Cattles Share Discussion Threads

[sheridan3647] 28/7/2009 08:44

I'm not a shareholder of Cattle's but am interested as a chartered accountant at the profession's response to the currrent situation

Both the ex CEO and Chairman of the Audit Committe had been senior partners with PwC and would have had established relationships with the audit partner - can PwC claim to have been able to act independently?

[rodeogirl] 27/7/2009 22:18

Posted by dreddj on iii @ 21-59

Thought some may find interesting - goodluck and goodnight.

As I do not expect them to be answered I thought I would share with you the questions which have been sent to CTT via Computershare and direct:
QUESTIONS FOR AGM

1 Please say what the Groups Impairment Policies are in words which an ordinary shareholder can understand.
2 Please say how these policies have been incorrectly applied.
3 Which companies are affected by this incorrect application
4 At what levels of staff were the impairment policies applied.
5 When did knowledge of this incorrect application come to the knowledge of any director of the companies concerned
6 When did knowledge of the incorrect application come to the knowledge of Cattles plc
7 How did knowledge of the incorrect application come to the knowledge of Cattles plc
8 Please explain what was done in incorrect application of impairment policies and how this means that a provision in excess of £700million in excess of that originally anticipated
9 By firm how much was paid to internal auditors in the years ended 31.12.2006, 2007 and 2008?
10 By firm how much was paid to external auditors in the years ended 31.12 2006,2207 and 2008?
11 Were additional sums paid to any other accountancy firm in the years ended 31.12.2006, 2007 and 2008 and, if so, how much to whom?
12 Do any of the surviving directors associate themselves with any of the information published by the company since 01.01.2007 and available to its shareholders and in particular:
Interim management statement dated 23.10.2008
Statement re share price movement dated 11.12.2008
Pre close trading statement dated 18.12.2008
Cattles plans reduction in new lending and costs dated 7 January 2009
Cattles withdraws its application for permission to take retail deposits dated 26.01.2009
Cattles plc Annual Report and Financial statements 2007
Cattles plc Interim financial Report 2008
Cattles plc interim announcement for 6 months to 30 June 2008
Pre Close trading statement dated 19 June 2008
Interim Management Statement dated 9 May 2008
Prospectus for Rights Issue dated 23 April 2008
Trading statement dated 13 December 2007
13 If any of the directors associate themselves with any of those documents can each one of then say which, if any, of the statements contained in them are true or, if it is easier, which of the statements contained in the documents are untrue.
14 Were any changes made to the terms of reference of the Audit Committee during 2008?
15 How many times did it meet during 2008?
16 How many times has it met during 2009?
17 How effective has the Audit Committee beein during 2008 and 2009?
18 When were each of the documents mentioned in question12 reviewed by the Audit Committee?
19 When did the Audit Committee become aware of the breakdown in internal controls?
20 What steps had the audit committee previously taken, in the preceding 24 months from when it became aware, to test the relevant internal controls?
21 Were the internal controls in question part of the Group's overall risk management systems
22 How had these internal controls been tested by internal auditors since 01.01.2007?
23 How had these internal controls been tested by external auditors since 01.01.2007?
24 Have any of the members of the audit committee since 01.01.2007 ever been employed or engaged as a consultant by or been a partner or director of any of the firms engaged by the group as internal or external auditors and, if so which, when and in what capacity?
25 When did the audit committee last review its own performance and what was the outcome of that review?
26 Who is the present chairman of the audit committee?
27 What is the recent and relevant financial experience of the chairman of the audit committee?
28 Do the directors of the company acknowledge that the board of directors of the company as a whole are collectively responsible for the success of the company?
29 Has the company been a success, in financial terms for its shareholders, since 01.01.2007?
30 In relation to information made available to shareholders since 01.01.2008 have the directors satisfied themselves as to the integrity of the financial information and ensured that financial controls and systems of risk management are robust and defensible?
31 Please explain how it is necessary to consider making excess provisions for impairments of £700 million in 2009 if the group has financial controls and systems of risk management which are defensible?
32 Why are details of the bonus structures agreed with the directors not made available to the shareholders with the rest of the directors service contracts?
33 Please say what the bonus provisions are, and what bonuses have been paid, to any person who has held office as director of Cattles plc since 01.01.2007.
34 Please confirm that no bonus payments in cash or shares or otherwise have been or are to be paid to any of the employees of the group whose employment has been terminated in consequence of the findings of the internal review by Deloittes/Freshfields?
35 Why is James Drummond smith not contracted to the company in the same manner as other executive directors have been?
36 What explanations were required by the board of Ian Stephen Cummine; David Postings; Mark William Gerard Collins; James Joseph Corr in relation to their conduct in relation to the business of the Company after 01.09.2008?
37 When was the contract of employment of David Postings terminated?
38 What payments have been made or are proposed to be made to or in relation to ( such as pension funds contributions) David Postings after termination of his employment with the Company?
39 What, if any, steps have the board taken to prevent the former employees of the company who may have been responsible for loss to the company from dissipating their assets ?
40 Did any members of the board read the item published in Crains Manchester Business on 27th April 2009 relating to Cattles Invoice Finance?
41 How much of that article was true?
42 In particular:
Had the company entered into an exclusivity agreement in relation to Cattles Invoice Finance on or before 27th April 2009?
Had the Company engaged Ernst & Young in relation to the disposal of Cattles Invoice Finance Ltd before 27.04.09
Had the company engaged Ernst & Young in relation to the disposal of other businesses before 27.04.09
If the answer to either of the preceding 2 questions is Yes please give details of when they were instructed and in relation to which businesses
When was information in relation to the proposed disposal made known to the directors, bankers, stockbrokers, internal and external auditors, bondholders and shareholders?
43 What other options was the company exploring in relation to Cattles Invoice finance on 5th May 2009 when it informed the market of its consideration?
44 Why was such announcement not made before 5th May 2009?
45 Why is it necessary or advisable for the company to make the level of provision for impairment which is now proposed? Is it because loans which members of the group have made are not going to be repaid in full or for some other reason?
46 Will the effect of the provision proposed be to diminish the Total Shareholders Equity to a negative amount?
47 How many transactions are involved in the failure to apply the company's impairment policies correctly?
48 What were the expectations for the results of the company as at 7th January 2009?
49 What foundation was there for the statement by the former chief executive of the company on 26January2009 that "the Group continues to trade profitably" and what were the then expectations for the profitability of the Group for y/e 31.12.2008?
50 How much has the independent forensic examination by Freshfields/Deloitte's cost ?
51 Is the result of that investigation going to be shared with the shareholders ?

SRN C0772949774

And The supplemental as to whether the questions and answers would be published on CTT website for the benefit of shareholders.

[tom111] 27/7/2009 22:14

Yes ive had some good deals to cancel the lose i anticipate but thats not the point we were misled into making wrong decisions through no fault of our own,i think the whole thing is disgusting and i hope someone pays the price.

[risk1] 27/7/2009 22:01

luckly I made my grand back elsewhere

good luck m8

anything positive is a bonus but I expect nothing

[tom111] 27/7/2009 21:58

Likewise,just want it over and done with and move on

[risk1] 27/7/2009 21:54

my guess is admin over d4e

this will all be known very soon

have already written this off anyway

[tom111] 27/7/2009 21:52

Thanks anyway we have to face the music sometime i suppose,good luck to you also i think we all need it now.

[rodeogirl] 27/7/2009 21:42

tom111

Wish I could post the news we all want, but I can't, so thought I would just share any information out there.

Good Luck

rg

[tom111] 27/7/2009 21:35

Not very encouraging

[rodeogirl] 27/7/2009 19:42

Posted by Hottipinvestor on iii board @ 19-24

[alistair4444] 27/7/2009 00:45

Once again John thanks

[cpl593h] 26/7/2009 21:36

The Cattles staff should have registered with The UAW; then 'Bama would've taken care of the pesky bondholders for them.

[badhshah] 25/7/2009 14:01

Thanks JR50 for making things clear for us

[jr50] 25/7/2009 11:20

Acceleration on event of default - trustee's right to indemnity

The recent House of Lords judgment in Concord Trust v Law Debenture Trust Corporation plc [2005] UKHL 27 concerned a bond issue under which an attempt was made to accelerate repayment on the occurrence of a disputed event of default - many of the issues raised could also be relevant to loan facilities.

In the Concord case, under the terms of the trust deed, the trustee could be required by a percentage of bondholders to issue a notice of acceleration upon the occurrence of an event of default. This was subject to the trustee being "indemnified to its satisfaction". The issuer disputed the existence of the event of default. Before accelerating, the trustee demanded an indemnity against any possible exposure to a damages claim from the issuer if it turned out that there had been no event of default. The bondholders refused to give such an indemnity and the court held that the trustee could not reasonably insist on it "unless the risk is more than a mere fanciful one". In the circumstances, it was held that the indemnity could only cover the legal costs likely to be incurred in an unsuccessful defence of the acceleration notice.

The judgment clarifies that:


the obligation on a trustee to accelerate bonds is not dependant on it being able to uphold the validity of the acceleration against the issuer
in the absence of any contractual undertaking (express or implied) or any negligence, a trustee is not at risk of incurring liability to an issuer in damages for loss caused by invalidly accelerating bonds and is not entitled to an indemnity to cover that risk.
Whilst there are similarities between the role of the trustee in a bond issue and the role of an agent or security trustee in a syndicated loan, we believe there are key differences which make it unlikely that the case will have any great significance for the syndicated loan market:
the agent or security trustee would probably be one of the syndicate banks and would be closely involved in any decision to call an event of default
in practice lenders will only call an event of default where they are certain that an event of default has occurred.

[optomistic] 25/7/2009 11:04

Thanks Wooly62

[keya5000] 25/7/2009 10:51

I myself think this action is purely the standard legal responce that we should have expected from the Bondholders after the default. There is no point having 'default clauses' and then not stating your legal position by not taking further actions available.
I am sure the Bondholders will come to an agreement, little point of anybody here forcing the issue. Best chance for everyone would be a consensual restructure resulting in a less riskier lower debt Cattles going forward over the next few years.
Only a very small holding here but I dont think its all over yet by a long way.

[wooly62] 25/7/2009 10:20

optomistic - please see the other CTT thread re RNS comments

[wooly62] 25/7/2009 10:18

StoA - That's a very sensible post. I've also thought D4E was almost a certainty too, but whether it wiped out shareholders or actually provides a chance to get money back is uncertain. A smaller shareholding in a solvent and recovering business may hold real value, so was (is) my hope for the outcome. I'm almost certain the banks will have the best security and bondholders are not going to be given the chance to move up the pecking order at the banks expense. The holders may think the banks won't dig their heels in as it will result in failure, but I fear they will prefer to take their chances there than to let £400M of the funds which would normally go to reduce bank debt pay bondholders instead. I view the acceleration attempt very negatively in terms of both the future of CTT and for shareholders. Let's hope we're both wrong.

[optomistic] 25/7/2009 10:01

No one any comments to make on the latest RNS:



TIDMCTT

RNS Number : 2868W
Cattles PLC
24 July 2009

?


24 July 2009


Cattles plc




Acceleration of amounts payable by Cattles plc to holders (the 'Bondholders') of
its GBP400,000,000 7.125% bonds due 2017 (the 'Bonds')

Cattles plc (the 'Company') announces that it has received a notice from the
trustee in respect of the Bonds (the 'Trustee'), stating that the Trustee has
been instructed by a requisite percentage of the Bondholders to accelerate, with
immediate effect, all amounts payable by the Company to the Bondholders.

The Board is considering its position in light of the notice and the fact that
it is has received written expressions of support from representatives of its
key financial creditors towards achieving a consensual restructuring.

The Company remains in discussions with its key financial creditors with a view
to achieving this objective.

A further announcement will be made when appropriate.

Enquiries:


Margaret Young, Executive Chairman, Cattles plc
Paul Marriott, Financial Dynamics


Tel: [phone]

[alistair4444] 25/7/2009 09:43

John Good on you and well done I have always respected your views . Tell you the truth there the only ones I really read . Look forward to your views after Cattles is relisted Thanks again .

[spectoacc] 25/7/2009 07:17

I'd almost go the other way Wooly62 - I've said throughout that the shareholders would be wiped out, but the reason it's not happened yet is the disagreement over subordination. That opens the door for a resolution that might - might - allow the shareholders to keep some ownership of an otherwise insolvent (IMO) business.

D4E or dead IMO; more questions to be asked at next week's AGM..

[wooly62] 24/7/2009 23:20

It's posturing at best, terminal at worst. I wonder if this is intended to scare the banks into allowing the interest payment (in return for agreeing to defer this claim). I don't see the banks allowing so much money out of the business. There is no prospect of anyone else pumping in cash to replace it and I can't see the banks funding payment. Are the banks shafting bondholders? I don't think so - the banks held their security before the bonds were issued and they're perfectly entitled to crystallise their position. Negotiations between CTT and the banks are said to have been going well, but the disagreement between the banks and bondholders may prove fatal.

[smurfy2001] 24/7/2009 22:25

So Cattles are now dead then? Standstill agreement has been given the two fingers by the sounds of it.

They are effectively trying to get their money back before the banks do, this is why it's happening, so the bond holders are rightly avoiding a "possible" royal shafting.

[wooly62] 24/7/2009 21:02

Redd "Considering you like to post drivel too it is probably not surprising you enjoy reading it as well which makes your defence somewhat irrelevant as well as........pointless;-)" Coming from someone who seemed incapable of understanding the difference between equity and the value of equity this is most amusing. Thanks for making me a laugh, at least you've now made one valuable contribution.

Jabb - The RNS confirms what was discussed in the FT the other day - did you see that? It wasn't clear what proportion of the bond holders were driving the matter, all it said was that the required level of not less than 25% had been reached and that they were issuing an acceleration letter. It's worth reading the FT article if you haven't yet seen it, although the outcome is of course uncertain.