. And for any that might be worth something, if NTRZ are successful rescinding the original contract, any other real companies may well also want to take legal action.
So if NTRZ win, LPI should be worth approximately nothing.
So, a few questions:
1) Can LPI even afford to defend itself in an extended case? Does it have the cash to hire counsel? I seriously doubt it - they started to sell NTRZ shares (1.4m) but the poceeds are now required to be in escrow while the legal proceedings take place.
2) What grounds does NTRZ have, are they likely to win? They are going to have to prove that the whole of LPI was a sham setup for the purposes of enriching its management. Something along the lines of much of my earlier posts (post number 138 in this thread). Nutracea will claim that they used LPI to raise finance at a time when they needed it in good faith, being told that they were one of 15-20 "real" companies in which LPI was investing. For them to find out after 2 years that they were the only company of substance may give them very serious grounds to rescind the agreement. It will go to what was actually said in the marketing presentations etc which were shown to NTRZ before they went on board etc. I think they will make a very strong case, but I am sure also that LPI will point to a batch of executed documents and say a deal is a deal. LPI did settle in some other cases though - see below
3) Is there any precedent here? Well, some:
(a) Cobalis rescinded its share swap arrangement (with both sides paying their own costs) in April 2005.
(b) More relevantly, Global Diversified (GDVI) one of the original share swappers was also able to get out of its deal, but without resorting to litigation, also in the first half of 2005. GDVI's basic claim was that they were misled as to the nature of the other companies in the portfolio.|
|I agree 100%...put another way a purchase of LPI is in essence a purchase of NTRZ but you simply let the managers decide when to sell the NTRZ. For the life of me I was not recommending a purchase of NTRZ (or LPI for that matter) - but your point is good.|
|But if LPI are selling their stock at this level, it may not be such a good idea erstwhile2.|
|Perhaps also because NTRZ has now moved to $2.02 which implies 12.4p per LPI share.....if you like LPI, just buy NTRZ! More liquid, smaller spread, no stamp, no management fees|
|On the bounce as the overhang is cleared I assune.|
|Hi Donemyhomework - yes of course it is based on knowledge of the overall structure and the investment objectives set out not only in the interims but in the launch prospectus etc, but specifically there is nothing else in the portfolio that they can realistically sell.|
Is the prediction you are making based on note 6 to the interim accounts which says they will start liquidating part of the portfolio in October 2006 to provide cash to its lenders?|
|RU trying to say something bisiboy?|
|When it doubles my "real" value of 7p, assuming NTRZ hasn't moved significantly, and someone is able to actually sell any decent volume, then I might indeed have to reassess to see if I have made a mistake. But I dont doubt the price itself (for NMS volumes) could go anywhere.
Also lets bear in mind that if NTRZ gains in value my real value follows suit step for step. When I originally posted they were about $1.40 representing about 10p in LPI NAV equivalent: if you like em, buy em, (and not LPI) on liquidity grounds alone.
I am only exorcised about the structure here - nothing else. If you do own LPI and make money because NTRZ performs, I couldn't be happier. But I think you would have made more by buying the underlying! You can't make money on LPI in any other way. I simply hope that my continued posting on here stops an unsuspecting retail punter from diving in without open eyes, or at least makes them pause for thought.
I will make a small prediction too: LPI will start selling down its NTRZ stake soon so as to provide cash for its lenders, its management fees and expenses.|
|it is actually more serios than that milton act on a discretionary basis for clients
hope no one from the fsa looks at this site!|
|Well the market does not seem to agree with you erstwhile2.
When it doubles your real value of 7p I will remind you.|
|Miss the starters - wait for the meal!|
|Well, if you weren't aware of it you might think so, but this is simply the putting into effect the actual clawback mechanism. this is obviously well known (given they put a NAV release showing the post clawback impact out every month for the last 2 years), and ought to be in the share price. If some people think it is "new" news and want to buy on the strength, good luck to them. My figures in my previous email are based on the post clawback number of shares outstanding.|
|Surely if they are buying back their own shares at 1p for cancellation this will improve the share price.|