Interesting article MFD.There must have been a lot of research involved.Is not the same type of thing that went oon at enron and tyco etc?Aren't those people in jail and before the courts?If I had made some of those deals with my friends,i would be worried about one of them turning over to save his own skin.money can do strange thing to people and so can the threat of prison time.
CCWIPP Part 02: The Best Laid Plans
Full Disclosure Part 02: The Best Laid Plans
Today we feature Part 2 of Full Disclosure, our series about CCWIPP, UFCW Canada's troubled pension plan. In this segment we take look at the small circle of men who have made the plan what it is today: CCWIPP's trustees, its investment committee and the tangled web of businessmen who, over the past decade, have used millions of dollars from CCWIPP to finance their mostly unimpressive business ventures. We take a look at the factors that have driven their investment decisions and ask - again - for whose benefit?
Some very interesting developments occurred over the past several weeks and some astonishing information came our way thanks, in large part, to the Internet: A confidential report from the President of a company controlled by CCWIPP to the Government of the Bahamas. The report reveals the sorry state of one of the pension fund's largest investments - about $155 million US (and counting) - in two beleaguered hotels in the Bahamas. Even more troubling than the improbability of any return on this enormous investment, is what CCWIPP's trustees are planning to do about it.
Full Disclosure Part 02: The Best Laid Plans
The full text of the confidential report of Warren Adamson, President, PRK Holdings Ltd., to the Government of the Bahamas.
There are things afoot not known or available to the general public. As for people servin' one another up. You'd be surprised at who's pointing fingers and preparing evidence that will serve up some fine trough puppies.
I understand that a couple of ex-employer reps and a current one whose bosses have angered some union guys are prime meat for the platter.
You've got to realize that a lot of this stuff is news to some of the turkeys.
Will the courts or authorities really believe that these supposed bright lights had any idea about how to prudently run a pension investment?
Prior to '97 the employer maxed out the ufcw/ofg CA required contribution on a sliding scale which topp'd out at $29.20 a wk for every employee, or ($0.83 per hr worked) into the Retail Clerk pension Plan (Existing Plan is how it is term'd in the '97 CA).
The '97 agreement ended the RCPP (ceased to accrue benefits, notwithstanding, any unforeseen good fortune the company may bestow upon the participants) and employees would now contribute from their own earnings, starting at age 30 with 1%, 40-2% and 50-4% into the ufcw plan. The employer would also contribute 2001/4%, 02/5%, an 03/6% in each CA year. That sounds really healthy until:
Even with that formula, the employers' contribution kicks out at $35.20 per week for eligible employees who work a full week. It is also good to note that only employees over the age of 30 are in the plan. It would be very difficult to accrue enough pension service starting at age 30 to provide a decent income for retirement on a part-time basis. (goes without saying eh).
The other special note would be that there aren't many employees eligible for employer contribution. The buyouts, and high turn-over takes care of that.
Reducing pension contribution and dumping the investment management responsibilty of a growing fund would look good to an employer. And after reading this article (great job RV) large amounts of money minus adequate regulation would look good to any union, a concession carrot of sorts.
I'm sure any company would be glad to divest itself of the bothersome employee plan and cut contribution requirement to boot. And I'm equally sure they knew how eager union pension bums are to get their mitts on that much capital.
There is a para in the '97 agreement which basically says, if the company wishes at anytime to excuse itself from the liabilities (and assets) of the existing retail clerk pension plan, the union would be glad to carry the money and something could be worked out for sure.
quote:
v) If, at a subsequent date, the Employer desires to transfer the liabilities (and appropriate assets) in respect of participating Employees under the Existing Plan to the trustees of the plan, the Union will assist the Employer in working out with the Trustees an appropraite basis for doing so.
Now I understand b.c retail members are contributing into the ufcw pension plan and not the ccwipp plan (for now), but if it's possible to swing pension plans from one to another then it looks from here that maybe, along with the obvious concessions of '97, the western retail pension monies floodgate swung wide open to the east too...
I must say that it gave me a great deal of pleasure to post this weekend's "item". To all you CCWIPP trustees and related hangers-on: That pain you're feeling is the new era of tranparency jumping out - seemingly from out of nowhere - and biting you on the asses. Get ready for more. This is only the beginning. So you don't think that you are required to tell working people what you're doing with their money are you? Well, think what you like - we'll damned well tell them what you're doing! Welcome to the guerilla journalism of the 21st century.
And for the officials of the Financial Services of Ontario who will surely be visiting over the next few days: Do we have to shame you into making good on your mandate? If we do, we will.
Close to four years ago, the fine folks in Alberta led what seemed to be a pretty friendly 'on-site' examination of CCWIPP's affairs. Even though alarm bells were going off, they seemed to have thought that they were hearing a bizarre rendition of 'jingle bells'. The Financial Services Commission of Ontario was a key player in that 'examination'. They found, in part, the following:
quote:
There is however, a problem with funding on the solvency side and in au effort to resolve this issue the plan has been amended in a manner that does not comply with legislative standards.
There are three areas of concern with respect to the recently filed amendment.
1. The retro-active reduction of ancillary benefits does not comply with the Quebec Pension Benefits Act. As a result, this provision cannot be applied to Quebec members.
2. The treatment of benefits related to initial unfunded liabilities in situations where the employee leaves before the liability is fully paid is not acceptable under Quebec legislation. As a result, this provision cannot be applied to Quebec members.
3. The change to the plan which eliminates all early retirement subsidies if the plan terminates is not acceptable under any pension legislation in Canada.
Recommendations
1. The amendment in question should be rescinded and an amendment which presents an alternative way to reduce costs, at least for Quebec members, should be made.
2. An alternative method for dealing with unpaid initial unfunded liabilities must be found for Quebec members and the appropriate plan amendment made. This may also require the reinstatement of certain previously reduced benefits.
3. The amendment m question must be rescinded. Further discussion with regulatory authorities will be needed to find a solution to the issue this amendment attempted to address.
Funding
Findings:
The 1997 actuarial valuation submitted f a review does not meet the requirements of pension legislation largely because it is based on a plan text which, for previously noted reasons, cannot be registered. Aside from this there were some additional issues raised which need to be addressed. These included:
1. The basis used for determining the mount of liability related to initial past service and previous service unfunded liabilities should be disclosed.
2. The going concern liability for active members is higher than the solvency liability by approximately 3%, whereas the difference in respect of deferred vested members is approximately 30%. Explanation as to the much higher difference for deferreds should be provided.
3. Support for assumptions related to retirement rates and interest rates should be included given past experience and current economic trends. This should include information on the annual fund returns for the past 10 years and distribution of active members by age and service.
4. The present value of allowable special payments as shown in the solvency balance sheet in Section 4 of the Valuation was calculated by taking account of more than
5 years of special payments. This is not permitted by the Alberta Act and should be revised.
5. The term 'private Placements' used to describe that part of the fund invested directly by the trustees is misleading. A different term should be used.
6. Expenses should be properly recognized in the going concern valuation
7. Assumptions related to 'grow in' rights for Ontario and Nova Scotia members are missing.
Investments in Real Estate should reflect the following:
1. The rate of return for each type of investment should be calculated individually using net income as well as market value adjustments before the rate of return is calculated on the total investment portfolio. This type of disclosure will give the Board information on all aspects of the portfolio.
2. Policies should be established for investment in real estate. The policies should state the types of real estate investments, the maximum investments in each type, limits on single properties, geographic concentration, and rate of return expected. The policy should also address the approval procedures, valuation cycle and due diligence to be conducted.
Policies for investments in mortgages should be established immediately. The policies should clearly specify the types of properties on which monies will be lent, maximum loan to value, maximum size of loan, debt service ratios and exposure to single or related borrowers. The policy should also establish approval and reporting procedures as well as guidelines for dealing with defaults. Loans in default and actions taken to recover these investments should be reported to the Investment Committee monthly and the Board should be updated at each meeting.
I can't see where these recommendations have been followed. If they were, then I'd say some of the trustees might be wondering how they can 'splain the crap that's happened in relation to real estate ventures since 1999.
Hey, I wonder if any of them got a chance to visit the nice Hyatt resort on the Cayman Islands? That Ron Kelly real estate investment seems to be buried in the books.
Just about the time the heat seemed to be turned up in Alberta, the CCWIPP bailed to Ontario because all of a sudden, one bright light realized that the 'plurality' of members resided in Ontario. Now, even though the Financial Services Commission of Ontario has gone through much of this crap before, when confronted with the mess, they immediately announce that they will conduct a full audit and include other provincial jurisdictions and the Canada Customs and Revenue Agency. However, just a swiftly, that decision was reversed, seemingly by higher-ups in the FSCO.
The higher-ups decided that another examination was in order. Part way into that 'examination,' the pensions Director, Tom Golfetto demanded production and delivery of documents and proof of prudent practices. That was last February, and when the CCWIPP whined about how hard it would be to comply with the Director's demand for production, the higher-ups seemingly overruled his demand and agreed to on-site look-sees of the docs.
The FSCO has some fessing up to do and some big splainin' to do.
It's very troubling that significant problems were identified with the pension fund several years ago and nothing appears to have been done about it. It's troubling also that the FSCO has been examining or investigating or reviewing or whatever-ing ccwipp for the better part of a year now and millions continue to pour into awful investments like the Bahamas hotels. What the hell is up with that? Why is it taking these guys this long? Don't they realize what a detrimental effect the passage of time can have on an investigation?
What kind of responsibility do the regulators have for ensuring that, while an examination or investigation is ongoing, more rotten deals are not made, more money is not pissed away, documents are not destroyed, key players don't fly the coop or die? I'm not getting a warm feeling about the FSCO.
I certainly hope that the staff at the FSCO are not thinking that it's the CCWIPP officials who are their clients when it's really the thousands of members of the CCWIPP plan who are the people that the FSCO is supposed to be protecting.
I understand from a colleague of mine that when the FSCO was first contacted about the Bahamas investments (months ago!), an FSCO official just basically shrugged these investments off saying something like "we just don't have the resources" to pursue these things.
What a lot of bullshit! What is the FSCO's operating budget? What's their salary budget? How many specialists, analysts, examiners, lawyers, adjudicators and whatever else do they have on staff? Don't have the resources huh? Well if you guys don't have the resources then maybe you should get the resources (or use what you've got more effectively) or tell the public that it's open season for pension fund scamming because there's nothing the regulator can do if anyone gets it into their heads that they might want to fleece a pension fund.
Here's our operating budget: $0.00
Here's our salary budget: $0.00
Here's the number of highly paid experts we have on staff: 0
Yet, we got the goods on the Bahamas investments!
I am certainly hoping that with a new supposedly more citizen-oriented provincial government in office now in Ontario, the interests of the citizens will come first.
I understand that Premier McGuinty's office has been advised and so has the Minister of Finance. Apparently the Canada Customs and Revenue Agency now knows and apparently so will these gatherers of financial transaction information.
That may be why the rumours that a couple of expendable patsys may get fingered as the persons responsible.
How odd, first AFM Hospitality transfers the Ramada franchise back to Cendant. Then it looks like the Howard Johnson franchise might be taken back by Cendant. Then the AFM website goes dead. Let's hope everything's okay 'cause CCWIPP has always carried a load of dough for these people--all the way back to the beginning when Ron Kelly ran the show.
I have to say that the more that I read about what's going on, the more stunned I am by all these machinations and the web of characters involved. Is CCWIPP supporting this whole circle of businesses that make money by transacting business with each other? Is that a prudent investment? The whole thing is mind boggling.
What's even weirder is that (yes AFM is live again) AFM buys Trigild, and and then CCWIPP dissapears as a major owner of AFM, but Trigild becomes a major owner.
Was Trigild bought with AFM shares? Were the shares that were traded for Trigild, CCWIPP shares? Does CCWIPP own a good chunk of Trigild and through Trigild still own a huge chunk of AFM?
Stay tuned.
The newspapers report that CCWIPP is short about $200 million to cover pensions if the plan was wound up today. Now, if the whole Bahamas/Carribean/Pinestone fiasco falls flat where would that leave CCWIPP even if its employers stay in the plan?
It's pretty obvious that the many of the self-investment valuations are phoney baloney. What if CCWIPP is only worth a fraction of what has been reported?
Where does the Ontario government stand in this mess?
How darned nice. The UFCW got a deal with Fortis Properties.
quote:
Delta St. John's agreement
UFCW Canada Local 1252 members who work at Newfoundland and Labrador's finest hotel, the Delta St. John's, have won a new contract that includes a 10.5% wage increase over the life of the agreement.
Other highlights for the 165-member bargaining unit include improved contributions to CCWIPP with a past-service pension buy-back, sick-day improvements, two days of paid family leave, a new group insurance plan including STD and LTD, full dental, medical, and vision coverage, improved vacations, and improvements to meal and boot allowances. The agreement is fully retroactive to last
More: Mark Dobson, UFCW Canada
Fortis bought the hotel from none other than our friend Ron Kelly.
quote:
Top national developer buys Delta hotel:
Pat Doyle. Telegram. St. John's, Nfld.: Feb 15, 2000.
A Newfoundland-born real estate developer in Toronto is about to take ownership of the Delta St. John's Hotel and Convention Centre.
LOOKING FORWARD
Chimo Hotels of Canada, a subsidiary of RHK Capital Inc., whose president and chief executive officer is Ronald Kelly, a St. John's native, is in the process of purchasing the New Gower Street hotel from Manucab Ltd.
"We are looking forward to closing the deal on Feb. 21," Hans Gerhardt, president of Chimo Hotels, told The Telegram Monday.
Manucab is a wholly owned subsidiary of Manulife Financial, which has owned the hotel since it was opened as a Radisson Plaza Hotel in 1987. In 1994, management of the hotel was taken over by Delta Hotels.
ONE OWNER -- TWO HOTELS
In 1998, Delta Hotels and Resorts, the management and brand name company that manages the Delta, was purchased by Canadian Pacific Hotels, which also operates Hotel Newfoundland. Hotel Newfoundland is owned by Mutual Life.
Kelly, who now is one of the country's top real estate developers, had previously planned to build a $10-million hotel in Deer Lake, but those plans have been on hold for the past year.
The plan now is on hold indefinitely, Gerhardt said.
Manulife is trying to get out of its non-core assets and Chimo, which has six hotels, saw the purchase of the Delta St. John's as a great opportunity, he said.
OPPORTUNITY
"We are very excited about Newfoundland as there has been some wonderful news coming from the province lately," Gerhardt said. "We are very enthused about the level of tourism and business activity.
"In my opinion, Newfoundland now has a much stronger story to tell than ever before."
He also said the company feels the Delta is "well positioned," particularly in view of the construction of the nearby civic and convention centre.
"We are very happy and very proud to be the new owner of the Delta, which we feel has done a good job and is well-recognized in St. John's, on the East Coast and across Canada."
Chimo operates two resort hotels in the Bahamas and two in Jamaica, as well as owning a hotel in Toronto and a piece of a Howard Johnson hotel in Toronto.
At its regular weekly public meeting Monday, city council approved a request from Manucab for assignment of its rights and obligations in certain agreements with the city, Cabot Place Ltd. and the Crown.
The request referred to skywalk and tunnel agreements pertaining to the existing skywalk over Barter's Hill that links the hotel to Cabot Place Phase 1, and the underground tunnel that links the hotel to the parking garage under the Cabot Place buildings.
The request was put before council in a memorandum from Ron Penney, city commissioner and city solicitor, who said Manucab would like, as part of the sale of the hotel, to assign its rights and obligations in these two agreements to Chimo Hotels Newfoundland Inc., a new company formed by Chimo Hotels Canada.
Also, Chimo was seeking consent from the city to assign the agreements to their tenders.
Penney recommended council approve the requests, which it did.
Ron sold the hotel to Fortis about two years after he bought it, and about the time when CCWIPP was having to take over a huge amount of RHK debt. It's also about the month that CCWIPP did a financing deal on the London Galleria Mall, and about the same month that CCWIPP formed PRK Holdings to deal with the huge bungle in the Bahamas.
Isn't it sweet that Ron could extract himself from the Delta deal, but by the looks of it CCWIPP held the mortgage and possibly still does.
So here we have another hotel that Ron Kelly buys, CCWIPP finances, the UFCW gets new members. The only twist is that it seems to be another venture where the UFCW bargains with an employer that's beholden to it. Yet the contracts are still relatively crappy. (You'll notice that the UFCW conveniently forgets to mention how long the contract is for.)
quote:
In December 2002, Fortis Properties acquired the 276-room Delta St. John's located in downtown St. John's, Newfoundland and Labrador. The property is the premier hotel and convention facility in St. John's and becomes the Company's eighth hotel increasing its aggregate hotel rooms to more than 1,500 .
In December 2002, Fortis Properties assumed an $11.9 million, 9.47 per cent First Mortgage for an 8-year term which is secured by a First Mortgage charge on the Delta St. John's .
Fortis is a public company, and they publish some interesting information.
I wonder how the UFCW rag stacks up?
quote:
Human Resources
Fortis Properties had 870 employees at 31 December 2002. Employees at the Days Inn Sydney are members of a bargaining unit represented by the Hotel Employees' and Restaurant Employees' Union. A new three-year collective agreement was signed on 7 March 2002. A new three year collective agreement between Fortis Properties and the Canadian Auto Workers ('CAW') covering employees at the Delta Sydney was signed on 6 February 2003. The collective agreement between Fortis Properties and the United Food and Commercial Workers ('UFCW') covering employees at the Delta St. John's expired on 31 December 2002 with negotiations scheduled to commence early in 2003.
Looks like Ron Boy sold the gig just as the UFCW rag expired.
quote:
Where does the Ontario government stand in this mess?
If the FSCO investigation reveals wrong doing will it obligate the Ont. gov to answer this question. I've noticed in the US crimes are prosecuted, what about Canada, is there a law and a consequence for pension fraud?
The sad reality is that in Canada, law enforcement agencies turn a blind eye to union corruption or to any kind of scamming that involves union leaders. The people at the regulatory agencies, IMHO, perceive the pension trustees, the administrators, the lawyers, the actuaries and other well-heeled guys in suits as their "clients" when in fact it is the public that are their clients and whose interests they should be protecting.
It's very pathetic when you find out what goes on in Canadian government offices. The citizens are regarded as nuisances while every effort is made to protect the interests of the guys in suits.
We'll see where the FSCO's priorities are.
The FSCO would like this controversy to go away. However, it's so sticky that they can't shake it. They've gone from conducting the endless "review" to supposedly asking other jurisdictions to to participate in an "examination".
On other fronts, rumour has it that the RCMP recently went in to the HRDC (that's a place where machine heads get Education and Training funds) and hauled some sorry bureaucrats' asses out in shackles. The HRDC is the same group of chumps who saw one of their own hauled off for gettin' his house renovated by machine heads a few years back.
Rumour has it that more than one furrowed machine brow has sat sweatin' in Cottage Country Ontario of late. Rumour also has it as well that some things in machine land are too hot for a couple of people to handle, so they are cooperating with an agency separate from FSCO. Keep the wires live, and keep those tapes a rollin'. Apparently they were tipped off that they were being set up to take the blame and do the time.
I think things will be different from now on. Paul Martin and Dalton McGuinty aren't going to take a shit kicking over some machine heads and their stupid antics.
There's a messy brew in the pot and newly-minted leaders can't afford to have any of it on their shoes when it boils over.
Gee, these guys never fade away, now do they?
Bernie Christophe is still a busy guy. He's on the Board of Case Financial, a company that was reported on earlier in this thread and others. .
quote:
Mr. Christophe is a graduate, with great distinction, of the Labour College of Canada.
quote:
posted by weiser:
D'ya mean somephin like this:Sorry about the formatting. Cliff is not a signator for Case, but is for Propco.quote:
Case Financial Inc.,
15060 Ventura Boulevard,
Suite 240,
Sherman Oaks, California,
91403
Attn: Eric Alden
CEO
Dear Eric,
Re: Finders Fee Agreement
Mike Schaffer and John Irvine ("the finders") have introduced Case Financial Inc. ("the company") to various entities and individuals over the course of the last 9 months in an effort to secure funding for the companies ongoing business. These entities are CCWIPP, Dundee Bancorp and associated & designated companies, Clifford Evans, Ned Goodman, Standard Securities Inc., Peter Martini, Ralph Tersigni, BoilerMakers Union, Retrocomm Funds et al. In the event that there are any other entitities that the Finder(s) wish to introduce the Company the entity must first be approved by the Company in writing.
The finders and the company have agreed to the following fees payable to the finders for their efforts and success in arranging the required capital for the company. The terms are as follows:
1. All compensation is to be split and paid separately 1/3 to Schaffer and 2/3 to Irvine
2. Cash: 10% of proceeds received at closing(s) for each particular closing, payable in 3 equal annual installments commencing January 6, 2003 for the initial closing assuming it closes and in 3 equal annual installments for each subsequent closing, but in no case, commencing later than 30 days after each particular closing.
3. Warrants: Warrants to purchase 100,000 Common Shares for each $1.0 Million in proceeds, four year term, exercise price of $0.50, and upon such other terms and conditions as the warrants to be issued in the Financing.
4. Costs: company shall reimburse finders $25,000 in costs, less expenses previously advanced.
5. Compensation is due and payable only in the event any of the aforesaid investors consumate a financing with the Company within twelve months from the date of this Agreement....
...Gentlemen:
Reference is made to that certainConfidential Term Sheet dated November 27, 2002 (the "Confidential Term Sheet"), a copy of which has been provided to and read by the undersigned, I.F. Propco (Ontario) 32 Ltd., an Ontario corporation (the "Subscriber"). Unless otherwise indicated or the context otherwise requires, all capitalized terms used in this Subscription Agreement (the "Subscription Agreement") and not otherwise defined will have the meaning provided in the Confidential Term Sheet will have the same meaning when used herein. By execution hereof, the Subscriber evidences its desire to purchase one (1) Unit from Case Financial, Inc. (the "Company"), as more particularly described below (the "Unit"). By its execution hereof, the Subscriber expressly acknowledges and agrees that the Company is relying upon the accuracy and completeness of the representations of Subscriber contained herein in complying with the Company's obligations under applicable securities laws.
1. SUBSCRIPTION COMMITMENT. The Subscriber hereby subscribes for the purchase of one (1) Unit and, as full payment therefor, agrees to pay to the Company, concurrently with the Subscriber's execution and delivery hereof, the Unit purchase price of Two Million and 00/100 Dollars ($2,000,000.00). The Unit consists of a Promissory Note, dated as of the date hereof, and delivered by the Company to the Subscriber, in the principal amount of Two Million and 00/100 Dollars ($2,000,000.00) (the "Note"), a Warrant to purchase Two Million (2,000,000) shares of the Company's Common Stock, $0.001 par value (the "Common Stock"), at an exercise price of $0.50 per share of Common Stock, and a Warrant to purchase 1,000,000 shares of Common Stock at an exercise price of $0.80 per share of Common Stock (together, the "Warrants"). The shares of Common Stock issuable upon exercise of the Warrants shall be referred to herein as the "Warrant Stock", and the Unit, the Note, the Warrants, and the Warrant Stock, shall be referred to herein collectively as the "Securities". The form of Note and Warrants are attached hereto as Exhibit A....
........IN WITNESS WHEREOF, the undersigned do hereby execute this Subscription
Agreement this ____ day of December, 2002.
I.F. PROPCO (ONTARIO) 32 LTD., and CASE FINANCIAL, INC., a Delaware
Ontario corporation corporation
By: /s/ Clifford R. Evans By:
----------------------------- --------------------------------
Name: Clifford R. Evans Name:
Its: President Its:
This deals with Case Financial and the money was loaned to Case and the guys who got the "finders" fee are well know to those familiar with Asia Web/Acubid/Infinity Telesystems/WebGalaxy and so on.
Way to go Bernie:
quote:
EMPLOYEES
The company currently has 11 full time employees and 1 part-time employee. None of the employees are covered by a collective bargaining agreement.
RECENT DEVELOPMENTS
On December 12, 2002, the Company closed a $2 million investment with I.F. Propco Holdings, Ltd., an Ontario corporation ("IFPH"). In exchange for $2 million, the Company issued a 4 year promissory note to IFPH bearing interest at the rate of 12% per annum and warrants to purchase: (i) 2 million shares of common stock at an exercise price of $0.50, and (ii) 1 million shares of common stock at an exercise price of $0.80 per share. The shares underlying the warrants carry registration rights. The promissory note requires the Company to make monthly interest payments commencing April 2003 with the principal to be paid at maturity. The warrants expire 4 years from date of issuance. The Company has agreed to use its reasonable efforts to prepare and file with the Securities and Exchange Commission a registration statement within 90 days covering all of the shares of common stock underlying the warrants issued to IFPH.
Wow! What a deal, CCWIPP can buy shares at 50 cents apiece. Considering that Case Financial shares closed at 16 cents apiece today, that might not be such a good deal. Hey, but that's never stopped CCWIPP before.
The no interest for a quarter year ain't as good as shoppin' at the Brick, but hey, who wouldn't like to borrow $2 million in US funds and pay no principal or interest for the first three months?
Oh yah, that brings us to another point. Not only did 10% of the loan evaporate in the form of finders fees, but now with the exchange rates closing in, the $2 million in US funds is worth much less in Canadian funds than they were back in December of 2002.
These guys really have no shame. Isn't Bernie the UFCW Chair of the CCWIPP Board of Trustees? What the hell are they doing pouring money into an outfit like this Case Financial? Who the hell made the decision to do that? And at a time like this too - with the regulator investigating them and all! I think that the CCWIPP boys either have every good reason to believe that the regulator will give them the once over lightly and leave them alone or they just don't give a shit what happens. They've got cushy appointments on various boards of directors and their union or corporate jobs so who cares if CCWIPP goes to hell in a handcart.
What blows me away is that the regulators don't seems sufficiently concerned about the apparent conflicts of interest that are just rife between CCWIPP and the companies in which it invests. I'll bet the CCWIPP boys - like Bernie - say that these appointments help them to keep an eye on things and make sure that CCWIPP's millions are being used wisely by these companies. That's a pretty lame reason but I wonder if the friendly folks at the FSCO are buying it? They've been investigating for over a year now haven't they? In the meanwhile, the millions continue to pour into these unusual ventures. How many more millions are going to go out the window while the public servants look on?
This is sweet:
quote:
On December 12, 2002, the Company closed a $2.0 million long-term debt financing with an institutional investor. The terms of the promissory note call for interest at 12% per annum payable monthly beginning April 1, 2003, with principal due at maturity on December 12, 2006. In addition, the note includes warrants to purchase 2,000,000 shares of the common stock of the Company at $0.50 per share and warrants to purchase 1,000,000 shares of the common stock of the Company at $0.80 per share that expire in four years. The Company also agreed to register the common stock underlying the warrants in a registration statement filed under the Securities Act of 1933, as amended.
Now if we subtract the 10% finders fee from the $2 million loaned on December 12, 2002, we have $1,800,000 left. A little over two weeks later on December 31, 2002, Case Financial reports that its Balance Sheet reflects that it has cash in the amount of $1,444,167. That's not good considering that its stock prices began to dive at that time.
If we take two-million shares at 50 cents each, that amounts to $1 million. If we take one-million shares at 80 cents each, that amounts to $800 thousand. Add them together and we get $1,800,000.
We've seen this too often. Y'know, the scenario where CCWIPP loans money to operations that can never seem pay them back in cash, but these operations always seem to trade the principal for shares in the company.
What's with this? Is this prudent investing? Is this really a good deal for pension plan members?
Hey, were those stocks ever registered under the Securities Act of 1933?
I dunno, when I read what the company has to say about its prospects, I get an uneasy feeling.
quote:
THE COMPANY IS A DEVELOPMENT STAGE COMPANY WITH A LIMITED OPERATING HISTORY AND LACK OF PROFITABILITY
The Company was formed in 1998 and, therefore, has a limited operating history. In addition, the Company has incurred operating losses in every quarter since inception. The Company is subject to the risks and uncertainties usually encountered by early-stage companies. These risks include risks that the Company cannot attract, train or integrate into the business organization qualified personnel, risks that fluctuations in operating results will be significant as the Company develops and tests business practices, and risks that the Company will fail to properly manage growth and expansion, if and when it occurs.
THE COMPANY'S INABILITY TO COLLECT UPON JUDGMENT, ON A TIMELY BASIS OR AT ALL, WILL HAVE A NEGATIVE IMPACT ON ITS BUSINESS
The Company may not be able to collect upon the judgment recovery when and if it is paid to the plaintiff, or the Company may not be able to collect without bringing a legal action against the former plaintiff. Either event, the failure to collect or the necessity of legal action to collect can have an adverse impact on the Company's business, prospects and results of operations.
THE COMPANY'S ABILITY TO EXPAND IS LIMITED BY JURISDICTIONAL LIMITATIONS
Not all states allow advances to attorneys and plaintiffs. Some jurisdictions do not allow maintaining, supporting, promoting or assisting another person, with money or otherwise, to prosecute a lawsuit. The practice is referred to as "maintenance." Similarly, the bargain between a stranger and a party to a lawsuit by which the stranger pursues the party's claim in consideration of receiving part of any judgment proceeds may be a form of "maintenance" and may not be permitted in some jurisdictions. The Company's ability to grow and expand the Company's business may be limited to specific jurisdictions. The Company's inability to expand beyond such jurisdictions may negatively impact its business, prospects and results of operations.
COURTS MAY DEEM THE COMPANY'S ADVANCES TO BE LOANS RESULTING IN LIMITATIONS ON HOW THE COMPANY DOES BUSINESS
The Company does not loan money to plaintiffs. The recovery agreement between the Company and the individual or law firm receiving the advance clearly states that the advance is not a loan, and that it is not be repaid if the lawsuit is lost. Accordingly, the Company believes that it is not subject to various laws and regulations that constrain lending activities. However, there can be no assurance that a court in any jurisdiction in which the Company pursues its business would not examine the Company's activities and come to the conclusion that the Company was in fact lending money to plaintiffs. One result of such a conclusion by a court would be that the rate of return on the Company's advances may exceed the rates of return permitted by law. Such a conclusion would make the Company's agreements with plaintiffs voidable, subject the Company to fines or other sanctions or otherwise negatively impact the Company's business, prospects or results of operations.
THE COMPANY HAS LIMITED UNDERWRITING EXPERIENCE AND INFORMATION ON WHICH TO BASE ITS OPERATIONS FACTORS THAT MAY MAKE IT MORE DIFFICULT TO EVALUATE THE COMPANY'S BUSINESS AND RESULTS
The Company has only four years of precedents upon which to base its operations. The Company also has only four years of experience underwriting risks. While the Company believes that the time spent in the past four years refining its underwriting procedures allows it to evaluate the plaintiffs and cases to whom it advances money, there is no extensive history in underwriting upon which the Company or investors may rely. Although the Company makes comparisons to other claims and is compiling a database to assist the Company's underwriting procedures, the Company does not have an extensive database upon which it can make the Company's underwriting decisions. Underwriting decisions made on incomplete or inaccurately assessed information may lead to lower rates of claims recovery and may have an adverse impact on the Company's business and results of the Company's operations.
IN ORDER TO SUCCEED THE COMPANY MUST EDUCATE CUSTOMERS ABOUT ITS SERVICES
The Company only has a four-year history of operations upon which it can rely with regard to both the nature of the service it provides and its ability to provide that service. Through the Company's sales efforts the Company must educate its consumer base with regard to its business. Unlike other financial services, the Company's services are not well known in the general population. Therefore, the Company cannot give any assurances that it will be successful in educating potential consumers about its services and especially educating consumers about its services in a manner that will be attractive to consumers. A failure to so educate consumers may hamper the Company's sales efforts and have an adverse impact on the Company's business, prospects and results of operations.
TORT REFORM IN THE FORM OF LEGISLATED RESTRICTIONS ON PLAINTIFF'S ABILITY TO SUE WOULD NEGATIVELY AFFECT THE COMPANY'S BUSINESS
In addition to the uncertainties inherent in litigation, tort reform may negatively impact the Company's business. The legislatures in any of the jurisdictions where the Company operates may pass legislation that restricts a plaintiff's ability to sue. Such restrictions may be in the form of altering or eliminating claims that may be heard in court or changing statutes of limitation or the periods of time plaintiffs have to make a claim. These or other restrictions on the right to sue may limit the market for the Company's services and negatively impact the Company's business, prospects and results of operations. Legislatures could also limit the amounts that could be recovered for specific claims. Such limitations, if enacted, could negatively impact the Company's business, prospects and results of operations.
THE COMPANY'S NEED FOR INFORMATION ABOUT A CASE MAY HAVE A NEGATIVE IMPACT ON ITS OUTCOME
The Company's need for information about a case may result in an adverse outcome of the case. In general, communications between a client and the client's attorney are privileged. However, the Company requires information to assess the case. While in the course of obtaining the information the Company requires, the Company strives to keep such communications privileged and confidential, a court may determine that such communications with the Company are not privileged. If the privileged information given to the Company may be discovered by the defendant such information may be used against the client. Either situation, the inability to obtain privileged information the Company needs to assess the case, or making privileged information discoverable to the defendants, increases the likelihood of outcomes which would be adverse to the Company's business, prospects and results of operations.
A SIGNIFICANT PORTION OF THE COMPANY'S STOCKHOLDERS' EQUITY IS REPRESENTED BY NOTES RECEIVABLE FROM AN AFFILIATE THAT IS IN TURN LINKED TO THE PRICE OF THE COMPANY'S COMMON STOCK AND THE AFFILIATE'S ABILITY TO COLLECT ON CERTAIN INVESTMENTS
Notes receivable from an affiliate, and the accrued interest on such notes, in the amount of $738,639, are a significant element of the stockholders' equity on the Company's balance sheet as of December 31, 2002. The ability of the affiliate to pay these notes and interest is dependent, in part, on the collection of the principal and contract fee income from the investments in contracts that were retained and the amount realizable on the Company's common stock that was received by the affiliate in the reverse acquisition. Accordingly, any adverse change in either the affiliate's ability to collect on such investments in contracts or the value of the Company's stock will have a negative impact the on the Company's business, prospects and results of operation.
THE COMPANY'S BUSINESS MAY BE COPIED BY COMPETITORS AS THERE ARE FEW IF ANY BARRIERS TO COMPETITION
Other than an expertise in assessing underwriting risks and the Company's database, the Company's business is not dependent upon proprietary information. Accordingly, there are no substantial barriers to potential competitors. The Company may not be able to compete successfully against current or future competitors. In addition, competition may drive down the return on the Company's advances. Given the risks inherent in the Company's business, a reduction in the rate of the Company's return may impact the viability of the Company's business model. There is no assurance that the Company may be able to compete successfully against others who offer similar services or that such competition may not reduce the rate of return the Company receives for its advances.
THE COMPANY'S BUSINESS IS DEPENDENT ON KEY PERSONNEL
The Company's future performance depends on the service of key personnel such as Eric Alden, Chief Executive Officer, Lorne Pollock, Vice President Underwriting, and Gary Primes, Vice President of Operations and Chief Information Officer and the Company's ability to attract, train, and retain additional underwriting, technical, marketing, customer support, and management personnel. The loss of one or more key employees could negatively impact the Company. There can be no assurance that the Company will retain key employees, or attract and retain other needed personnel.
EXERCISE OF OPTIONS AND WARRANTS WILL DILUTE EXISTING STOCKHOLDERS AND COULD DECREASE THE MARKET PRICE OF THE COMPANY'S COMMON STOCK.
As of January 1, 2003, the Company had issued and outstanding 15,561,108 shares of common stock, outstanding options to purchase 2,100,000 additional shares of common stock, and warrants to purchase 5,475,000 additional shares of common stock. The existence of such options and warrants may adversely affect the market price of the Company's common stock and the terms under which the Company obtains additional equity capital.
COMPANY COMMON STOCK IS LISTED ON THE OVER-THE-COUNTER (OTC) BULLETIN BOARD, WHICH MAY MAKE IT MORE DIFFICULT FOR STOCKHOLDERS TO SELL THEIR SHARES AND MAY CAUSE THE MARKET PRICE OF COMPANY COMMON STOCK TO DECREASE.
Because the Company's common stock is listed on the OTC Bulletin Board, the liquidity of the common stock is impaired, not only in the number of shares that are bought and sold, but also through delays in the timing of transactions, and limited coverage by security analysts and the news media, if any, of the Company. As a result, prices for shares of the Company's common stock may be lower than might otherwise prevail if the Company's common stock was traded on NASDAQ or a national securities exchange, like the American Stock Exchange.
THE COMPANY'S STOCK PRICE MAY BE VOLATILE AND AN INVESTMENT IN SUCH COMMON STOCK COULD SUFFER A DECLINE IN VALUE.
The market price of the Company's common stock may fluctuate significantly in response to a number of factors, some of which are beyond the Company's control. These factors include:
* government regulatory action affecting the Company's services or competitors' services;
* actual or anticipated fluctuations in operating results;
* the loss of key management or other personnel;
* the loss of major customers;
* the outcome of any future litigation;
* broad market fluctuations; and
* economic conditions in the United States or abroad.
THE COMPANY'S CHARTER DOCUMENTS AND DELAWARE LAW MAY HAVE THE EFFECT OF MAKING IT MORE EXPENSIVE OR MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE, OR TO ACQUIRE CONTROL, OF THE COMPANY.
The Company's certificate of incorporation makes it possible for the Company's Board of Directors to issue preferred stock with voting or other rights that could impede the success of any attempt to change control of the Company. Delaware Law prohibits a publicly held Delaware corporation from engaging in certain business combinations with certain persons, who acquire the Company's securities with the intent of engaging in a business combination, unless the proposed transaction is approved in a prescribed manner. This provision has the effect of discouraging transactions not approved by the Company's Board of Directors as required by the statute which may discourage third parties from attempting to acquire or to acquire control of the Company even if the attempt would result in a premium over market price for the shares of common stock held by the Company's stockholders.
And it gets worse. The following was released today. It is an excerpt from Case Financial's year-end financial report.
quote:
Factors that May Affect Future Results
RISKS RELATED TO OUR BUSINESS:
OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.
In their report dated January 9, 2004, our independent auditors have expressed doubt about our ability to continue as a going concern in our financial statements for the fiscal year ended September 30, 2003. Our ability to continue as a going concern is a result of recurring losses from operations, a stockholders' deficit, and requirement for a significant amount of capital financing to proceed with our business plan. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loans where possible. The going concern uncertainty in the auditor's report increases the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 14 to the financial statements, the Company incurred net losses of $3,127,190 and $2,289,036 during the year and nine months ended September 30, 2003 and 2002, respectively, there was an accumulated deficit of $9,865,720 as of September 30, 2003, total liabilities exceeded total assets by $1,962,102 as of September 30, 2003, and the Company has been experiencing cash flow problems. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
GUMBINER, SAVETT, FINKEL, FINGLESON & ROSE, INC.
Santa Monica, California
January 9, 2004
Name of beneficial owner Number of Shares Beneficial Ownership
Bernard Christophe 73,3333 0.47%
CCWIPP 4,040,750(11) 21.06%
Why on earth would CCWIPP keep dumping millions into chumpy investments like this one? This one, Acubid, Asia web and web galaxy sucked up millions of dollars in pension money. Yet the pension plan members say little if anything. What would you say on retirement day if you were told that the pension you thought you had was kaput?
If you think the regulators are going to look after you, you may want to double check your assumptions.
quote:
and the Company has been experiencing cash flow problems. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 14.
Should the company cease to be a "going concern", the management team can move on.
I'm guessing but, I doubt the case financial management team have to concern themselves about having this fiasco on their resume? There will always be a place for them managing member pension funded ventures and who better than those who've done it time and time again. 
Geez there has to be a law against pension theft.
We all know tha Case Financial seems to be a "not out of the ordinary" investment for CCWIPP. Read the financials and weep. Its share prices keep getting lower and lower. AFM Hospitality isn't doing much better. Its shares are languishing in the basement too.
We understand that CCWIPP's Bahamas adventure is heading to court next month too. If things go sideways, CCWIPP could find itself short a huge chunk of change--possibly enough to push the FSCO into actually doing something about the operation of this plan's investment practices.
Hey, Fed Ups. What do you guys think you're going to do when it comes time to retire?
Might you think of changing unions just to get a better pension plan?
What's your views on the CCWIPP?
Weiser,, this is one guy who aint waiting for the "generosity" of any meagre retire plans or soley relying in them. I figure by then in our economy I would still have to work into my 70's. I hope to save as if there is no money set up for then. INVEST INVEST INVEST
The question is what is happening to the $1,200 per year that the UFCW is collecting from you for your pension?
The UFCW has begged that amount from Loblaws. From what I understand additional pension contributions were given at just about the same time that the UFCW agreed to Wal-Mart wages and working conditions for the Loblaws Real Canadian Superstores.
Perhaps one of the Fed Ups could tell us a bit about CCWIPP and what a great deal it is for those with interests in the Bahamas, Grand Cayman, Jamaica and Panama.
Fed Ups, dis bump is fer youse....
C'mon, what does ye say 'bout the CCWIPP?
I was out on a mission in Downsview the other day and noticed that the hotel mentioned in this article (the one that used to be called the Triumph) is going to be converted into condos.
Going in for a closer look I was told that some guy is planning on turning it into a "Tuscan Villa".
Anyone got the lowdown? If not I'm back in the hood this week and will go in again. This time under deep cover. 
Well, well, AFM Hospitality the pathetic CCWIPP investment seems to be at odds with the Ontario Securties Commission.
quote:
...In the event AFM does not file its annual statements by July 19 or its interim statements by July 17, the Securities Commission may impose an Issuer Cease Trade Order. AFM Hospitality intends to satisfy the provisions of the Alternative Information Guidelines during the period it remains in default of the financial statement requirement.
AFM recently announced the appointment of James D. Meier as its new CFO on April 27, 2004....
Mr. Meier is about the fourth Chief Financial Officer to be hired in a little more than 18 months. Now he too has left the organization.
A couple of months back the OSC slapped AFM "Insiders" with a cease-trade order--Insiders like Local 175's Wayne Eldon Hanley and CCWIPP's Eugene Fraser. Now it looks like there may be a complete cease-trade order slapped on the company.
AFM was supposed to have it's financials in order and filed by last Saturday and yesterday. Yesterday was the deadline for the 2003 annuals.
No CFO and no financials might make one think that AFM and CCWIPP's millions invested therein may be in jeopardy.
It's odd, as well, that this public company hasn't issued a media release to advise investors that Mr. Meirer has left the building.
I'll get back in a while with the news about CCWIPP's investment in the Pinestone Resort.
Oh, and did you know that CCWIPP's Bahamas adventure is comming apart at the seams?
Stay tuned for news about the Closure of CCWIPP's South Ocean Golf and Beach Resort.
CA $250 million, going, going, gone? 
I see their stock is trading for about $1.00 a share - when it trades (the last trade was on July 12). Don't the CCWIPP guys - Fraser and Hanley - have a bunch of shares redeemable at $5.00 a share or something like that?
Smells like a meltdown.
Hanley and Fraser are probably crying in their beers today. AFM Hospitality got a full Halt Trading order slapped on them by the OSC.
The CCWIPP has been busy blowing off anything that will generate some cash. Hell, they even sold off the Queens Plate nest. Now their prime tenant, AFM Hospitality, may have to vacate.
Oh, and while were at it, South Ocean has been closed and all the employees have been dumped. the CCWIPP says that it has dumped $60 million US into South Ocean. Then they report that they now aren't charging Father Ronnie any interest on the entire $200 million (South Ocean and British Colonial). Meanwhile they say that they are prepared to dump tens of millions more into those Bahamian dogs.
Is it prudent investing to lend money without interest--especially when there is little hope, if any, of the money being paid back?
What about the Caman hotel and the two Jamaican Hotels? Hey what about the Pinestone Resort?
Terrace Corporation is long gone and bankrupt, but the CCWIPP still leaves it on the books as if the $35 million will ever be recovered.
There are tens of millions into AFM Hospitality and all that money is supposedly secured by what at the moment are worthless "shares" and AFM Assets. How much are a few desks, phones and a lobby coffee table worth these days?
This is just too scary. Case Financial ( which the CCWIPP has sunk a bundle of your pension contributions into) just released it's latest quarterly report:
quote:
OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.
In their report dated January 9, 2004 for the year ended September 30, 2003, our independent auditors have expressed doubt about our ability to continue as a going concern. Our ability to continue as a going concern is a result of recurring losses from operations, a stockholders' deficit, and requirement for a significant amount of capital financing to proceed with our business plan. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside.
...The Company incurred net losses of $3,127,190 and $1,512,452 during the year and nine months ended September 30, 2003 and June 30, 2004, respectively. There was an accumulated deficit of $11,378,173 as of June 30, 2004, total liabilities exceeded total assets by $3,046,368 as of June 30, 2004, and the Company has been experiencing cash flow problems. Those conditions raise substantial doubt about the Company's ability to continue as a going concern....
Duh! Like it took an accountant to make that statement?
Check out the statement from this pissed off investor:
quote:
The Company was served with a complaint in May 2004 filed in the Los Angeles Superior Court, Central District, from an unrelated third party asserting securities fraud, fraud, breach of contract and unfair business practices against the Company and seeking damages of $65,000. The plaintiff claims that she had loaned the Company the sum of $40,000 pursuant to a verbal agreement and was promised repayment within 45 days plus a 25% profit. The funds were utilized by the Company for a non-recourse advance which the Company was unable to recover and the principal amount of this obligation is included in loans payable-unrelated parties on the Company's balance sheet. The Company has made offers to settle this matter and believes the ultimate outcome will not have a material impact on the Company's financial condition.
In addition to the foregoing, the Company has received notice of several other potential claims none of which the Company considers material.
I wonder if the CCWIPP was offered the same "magic beans"?
To boot, Cliff Evans, (Mike Fraser's uncle) has taken a prominent role in this dog.
quote:
As of February 23, 2004, the Company appointed a new Chairman of the Board of Directors [Cliff Evans] who is also an officer, director and/or has a controlling interest in several of the entities that had loans outstanding with the Company. As a result, the Company has reclassified $3,896,603 from Loans Payable to Loans Payable-Related Parties and advances and repayments under these loans have been reflected as related party transactions for the three and nine month periods ended June 30, 2004. As of June 7, 2004, the Company has also reclassified various obligations due and owing to their former CEO and parties related to him totaling $315,000 from Loans Payable-Related Parties to Loans Payable, for net reclassification from Loans Payable to Loans Payable-Related Parties of $3,581,603.
This dog was a non starter from the beginning, but that didn't stop the CCWIPP from dumping $2 million into its rotting carcas. Then when things got worse, they dumped another half mil into it.
quote:
On March 30, 2004, in conjunction with changes the Company implemented with respect to its senior management and its Board of Directors, the lender of the $2,000,000, now a related party through its affiliation with the Company's Chairman of the Board, agreed to a deferral on interest payments and a suspension of any collection actions for defaults previously asserted under this note, including the failure to register the common shares underlying these warrants for resale, for a period of six months, commencing with the date of the interest payment that had been due for February 2004. In consideration of this deferral, the Company agreed to reduce the exercise price on the warrants to purchase 1,000,000 shares of the common stock of the Company at $0.80 to a revised exercise price of $0.50 per share. All other terms of the warrants remain unchanged. The increase in the fair value of the foregoing warrants as a result of the reduction in the exercise price as well as the initial value are being amortized over the remaining life of the warrants and charged to non-cash finance expense.
b. In March 2004, the Company entered into a $500,000 secured loan agreement with the same lender as described in the foregoing paragraph. This loan is due and payable in a lump sum, inclusive of interest at the rate of 12% per annum, on or before the sooner of the date the Company completes additional equity financings aggregating in excess of $3.0 million or September 8, 2004. The loan is secured by a lien on all assets of the Company. As additional consideration for this loan, the Company is to issue 1,000,000 shares of its common stock to the lender. The market value as of the date of the loan of the common stock so issued is being amortized over the remaining life of the loan resulting in a charge for the three and nine months ended June 30, 2004 of $252,778 and $294,395, respectively, to non-cash finance expense.
Viva Las Vegas!
quote:
This loan is due and payable in a lump sum, inclusive of interest at the rate of 12% per annum, on or before the sooner of the date the Company completes additional equity financings aggregating in excess of $3.0 million or September 8, 2004. The loan is secured by a lien on all assets of the Company.
So basically... if the loan payments aren't made as agreed, then the lender gets to keep the assets of a company which couldn't afford to repay it's loans?
Viva loss bogus!
If you'll remember MGI Meat Packers, the CCWIPP loaned them $5 million--no doubt secured by assets. Well, it turned out that MGI only had less than $600 thousand in assets and the CCWIPP wasn't a secured creditor, so they got zip.
When debt exceeds assets then there really are no assets.
Look at it this way. If the dudes had $3 million in assets, which is all that is left over from a $5 million loan, when the dudes folded, the lender would automatically lose $2 million. Who in their right minds would lend the dudes another $500 thousand? That would be like asking to lose $2.5 million.
Then again, the longer Case stays alive, the more time people have to play with Case's OTCBB "penny stocks" on the US and Berlin exchanges.