Manolete Partners Share Discussion Threads

[maddox] 02/12/2020 11:54

Manolete are presenting online at a Proactive event tomorrow night:

www.proactiveinvestors.co.uk/register/event_details/300

[maddox] 30/11/2020 16:30

sirrux,

I take a 'kay sera sera' view on these cartel cases, it'll be fantastic if they deliver but are too far off to affect current share price. However, what we also have is a another bunch of 'significant' cases (over £1m in value) that should start dropping - we've had a couple recently but the frequency should increase. These have the prospect of a positive RNS, are big enough to move the dial, and hopefully kick some life into the share price.

[sirrux] 30/11/2020 11:22

I see there's a CAT Claims Management Conference for second wave claims pencilled in for Friday this week, that should at least clarify the timelines a bit. My guess is that settlements could arrive by 2022 - 24. That'll give these truck co's time to get over COVID and build themselves up to compensate for being naughty. Unless Scania actually have some success that might slow things up a bit more. This is big money for Mano, they ought to be more excited about it in communicating to their shareholders. If Mano can find more of these claims in the insolvency cases, then the total final settlement could exceed their current market cap. Not bad, for a side show.

[sirrux] 30/11/2020 10:21

Anyone know the number of trucks in the Mano claims? With claims at up to £20k per truck, I am just curious as to how many they've got. If we take their £7.1m figure and assume that they are valuing their claim at 10% (roughly in line with outcomes from US corporate class action settlements, we don't have much of a history in the UK) of the total claim amount, then taking £15k (rough guess) as an average claim per truck, I make that about 4,700 trucks - anyone know if that's about right?

[sirrux] 29/11/2020 17:07

For the cartel claims, here's what Scania say in their March 2020 interim report (I am assuming others are similar):"Scania is also the subject of related civil claims by direct or indirect customers of Scania, and may face additional similar claims. However, at this stage it is not possible to give any meaningful indication as to Scania's risk associated with private damages. Scania's appeal against the EU Commission decision before the General Court is still pending and there is also great uncertainty around the extent to which claims will be made against Scania. In addition, risk assessment around claims that have already been made is associated with significant uncertainties, and investigations are in their initial stages only."That's all well and good, they would say that but when they present that management view to the accountants, they will be signing off on very different liability numbers to the fair value of claims asset numbers. The accounting for me doesn't really matter but this is stupid, do the partners at the relevant accounting firms not feel a little bit silly? They can't both be right. Most likely both are wrong and the answer is likely to be a non-zero number of some magnitude, unless the EU Commission reverse their decision despite the evidence.

[sallad3] 28/11/2020 11:37

xpert

Interesting development

Two further actions to claim damages based on trucks cartel transferred from High Court to CAT
by Practical Law Competition
On 10 November 2020, the CAT published orders of the High Court by which it transferred to the CAT damages actions brought by The BOC Group Limited (and others) and GIST Limited (and others) against various truck manufacturers, based on the European Commission trucks cartel decision.

Tie that in to the UKTC Ltd claim that is on behalf of every single person and entity that bought a truck and its a little hard to see why any IP thought it beneficial to sell the claims when all they had to do was sit on their hands and wait - except of course to get money in to pay their own fees!

[sallad3] 27/11/2020 10:36

xpertgreeny

No revaluation gain/loss at half time, only at year end. Agreed.

Companies House records show the City Link company being restored and immediately wound-up on 20 November 2019. The liquidators must file their progress report by 20 January 2021.

[xpertgreeny] 26/11/2020 17:01

Hi Sallad,

The company has stated on several occasions that its Cartel valuation is derived on the two biggest Cartel Cases (City Link and Comet). They paid around £100k for each and own 90% of both. So they are aligned with any IP on a smaller £5k and 50/50 split case.

You are mistaken on the uplifts – “no uplift” was clearly stated in the last report.

[sallad3] 26/11/2020 16:03

maddox

The cases are no different. The Cartel cases have all been bought outright.

In the small cases I have so far identified, the IP gets an upfront £5k and a 50% share of the eventual net of costs returns. That is in the public filings and as I say are stated to have little or no value

The public filings in the two big cases (one ex Moulton) show that Mano intially bought 100% for 6 figure sums as the IP's thought the cases were worth no more.

Mano then decided that it was judicially advantageous to give 10% of the Net back to those companies even though they had been dissolved and for no consideration. Again the IPs ascribe little or no value to their 10%.

All these case were acquired before the IPO and were "upvalued" by many millions, and have been increased in value ever since. Corporation tax is being paid (yes paid not accrued) on those increases.

[maddox] 26/11/2020 14:36

Hi sallad,

MANO typically buys the cases outright so they would not retain any interest in the case. I'm not familiar whether these Cartel Case arrangements are different in this regard?

Regards Maddox

[sallad3] 26/11/2020 14:19

Maddox

The problem is that the IP on some of the smaller cases values the Cartel cases he has assigned to Mano at almost Nil return to his estates in the public reports he has filed at Companies House. That is difficult to reconcile.

[bogman1] 25/11/2020 23:52

Thanks Maddox good company at what looks a very fair price. Once the market catches on we should be in for quite the ride. Same over at burford. In here for 2-5 years. See where it gets me.

[maddox] 25/11/2020 20:22

Hi bogman,

Yes, not only is 'fair value' accounting treatment legal it is mandatory - they don't have a choice. International Financial Reporting Standard (IFRS)9 for 'financial instruments' requires that a 'fair value' be placed on a financial investment such as an investment in a legal case.

Unfortunately, a rule that is intended to ensure that accounts better represent the 'true' financial position of a firm is deliberately misconstrued as a devious means of financial misrepresentation.

Clearly, when this false narrative is uttered by the likes of Shorters like Carson Block then the intent is clear. When this theme is reiterated by The Financial Times, Investors Chronicle, and other you have to wonder at their motivation. A look at the current versus past financial period's data will reveal that the estimated values have invariable been close to the mark: That there has not in fact been any dressing-up or misrepresentation. Yet they chose not to make this clear, or withdraw the accusation. Sound financial analysis is being increasingly displaced by shoddy journalism.

[bogman1] 24/11/2020 23:04

Lots of moaning about the accounting. Same for bur. but this is all within the rules. It may be speculative from the outside but at the end of the day it all comes out in the wash with write downs on losses and in some cases write ups. These are widely used and perfectly legal tactics. I could never see what Carson blocks issue was. I can guarantee it's widespread on the nyse

[sirrux] 24/11/2020 17:15

Yep, they either pay out or they don't. It's hugely political though, what UK judge is going to open up that chest of treasures? If it's done, easy collect.

[maddox] 24/11/2020 15:56

Hi sirrux,

MANO are playing a waiting game on the cartel cases - they are letting others do the heavy lifting before pursuing their own claims. Sensible tactics.

[sirrux] 24/11/2020 14:01

Nope, sitting tight.

Meanwhile, this was published by the EU Commission on 30.06.20. "Provisional" they say, years after the ruling perhaps they got side-tracked with dealing with the UK.



Looks like it's got nothing to do with the courts, it's all political and in the middle of a pandemic you can't really expect us to support multi-billion euro pay outs by the truck industry, can you? Guess not.

But Mano just wants to get its accounting right!

[sirrux] 24/11/2020 12:10

Looks like someone's selling, trying not to knock the price too much, lol. Ah go on, put some welly into it!

[sirrux] 24/11/2020 10:41

An update on the cartel cases would be very useful.

1. Has anyone managed to agree any compensation models with the cartel for the larger cases? A result here would make the pathway easier for Mano, otherwise they could incur considerable cost in negotiating a model for their own cases. Has Mano confirmed their calculations based on let's say a 20/25% overcharge? They are unlikely to win the full amount of their claim but it would allow investors to apply their own discount.
2. What's their timetable? Are they waiting on some things before their next move - it would be really helpful to know this and a bit of publicity about such issues could help even if they are negative.

Apologies if I have missed all this somewhere.

The bottom line is that a result on the cartel cases (while not their main business) would give a considerable kick to cashflow that I suspect is not factored in right now.

[sirrux] 23/11/2020 20:26

90% per Annual Report.Pass on defence is where the cartel say they don't pay out to the extent you were able to pass on the cartel's overcharge to your customers. Sounds real messy if you ask me, you could be arguing over that one for a long time.I see the general decline in Mano's share price coincides with a June 2020 EU court appeal hearing relating to the truck cartel. That may have had some sort of indirect bearing on Mano's cases. Sounds like the year end accounting discussions on the £7.1m valuation will be interesting, Mano were hopeful of an even bigger payout (that was perhaps being reflected in the pre COVID share price) but based on the dearth of news it all looks a bit iffy to me and it's now nearly 5 years after the EU ruling in 2016. Worth a few more questions I think.

[cockerhoop] 23/11/2020 19:59

Maddox,

Yes, had seen they hadn't changed the Fair Value Movements, the presentation suggested they'd review value again at YE. Trying to understand the terminology.

Sirrux,

No idea of Mano's cut.

[cockerhoop] 23/11/2020 17:15

Asked this a while back with no reply, just re-posting in case anyone know the answer?

Quick question relating to the cartel cases, in the recent interim presentation the company said the following:

Overcharge generally lower but pass-on defence also significantly lower than we were originally advised. Net effect will be fact specific to our claimant companies.

Does anyone know what it means regards Cartel case valuation?