abobo, page-4

Davo, the senior counsel from the legal firm (I posted on some time ago) stated that they are watching the situation but a class action is highly unlikely at this stage despite his opinion that investors who were affected by the misleading information admitted by CMQ in the ASIC case have a very strong case against CMQ.

Since that guilty plea, CMQ had misled investors on the 2005 Inviro Sale contract that was hatched to satisfy the then Mizuho sale covenant and reported by Williams as achieving the sale price, unconditional and not financed in any form or shape by CMQ. Obviously we know from the Supreme Court case that this was not the case.

In addition, serious question arose from DW’s announcements of the container loads “delivered to SA” that was later changed to “positioned in SA”. The announcements misled many investors to believe they were destined for the Inviro contract and the flood-gates of orders from the SA wonderland was about to burst open. Thanks to the court case, we know now that the goods were shipped to SA for storage at great expenses to CMQ.

However a legal proceedings must consider the chances of converting the court awards into cash. After the bondholders have gone through the CMQ kitty, there will be nothing left for any court awards. Legal actions against a company that likely to fall over the edge will be futile no matter how strong the case may be.

Legal action is possible in cases where the directors have insurance. However the said legal counsel stated that it is unlikely CMQ directors are insured and even if they are, it may (without sighting insurance policy he's only guessing) only cover mistakes and not misdemeanors.

In summary, the chances of winning a misleading and deceptive behavior action against CMQ today is much stronger that at the time of the ASIC guilty plea, but it is extremely unlikely because it is throwing good money after bad money. If CMQ survives the court debacle and miraculously improves its financial position, the class action is waiting in the shadows ready to strike.

Cheers

PS: Quoting an outback MOR@N:"There is no chance of a class action succeeding unless the company is liquidated, the reasoning being there is always the possibility it will recover". Stupidity knows no bounds. LOL.