oh! I forgot, and to differentiate the difference between Sullivan's view that 'impairments' were final (you know, the ones they took the July and August 2008 distributions to pay), and Ellis view they are only 'paper losses', he used the word 'Recent' to describe the impairments he referred to in his recent reply to unit holders (Re: Balmain Trilogy).
Sure, 'recent' splits it up nicely - the 'recent' ones might be recoverable, but the old ones, well, they're different - don't worry what Sullivan said, this is Ellis speaking now.
There was also the matter of 'units' (in the fund) for 'units' (property) - another 'hopeful' gesture.
City's policies were doomed to failure: Allowing a discharged bankrupt to run a top 100 listed company; allowing the fund to make business with companies with at least one influential discharged bankrupt; continuing to advance money to defaulting lenders; believing it to be of no use to make lenders pay because it didn't guarantee final payment of the debts; and by getting itself into so many sides of critical conflicts.
Its wasn't just unit holders City betrayed, it betrayed its own share holders - look at the share price - an absolute disaster.
At the end of 2007, a net loss of $93.5m of investor monies in the fund, $50m (at least) of impairments, fund debt at $240m and a waning market. An extra $160m in defaulters foreseeable in February 2008, and an extra $240m of defaults due in March 2008.
Maybe the outcome for unit holders and share holders might have been different if City had frozen the fund on 1 September 2007 instead of increasing the fund's debt to $240m: If City has pressed repayment by lenders from the fund instead of increasing the Fund's debt to $240m: If City had been honest with investors.
There has been a price for all of us in this mess.
CIY Price at posting:
4.3¢ Sentiment: None Disclosure: Not Held
