Dear Sir/Madam,
I have substantially updated my site: www.moneymagik.com
Despite the name of the site, it is NOT MY site, it is a site owned by a friend of mine when I decided that I wanted to do something constructive to protect my substantial investments in the now frozen FMF ("the Scheme") managed by City Pacific Limited ("the Manager"). My friend bought the site because he believed it might have some value in the future, i use it with his permission - before it was used to sell car parts - I have no interest in his business. My interests are from believing in getting money from magik.
I have no shares in CPL or its related companies and am not aligned with any other group. My work is open for all to used and may be copied without permission. I seek no commissions, rewards, or barter for my efforts - I work for my own benefit, and therefore, hopefully, for all unit holders ("Members") benefit.
You may, or may not be aware that there has been generally three different schools of thought, they are (1) Replace the Manager; (2) Voluntary Administration, and (3) Amending the Constitution - I support options (1) and (3). I do not support option (2) because the Scheme cannot go into `voluntary administration' ("VA") pursuant to law - VA was set up to encourage companies struggling with debt to enter into VA so as to might have the `breathing space' to get its affairs in orders and position itself for a better chance at survival. Even if such an entity would be appointed then it would merely become a de facto Manager but without the experience that the existing Manager has. Further, the Scheme will go on for years, beca use common sense tells us that land and the housing industry might not recover to levels acceptable to us for some time to come, its not a fast 'wrap up' deal.
In as much as I have no love for the existing Manager, I would prefer this Manager to an inexperienced accountant.
Option (1) has been canvassed, by as best I know it, two groups (1) the Sydney group, and (2) the Steering Group'. The `Steering Group' is a break-away group from the Unit Holders Action Group ("UHAG" as they called themselves), and have supported a takeover of the management of the Scheme by a Brisbane based group, Trilogy. Trilogy has links through common directors to MDRN (a firm of solicitors with whom the 'Steering Group' lodged a trust account into which they expected Members to contribute money). MDRN has had bad fortunes because it has breached the Trade Practices Act and was fined as a result. There is nothing in Trilogy's short l ife that points to anything done wrong, in fact, a lot has been done right within its Scheme, but, our Scheme is very different, and Trilogy by comparison is miniscule. Our Scheme's loans are not insured and we have substantial debts which has allowed the Manager to loan out the maximum. While Trilogy has done nothing wrong, I believe that management of our Scheme is our of their league - others may think differently on this matter.
The Sydney Group has reported nothing and they've been at it for months. With respect to the other prospective Managers, it might be said that it would be difficult to get a manager to step into our Manager's shoes.
I therefore believe that options (1) and (2) are dead to us. We might live in hope of option (1), but living in hope will not save our money.
I've been pushing for amendments to the Constitution for some time now and recognise that the Manager has constructed (and ame nded) the Constitution with itself in mind - the document, while it complies with the Corporations Act and while it didn't matter in the good times, is oppressive in these sad economic times of today.
Though my own efforts (although I wish it were otherwise), I have constructed a set of 7 proposals to overcome a great deal of the oppressive nature of the Constitution. The proposals will:-
(1) Make the Manager more accountable by creating the position of 'Member's Representative' to protect Member's Interests.
(2) Limit ALL of the Manger's fees to just one fee - up to 1.5% of the Gross Asset Value of the Scheme.
(3) Bypass the oppressive function of the Manager's Amendments to 11A.2(b), 11.1, 11A.3, 11B.3 which has frozen redemptions.
(4) Allow for staggered redemptions over time, funds permitting.
(5) Permit profits (if any, from time to time) to flow back to Members.
(6) Ensure that when Distributions are available, that they be paid to Members, not to capital.
(7) Ensure no more mortgages or charges over the assets of the Scheme
(8) Allow no further lending from the Scheme (other than established commitments)
Now, I am not a professional and these amendments are far from being finished. In particular the amendments to install a Member's Representative into the Scheme. All the references and text have to be checked, as well as checking all of the Manager's amendments for context. I believe that all Members should print out and learn the Constitution - because it is the founding document of the Scheme - its our 'law', its what we will win or lose by.
I would appreciate help or even appreciate that some one suitably skilled take it over and correct it. I believe it truly is our own chance.
75% of the vote is required to pass these proposals and 100 members signatures are required to make a request for a meeting valid.
I encourage all of you to put your names on a list I'm preparing (if you have already done so, then thanks, it is not necessary to do that again).
You are not obligated to support the final proposal, and in the end you are able to vote for or against anything at the meeting. There is no obligation.
The draft proposals might seem lengthy, but please try to keep in mind that each one is in three sections - (1) Background, (2) The draft proposal, and (3) the detail of the actual constitution clauses to be amended. Member's might read the Background, and consider the draft proposal, they do not have to understand the actual clauses, but it would be nice if Members are able to check those clauses for accuracy and completeness.
This will be the last mail I will send out on this subject, except if you wish to contact me to permit further contact. Without support from a substantial group of Members, any opportunity will be lost.
If you are offended by this mail, then there is no basis for such offence to be taken - the work is done for all of us, you can take it or leave it.
We all have money invested and at risk - we should open our eyes to every alternative.
Thank you,
Allan Garnham
Queensland.
