Burford Capital Share Discussion Threads

[bbmsionlypostafter] 18/8/2019 14:45

Oh dear. This is just getting completely ridiculous now.

Monday is going to be interesting.



Burford – was there Insider Dealing by the Deputy Chairman?

By Nigel Somerville, the Deputy Sheriff of AIM | Sunday 18 August 2019

(For those of you who can't read the full article, yeah, looks like maybe there was).

[williamcooper104] 18/8/2019 14:16

Thanks Buywell - care to share your analysis of why £4?

[daftweejock] 18/8/2019 13:57

What type of person talks about themselves in the third person I wonder...

[buywell3] 18/8/2019 13:56

buywell has had a long think about this one and come to the conclusion:


The Investment Community needs the likes of Muddy Waters

buywell now calls BUR back to 400p

dyor

[trident5] 18/8/2019 13:54

Thanks Adnan - any mention in Napo's accounts (although contingent gains and liabilities are accounted for differently)?

[sweet karolina2] 18/8/2019 13:53

sogoesit,

The people who will lose out overall are those who try to resolve complex situations into binary outcomes and then assign those outcomes an equal probability. The BUR situation is not a coin toss.

The first thing a potential investor needs to decide is are they short term trading (can be both long and short) or long term investing as the answer to that drives a fundamentally different approach to what comes next.

The secret to long term investing is proper research, critical analysis of your own and other's research, then once invested keeping the investment under continual review, avoiding optimism and confirmation bias and preserving your capital early when the situation changes for the worse.

[adnan17] 18/8/2019 13:24

Trident

To answer your question

1. It shows that for the 2012-13 Annual report it describes its litigation claims in detail:

"In November 2012, Glenmark Generics announced the settlement of
Paragraph IV litigation with Janssen Pharmaceuticals, Inc. Under the
terms of the agreement, Glenmark will launch a generic version of
ORTHO TRI-CYCLEN® LO tablets as early as December 31, 2015"

See link on page 32: (hxxp://www.glenmarkpharma.com/sites/default/files/Annual%20Report%20FY%202012-13.pdf)

2. In the 2013-14 Annual report (the year in which the Awards were made between Napo and Glenmark) it states the following on page 20 (hxxps://www.glenmarkpharma.com/sites/default/files/Annual%20Report%20FY%202013-14.pdf):

"Profit after tax for the year was Rupees 5,456.03 Million as against
Rupees 6,282.90 Million in the previous year mainly influenced due to
provision of Rupees 2,175.36 Million ($418m) towards provision made for product
litigation/compensation claim."

"Provisions increased to Rupees 2,599.53 million mainly on
account of provision made for product litigation/compensation
claim of Rupees 2,175.36 Millions ($418m)."

It appears that Glenmark made a provision of $418m to settle future legal/litigation claims in the same year as the Napo v Glenmark case. However, this time Glenmark does not provide detail as to the litigation provision (Maybe it is bound by the Confidentiality Agreement).

[trident5] 18/8/2019 12:56

But shouldn't those awards show up in the accounts of both?

[adnan17] 18/8/2019 12:51

Yes SK, we must judge what was known at the time. I.e. what was known at the end of 2013.

So let's go through the "SETTLEMENT AGREEMENT one more time:

hxxps://www.sec.gov/Archives/edgar/data/1585608/000104746917003695/a2232030zex-10_60.htm

1. On 29th December 2013, A SETTLEMENT agreement was signed by Napo and Glenmark.

2. The beginning of the SETTLEMENT agreement states that on 4th August 2011 Glenmark sued Napo:

"Glenmark submitted a Demand for Arbitration to the International Centre for Dispute Resolution (“ICDR”) against Napo" (so basically Glenmark was suing Napo)

3. Then the SETTLEMENT agreement states that Napo then counter-sued Glenmark on 9th September 2011:

"Napo submitted an Answer, Affirmative Defenses and Counterclaim for Breach of Contract in the Arbitration"

4. The SETTLEMENT agreement then states the following in Section 2, which appears to show that a SETTLEMENT was agreed upon by the two parties that were both suing one another:

"Napo and Glenmark agree to be bound by the Interim Award and the Partial Final Award (collectively, the “Awards”), and Napo hereby waives its right to oppose, object to, or appeal Glenmark’s confirmation of the Interim Award and the Partial Final Award."

Hence it appears that Glenmark confirmed an Award and Napo waived its right to oppose or object to the Awards.

5. Unfortunately it also states that the Awards were to remain confidential:

"In accordance with the confidentiality provisions of Paragraph 12 below, Glenmark agrees that if it seeks to confirm the Awards, Glenmark shall submit to the court an application or motion requesting that the Awards be filed under seal prior to filing the Awards in the public record. In connection with any motion to seal the Awards filed by Glenmark, Napo acknowledges and agrees that it shall be the burden of Napo, not Glenmark, to demonstrate to the court that the applicable standard for sealing the awards is satisfied, and Glenmark agrees not to oppose Napo’s submissions."

6. Now, let us analyse Burford's business model. This is taken from their 2012 annual statements, which states that Burford is entitled to any SETTLEMENT awards

"In the second half of 2012, Burford financed a law firm’s activities in a matter that then settled only a few months later, before year end. Burford is entitled to its portion of the SETTLEMENT PROCEEDS over time"

So if there was an Award and Burford took its cut, then it appears to all be above board.

[galatea99] 18/8/2019 12:25

"Burford chiefs under fire over secret payouts haul: Just how much HAVE they extracted from legal firm, short-sellers ask – as MoS reveals deals worth £216m"

"However, The Mail on Sunday can reveal that Burford is the only company on the FTSE AIM 50 index – which charts the largest firms on the junior stock market – that does not adhere to the two traditional governance codes set by the Financial Reporting Council and the Quoted Companies Alliance.

Instead, it complies with the Guernsey Finance Sector Code of Corporate Governance. Burford would have to move to the FRC’s code if it wants to move up to the main London market. Burford said it was happy with the Guernsey code, which it said is similar to the UK codes."




I wonder whether the new CFO will reveal this information?

Well, maybe not, somehow..............

[williamcooper104] 18/8/2019 11:46

"SFO investigate" - that would be a first

[sparusty] 18/8/2019 10:41

Can we see their books as to how they account for that. :)

[nigelmoat] 18/8/2019 10:10

From the Daily Mail Money section 'Muddy Waters has already made a gross profit of around £12million from shorting Burford.'Nice work for some if that's your game!

[bbmsionlypostafter] 18/8/2019 09:48

‘Hocus-pocus accounting’ or legitimate valuing? The question at the heart of the Burford vs Muddy Waters dispute

In March 2001, the US business magazine Fortune published an article timorously headlined “Is Enron Overpriced?” The writer, Bethany McLean, said that the US energy giant and stock market darling was made up of “a bunch of complex businesses” which made its financial statements “nearly impenetrable”. Yet its shares were highly prized.

Few took notice at first, but McLean had begun tugging at a thread that meant Enron unravelled rapidly. Before the year was out, the company, once valued at $70bn (£58bn), had filed for bankruptcy.......

[5chipper] 18/8/2019 07:58

This morning’s papers..

“American regulators have been handed claims of market manipulation in the trading of shares in litigation funder Burford Capital.

The US Securities and Exchange Commission and the Department of Justice were passed details of alleged share manipulation minutes before short-seller Muddy Waters released its dossier on Burford this month.”