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tboll

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Reply with quote  #31 
Couple of questions...
1)  If customers are made shareholders of the New BD, does that mean that they will likely have to forgo any return of money at this time and instead put that money (or "credit") back into the business?
2)  If after a year (more or less) it is determined that the New BD is still insolvent, do we just go through another bankruptcy cycle and this time instead of being creditors, we are only shareholders and as such, may get back even less or nothing at all?
3)  Will the New BD maintain 100% ownership of the IP (nucleoware) and perhaps be able to generate some revenue through licensing, etc?
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robertmbeard

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Reply with quote  #32 
In 1 of the documents submitted to the BK court [I forget which one...], it showed annual income (profits) of about $1.5 million for the past 3 years at BDI.  About a year ago, if my memory serves me correctly [don't always count on that...], Bullion Direct's website mentioned something about reaching $1 billion of total revenues (Nucleo plus catalog orders) over the 14 year life of the company.  If that is true, that's about $70 million/year in annual revenue (Nucleo plus catalog orders).  That gives a profit margin of about 2.1% ($1.5 million divided by $70 million).  That sounds about right for the fiercely competitive, razor-thin spreads in the bullion industry. 

At $1.5 million/year in profit income, it would take over 21 years to pay back all creditors/victims the current estimate of $32 million owed.  Even if you subtract $150,000/year from Charles McAllister's quoted final year income to boost the profit income to $1.65 million/year, it would still take over 19 years to pay back all creditors/victims.

To bring this down to a 5 year payback of creditors/victims, you need to do 1 of the following (or a combination):

1)  Boost profit margin to over 9.1% = $6.4 million/year of profit income (reasonable for non-bullion industry companies but laughable for bullion industry companies)
2)  Boost total revenues from Nucleo and catalog activity to over $300 million/year (for the same 2.1% profit margin to generate $6.3 million/year profit income), which is a 330% increase in revenues

Good luck with that...
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harley_52

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Reply with quote  #33 
Pursuing a "new and improved" BD via Chapter 11 will cost a LOT of money for lawyers, experts, and executives.  With the money all gone, a poor reputation, and an alienated customer base, I think it's a bad idea.

A better idea, in my humble opinion, is to fold the tent and go Chapter 7, accepting the inevitable, and saving what little money is left to be divided among those who lost it in the first place, not wasting it on the folks who profit from these kinds of disasters.

Just my two cents....
,
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PM

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Reply with quote  #34 
I for one am willing to wait awhile, in the hopes that the FBI will find the missing money, as in offshore bank accounts in Dubai and Italy.
Give them time to do their job and follow leads as to where all the money went.
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nobody

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Reply with quote  #35 
I am willing to wait a full 20 years if I think we'll be made whole - what I don't want to discover is that sitting on our hands discussing it passed through the statute of limitations for persons and activities of interest.

I don't know where the money went, but I think it'd be foolish to ignore that at least a couple of members of Charles' family appear to be creditors - after all, if a crime really did occur, shouldn't that be the easiest to claw back?
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PM

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Reply with quote  #36 
Let's let the FBI determine if there has been any criminal activity.
Have another drink and relax nobody, wild speculation helps no one.
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nobody

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Reply with quote  #37 
A corporate veil doesn't get pierced because creditors ask nicely.

It gets pierced because they can show officers committed offenses against the company.

I'm not saying chase with pitchforks, but if you want more than 5 cents on the dollar, you should follow the money.

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JG

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Reply with quote  #38 
Quote:
Originally Posted by nobody
I'm not saying chase with pitchforks, but if you want more than 5 cents on the dollar, you should follow the money.


... and then the question becomes whose role is that?

[1a] Bankruptcy: Bullion Direct, or
[1b] Bankruptcy: Unsecured creditors' committee, or
[2] Class action lawsuit against any individual(s) responsible (as occurred with Tulving), or
[3] Criminal proceedings (e.g. as occurred with Tulving, although the seized assets would have been part of the bankruptcy had they not been seized), or
[4] Some combination of the above, or
[5] Some other resource I am not thinking of?


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nobody

Senior Member
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Posts: 360
Reply with quote  #39 
To the best of my knowledge, the FBI in any event isn't going to bring civil penalties against BD with the intent of making creditors whole - that's not, to my understanding, their job.

Any actions creditors want for civil remedy must be brought by the creditors themselves (either via 1a/b, or 2).

Criminal => Jail.
Civil => Cash.

The government brings the former, the creditors the latter.  They may both depend on similar facts to prove each independent case though.

ADD: And a criminal conviction will make proving the civil case easier, but if records have since been destroyed due to liquidation, how will you know who to collect from?

Think back to OJ - just for comparison.  He won the criminal case, so he's not in jail.  He lost the civil case, so his book got taken, the profits given to the family, and they got to change the cover from the left to the right.

[book-covers] 
 
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JG

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Reply with quote  #40 
Quote:
Originally Posted by nobody
Any actions creditors want for civil remedy must be brought by the creditors themselves (either via 1a/b, or 2).


With the Tulving case, part of the $3M+ to $20M of seized coins are being forfeited as part of a criminal forfeiture (28 USC 2461(c)), and going to the bankruptcy Trustee to be distributed to creditors. I'm not sure why that could not apply here, too (there could well be reasons that I am not aware of).

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nobody

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Posts: 360
Reply with quote  #41 
Seized property of the estate was returned to the estate no?

Or did they seize property of other persons and then transfer it to the estate?
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JG

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Reply with quote  #42 
Quote:
Originally Posted by nobody
Seized property of the estate was returned to the estate no?

Or did they seize property of other persons and then transfer it to the estate?


Ah, good point. Although I do not see the documents specifying, I believe it was all seized from Tulving's headquarters (which would two days later become the estate). So that doesn't quite match what happened here (with the timing, and who the money came from).

FWIW, the charge of wire fraud was against both The Tulving Company and the owner, and the list of property listed as being forfeited included "A forfeiture money judgment in the amount of at least $15,000,000, such amount constituting the proceeds of the violations set forth in this Bill of Information." It then goes on to separately list "Any and all currency, stones, and metals seized by law enforcement." As far as I know, no cash was seized, so I am not sure how the "money judgment" piece applies and where that money would come from.

In any case, this might be a very good question (which action(s) could get money from an individual responsible for the loss) for someone who is already paying for an attorney.

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JG

Administrator
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Reply with quote  #43 
Quote:
Originally Posted by nobody
Seized property of the estate was returned to the estate no?


I should clarify about this: the property was not being returned. It was being treated as forfeited due to criminal activity, and rather than the U.S. Government auctioning it and given some/all of the proceeds to "Victims", they decided to send the metal to the Trustee for the bankruptcy estate who they felt was in a better position to sell/auction the metal and distribute it to the creditors (who are nearly identical to the "Victims").

So the seized property was essentially seized from the estate and returned to the estate, but it could have worked out differently (the bankruptcy Trustee was pushing for this outcome; a less experienced or less motivated Trustee might not have).

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taratot

Junior Member
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Posts: 19
Reply with quote  #44 
Quote:
Originally Posted by robertmbeard
In 1 of the documents submitted to the BK court [I forget which one...], it showed annual income (profits) of about $1.5 million for the past 3 years at BDI.  About a year ago, if my memory serves me correctly [don't always count on that...], Bullion Direct's website mentioned something about reaching $1 billion of total revenues (Nucleo plus catalog orders) over the 14 year life of the company.  If that is true, that's about $70 million/year in annual revenue (Nucleo plus catalog orders).  That gives a profit margin of about 2.1% ($1.5 million divided by $70 million).  That sounds about right for the fiercely competitive, razor-thin spreads in the bullion industry. 

At $1.5 million/year in profit income, it would take over 21 years to pay back all creditors/victims the current estimate of $32 million owed.  Even if you subtract $150,000/year from Charles McAllister's quoted final year income to boost the profit income to $1.65 million/year, it would still take over 19 years to pay back all creditors/victims.

To bring this down to a 5 year payback of creditors/victims, you need to do 1 of the following (or a combination):

1)  Boost profit margin to over 9.1% = $6.4 million/year of profit income (reasonable for non-bullion industry companies but laughable for bullion industry companies)
2)  Boost total revenues from Nucleo and catalog activity to over $300 million/year (for the same 2.1% profit margin to generate $6.3 million/year profit income), which is a 330% increase in revenues

Good luck with that...



Totally take on board what you say (and can't really argue with it).

But who says a new enterprise would have to continue the old business - just selling bullion? There are lots of other possibilities to enhance stockholder return.

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tboll

Senior Member
Registered:
Posts: 292
Reply with quote  #45 
Yes, one of the first non-metals that I would like to see listed on the New&Improved Nucleo-exchange would be trading of Shares of the New&Improved Nucleo Company.
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