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ScottBurns

Unsecured Creditors' Committee
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Posts: 14
Reply with quote  #16 
I will likely not have any more news until after the 25th.

Scott
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JG

Administrator
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Posts: 960
Reply with quote  #17 
Quote:
Originally Posted by tboll
JG, this is absolutely great news that Scott will be communicating directly to the Forum.  Can I suggest that you set up a "Scott's Corner" or something like that where he can POST news/messages to the forum in one spot and we can readily reference back to them rather than making each item a forum topic or risking some of his posts buried too deep in the thread.


Scott-

If you like that idea, feel free to start a separate thread for just posts from you and/or other members of the unsecured creditors' committee. You could make it clear in the first post that people should not reply in that thread (and if people do, I could then move them to this thread).

I have also set up your "title" to "Unsecured Creditors' Committee" to help others immediately recognize your role.

JG

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harley_52

Senior Member
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Posts: 130
Reply with quote  #18 
I agree with the Chapter 7 suggestion.  I don't think BDI has any future.  The well has been forever poisoned.

Thanks for stepping up.

Feel free to contact me if there's any way I can help.
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ScottBurns

Unsecured Creditors' Committee
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Posts: 14
Reply with quote  #19 
Unless additional monies are found from other sources, the settlement now looks like it would be pennies on the dollar (I have no idea exactly what assets remain).

If the company were restructured under new management and everyone who is owed money were made stock holders, then over time we could be paid back perhaps.  We would all have an interest in the companies' success and perhaps our business and those who could refer would be enough to reestablish a clientele and reputation.

That is the only way I see that we could ever be made whole at this point
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stolenmetal

Junior Member
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Posts: 7
Reply with quote  #20 
Quote:
Originally Posted by ScottBurns
Unless additional monies are found from other sources, the settlement now looks like it would be pennies on the dollar (I have no idea exactly what assets remain).

If the company were restructured under new management and everyone who is owed money were made stock holders, then over time we could be paid back perhaps.  We would all have an interest in the companies' success and perhaps our business and those who could refer would be enough to reestablish a clientele and reputation.

That is the only way I see that we could ever be made whole at this point


Scott,

I agree.  I personally want to see CM burn; hopefully he gets burned by Burns :-). I certainly would like to be made whole (to me pennies on the dollar is an insult-if its what I get I'll still take it though!).  It appears to me that the business model of BD could be made hugely successful (minus the whole not actually buying metal part!).

Just a back of the envelope calculation 20 million in business over 7 years is roughly 3 million a year. In my books, doing at least 3 million of business in a year should lead to a pretty successful business.  At least b/c you figure there were a lot more customers who took possession who aren't involved in this fiasco.

I think in order to do it though you need someone who has knowledge of the silver business. There are several online bullion companies . . .but I don't think there are too many of them . . . but that's my 2 cents.

I trust you will do whatever is in the best interest of all the creditors.
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"In God We Trust"

Junior Member
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Posts: 23
Reply with quote  #21 
 Quote by robertmbeard -"At the exorbitant compensation levels of CEO Bensimon [$300/hr and 7 month possible bonus of $150,000], his staff, and his lawyer," 

Restructuring BD and making creditors the shareholders, seems like the first bit of hope I have read on this forum.

The first order of business would be to put someone in charge that has the interest of all the creditors. Not someone whose only interest is lining their pockets with our investment.

Who is CEO Bensimon and what is his connection with BD and CM? As far as I know Mr. Bensimon has not made any comments on this forum.

Just a few of my thoughts.
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JG

Administrator
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Posts: 960
Reply with quote  #22 
Quote:
Originally Posted by "In God We Trust"
Who is CEO Bensimon and what is his connection with BD and CM? As far as I know Mr. Bensimon has not made any comments on this forum.


Technically, it's CRO (Chief Restructuring Officer), and I believe he was chosen by Joe Martinec, Bullion Direct's attorney. Mr. Martinec has represented companies Mr. Bensimon has helped through bankruptcies in other cases.

As for comments, I do not believe Mr. Bensimon is on this forum. I am not aware of any creditor hearing from him. I sent him an E-mail on July 21, and got a brief response, but nothing after that. I did not hear back from him (or Mr. Martinec) after sending them an E-mail asking if they were planning to file an amended list of creditors (and explaining that I felt their lack of response could potentially cost the estate tens of thousands of dollars (which I did not point out would go to Mr. Bensimon's firm), and that they have a fiduciary duty to creditors). So I have almost no faith in Mr. Bensimon right now.

Although Mr. Martinec has not responded to any of my several E-mails, to his credit I understand that he has been doing a good job responding to creditors. However, if he were to respond to me (who can then report it to creditors), it would save billable hours, saving the estate money, like I imagine a good fiduciary would do. <sigh>

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spainte

Member
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Posts: 40
Reply with quote  #23 
Quote:
Originally Posted by ScottBurns
I looks like Jesse Moore will end up representing the creditors committee.  His fee is $335/hr.  He has extensive experience with bankruptcy and banking law. 

http://www.dykema.com/professionals-jesse_tyner_moore.html

As a separate matter, IRA account holders may have a case as a class action against Equity Institutional, but he would not specifically comment on that.  He did say that looking into that would be in the benefit of all the creditors because recovery from Equity would leave more funds to be distributed to non IRA claimants.

Scott


Thank you Scott for representing us.

I am in the IRA class (legacy storage). I've been looking to enlist some legal assistance but know going it alone would be costly. Are there others in the IRA category who would like to join in and share the bill?

Please private message me.
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nobody

Senior Member
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Posts: 360
Reply with quote  #24 
I've seen a lot of numbers, but let's assume the liability gap is about 20MM.

At the 2% nucleo commission spread, and ignoring storage, that requires $1,000,000,000 in notional value to trade in order to simply make up the gap left behind, and that assumes you don't ship any product or pay any people.

I'm not sure what time frame people have in mind, but let's spread it to 10 years - which seems incredibly generous to me, but use your own.  That requires a notional turnover of 100MM, excluding storage costs, per year.

Because of payment settlement and shipping times, let's assume we can turn inventory over every 3 weeks, or just over 17 times a year (~6mm/turnover on 100mm annually).

Let's pay one person 100k and double the costs of employment to 200k, because round numbers are rounder.

That 200k on 17x/yr means 11k per 6 million or ~.1% (note <point> one percent) per employee, assuming economies of scale won't be met again until 200mm annually.

Professional custodial storage at volume looks to be somewhere south of .5% (less than half of one percent) - you can probably pass that on to the customer, which will push the spreads up a bit more.

Let me be clear, I probably have a glaring math error up there - but I think my orders of magnitude at least pass my sniff test for not being too embarrassing to share.

As I read it, over 10 years with one employee at 100mm$ of volume/year, the minimum viable spread to repay customers comes somewhere close to 2.5-3%.  Any faster or more employees, and the spread would need to increase.  At what point of spread does the business become a non-starter?

Actually, let me draw no conclusions - did I miss the spitball-math in a stupid way somewhere? Are my guesses and variables even reasonable?  This is what I see an 'in-place' restructuring looking like, and I've probably ignored costs and benefits in various areas.


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tboll

Senior Member
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Posts: 292
Reply with quote  #25 
Perhaps they aren't thinking that they can pay themselves back by the profits of the company.  Maybe they want to get the company up and running and show that it can be profitable, and then they hope to sell the company for as close to the 20M as they can and then pay everyone back.
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jkline

Member
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Posts: 83
Reply with quote  #26 
Nobody,

Nothing wrong with your math:  a 1-2% spread means bankruptcy.  Even for Amazon, it is only a matter of time.

Anybody that argues with you, or me, has never run a business.

Fifty cents says Nemo will shoot his fool mouth off about it.
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taratot

Junior Member
Registered:
Posts: 19
Reply with quote  #27 
Thanks, Scott, for stepping up to represent the unsecured creditors. I am sure 100% of us are fully behind you.

I do like your idea that everyone owed money could be made stockholders in a new enterprise. I'm interested to know what others think, and if this would be a viable proposition.

JG: A separate non-reply thread on the unsecured creditors committee is a great idea. That way we would be able to easily keep up with developments rather than searching all threads. 


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robertmbeard

Member
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Posts: 81
Reply with quote  #28 
While I understand the hopeful sentiment behind the thought of a restructured Bullion Direct and Nucleo eventually paying us back, I do not think such an enterprise will be successful.  I have 4 reasons for this:

1)  People who have been defrauded don't usually return as customers
2)  People who hear of Charles McAllister's impending arrest and indictments will not likely want to do any business on Nucleo with a restructured BDI
3)  Spreads are very thin in the bullion industry, with competition fierce
4)  Even if the above 4 points were wrong, it'll take more than 15 years to pay us all back the $32 million [latest #s subject to change...] owed
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"In God We Trust"

Junior Member
Registered:
Posts: 23
Reply with quote  #29 
I still like the idea of creditors being made shareholders in a restructured business.

But, was BD ever a profitable business or was it run like a Ponzi scheme right from the start? This would be a good indicator if a new business could be successful.

Hopefully investigation will reveal where all the loses went to. You just don't keep running a business with those kind of loses unless it is your cash cow.
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"In God We Trust"

Junior Member
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Posts: 23
Reply with quote  #30 
robertmbeard - while typing my reply you posted your comment. Your comment had no influence on what I wrote.
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