My view is the only chance BUD shareholders have of getting any money back is a class action against those who did due diligence on the LIFX purchase. BUD obviously paid way too much money for LIFX as is evidenced by the total write off of goodwill paid for the LIFX business. I will go back and check the goodwill component in purchase when time allows. Quantifying the claim should be very easy. Problem is the class action lawyers will take most of any recovery so once again the retail shareholders will be left with crumbs, if anything at all. It is certainly well past time that ASIC started taking an interest in the class action industry and stopped the profiteering by lawyers. Yes they take a small risk on fees but risk should be commensurate with reward.
The other possibility is a claim against directors. Seems little doubt there has been gross negligence at the governance and management level within BUD for a number of years. Just hope the directors made sure their professional indemnity insurance premiums were paid up to date.
The financiers will be keen to recover their loans which are secured so they will have first dibs on any recoveries from either of these sources.
Existing best chance is if the existing business can be recapitalised, strong effective management appointed and BUD starts to generate decent cash flows and profits. This will mean yet further massive dilution for existing shareholders. I am certain all possibilities will be investigated and really depends on how PDF analysts determine the best outcome for recovery of their loan.
The main positive either way is DM has gone to the knackers yard which probably gives BUD a better chance of recovery under effective management leadership and control.
The writing was on the wall for this outcome when BUD were conned into massively overpaying for LIFX. I too believed the BS from management to my ultimate significant cost.
BUD Price at posting:
0.6¢ Sentiment: Hold Disclosure: Held
