Roaring Forties Update - July 2006

[Ron Earp]

Dear Interested Parties,

I've received some information from our attorney regarding the situation at Roaring Forties and the Administrators. Not a whole lot has happened since the last report two months ago, but I will relay what I've been told.

• Another (final) creditors report will be made at the end of this month detailing activities.
• Unsecured creditors may receive a very small dividend, but this is not absolutely certain.
• The administrators are working on making a dividend to the former employees and that is supposedly in progress.
• The administrators have made a report to the ASIC regarding possible criminal charges.
• They have a statement of assets from the Robert Logan - and essentially it shows he owns nothing, home in wife's name (and I've heard is off the market, do not know if true), thus civil suits against him would not be worthwhile.

Essentially, it appears that what we thought would happen is going to happen - that the company went belly up, got sold, and Robert Logan washes his hands of it with no legal ramifications. I'm not passing judgment one way or the other, just relaying the information as quickly as I receive it so everyone is equally informed. I feel that if we lived in Australia and were affected we've have more avenues for pursuit of lost revenue. But it appears that the end is nigh for any any foreign creditors getting a penny from RL and RF. A sad tale.

Best,
Ron

[Bill D]

That is truly sad. It appears Mr. Logan knew the end was near and put the house in his wife's name. He is certainly persona non grata here in the US, the UK and other parts of the world.

Bill D

[Mike Dozier]

If RL is convicted of any criminal charges...what would happen?
Fines ? Jail time ? Whipping with a wet noodle?

MikeD

[Keith Hardy]

Originally Posted by Bill D

That is truly sad. It appears Mr. Logan knew the end was near and put the house in his wife's name. He is certainly persona non grata here in the US, the UK and other parts of the world.

Bill D

If that were the case, that is blatant fraud. So, that action of placing sizeable assets in his wife's name solely to avoid responsibility could be unravelled in court and thus the asset could be seized. It would take a concerted effort by the unsecured creditors to garnish this asset. Lawyers will win in the end though....

[Pete.]

Let me preface this by saying that I am not a lawyer, but my understanding of Australian law is if you transfer assets from your name to your wife with knowledge or a suspicion that you were about to become or were insolvent those assets could be seized.
I think that there used to be a law that if assets were transferred more than a year prior to the insolvency then they were safe from creditors. I believe that has recently changed and there is now no time limit.
If however Mrs Logan bought the property in her own right and there was no transfer from Mr Logan the assets are hers and not at risk.

As I said this is my understanding but I could be wrong, maybe there is an Australian lawyer member of the forum who could advise.

[Peter D]

A Land Title Search reveals Verona Logan as the sole proprietor from 22 Jan 04, with a mortgage taken out on that date, then another one on 10 May 04.

Unfortunately, it doesn't show who she bought it from, but I am fairly sure that the house was acquired by the Logans around 2004. Therefore it seems unlikely that there was a transfer from RL to his wife.

Kind Regards,

Peter D.

[CliffBeer]

I'm not positive but I believe that Australian law is consistent with US community property laws. Meaning, the assets of either member of the marital estate (husband or wife) are held jointly in the way of joint tenants such that all assets, regardless of whom may be named on a title, for example, are subject to the debts and burdens of the other member of the marital estate. In short, I expect it doesn't make any difference whos name is associated with any particular asset as all assets held by either h or w are subject to the debts of either. There are limited exclusions - for example, inheritences under certain circumstances where the inherited assets are not commingled in any way with the marital estate assets.

Not absolutely positive but I believe this is how it works down under.

[Pete.]

Cliff, I'm not sure either but there have been plenty of examples over here that have been reported in the popular press, (and we know they are never wrong) where charlatans have gone broke and been sent to jail and assets
have seemingly been lost in a maze of family trust's and distributions and very little of the money has been recovered for the creditors.
Alan Bond and Christopher Skase are two famous examples.

[Peter D]

Unless there have been some significant changes in the last 10 years or so, my understanding is that husband / wife assets are considered separately (even in divorce/custody cases, where they are then apportioned by the court).

An "acquaintance" of mine has gone bankrupt twice - last time owing $600k to the tax office & a similar amount to a supplier. The house was in his wife's name from the beginning & his total assets at the time of the action were $140. They are still living in the same Sydney harbour-side palace, walls lined with Dobel originals, 2 x Porsches in the garage - all in the wife's name from the start.

He called it "risk management" (and was extremely nice to his wife) !!

Kind Regards,

Peter D.

[CliffBeer]

Originally Posted by Pete

Cliff, I'm not sure either but there have been plenty of examples over here that have been reported in the popular press, (and we know they are never wrong) where charlatans have gone broke and been sent to jail and assets
have seemingly been lost in a maze of family trust's and distributions and very little of the money has been recovered for the creditors.
Alan Bond and Christopher Skase are two famous examples.

Hi Pete, yes, two notable examples indeed! I think there are really two seperate issues here which may be confounding things - the notion of seperate, or joint, assets (between h and w) is different than the notion of a preferential transfer. A preferential transfer is a transfer of wealth outside of the marital estate totally - to a trust or another family member altogether, just as you gave examples of. And, yes, you're exactly correct, people make such transfer specifically for the purpose of protecting assets against liability. For such transfer to really be effective/protective however it must generally be made in such a way that control of the asset is lost by the transferor otherwise it will be deemed ineffective and brought back into the marital estate. Finally, where such preferential transfers are made on the eve of bankruptcy, most bankruptcy courts will "reach out" and bring the asset back into the bankrupt debtors estate so the administrators have the value to use to attempt to pay of creditors. It's a messy process.....

Really hope some of the unfortunate people who put money down up front get some $ back but it's not usually the case, particularly for unsecured creditors such as these folks....

[CliffBeer]

Originally Posted by Pete

Cliff, I'm not sure either but there have been plenty of examples over here that have been reported in the popular press, (and we know they are never wrong) where charlatans have gone broke and been sent to jail and assets
have seemingly been lost in a maze of family trust's and distributions and very little of the money has been recovered for the creditors.
Alan Bond and Christopher Skase are two famous examples.

Hi Pete, yes, two notable examples indeed! I think there are really two seperate issues here which may be confounding things - the notion of seperate, or joint, assets (between h and w) is different than the notion of a preferential transfer. A preferential transfer is a transfer of wealth outside of the marital estate totally - to a trust or another family member altogether, just as you gave examples of. And, yes, you're exactly correct, people make such transfer specifically for the purpose of protecting assets against liability. For such transfer to really be effective/protective however it must generally be made in such a way that control of the asset is lost by the transferor otherwise it will be deemed ineffective and brought back into the marital estate. Finally, where such preferential transfers are made on the eve of bankruptcy, most bankruptcy courts will "reach out" and bring the asset back into the bankrupt debtors estate so the administrators have the value to use to attempt to pay of creditors. It's a messy process.....

Really hope some of the unfortunate people who put money down up front get some $ back but it's not usually the case, particularly for unsecured creditors such as these folks....

[Chris Coote]

A RF owner has told me as of yesterday he has made several phone calls to the new owners re parts and to date his messages have not been returned.Definitely not off to a good start.A sign of things to come????

[Ian K]

Originally Posted by CliffBeer

I'm not positive but I believe that Australian law is consistent with US community property laws. Meaning, the assets of either member of the marital estate (husband or wife) are held jointly in the way of joint tenants such that all assets, regardless of whom may be named on a title, for example, are subject to the debts and burdens of the other member of the marital estate. In short, I expect it doesn't make any difference whos name is associated with any particular asset as all assets held by either h or w are subject to the debts of either. There are limited exclusions - for example, inheritences under certain circumstances where the inherited assets are not commingled in any way with the marital estate assets.

Not absolutely positive but I believe this is how it works down under.

Cliff, that is not entirely true in the US. Each state handles it differently - some
states have community property laws, others do not.

Ian

[Owen C]

Originally Posted by RF054

A RF owner has told me as of yesterday he has made several phone calls to the new owners re parts and to date his messages have not been returned.Definitely not off to a good start.A sign of things to come????

Gee Chris thanks for the support!
I'm not surprised you friend hasn't had a timely response. We are not yet ready to conduct business in a professional manner. We are very very busy rebuilding the basket case that was left after the Roaring Forties implosion. It's not pretty!
There is no inventory system, there is no logical parts numbering sequence. or even complete pick lists for the sub assemblies that are documented. The previous company used a great deal of "internal undocumented knowledge" that we do not have access to because we are in no way associated with Robert Logan, and Sam the only other bank of knowledge is engaged full time somewhere else.

This means we are reconstructing a parts manufacturing business that was built up over 9 years. Please understand it's not like RL walked out and turned the lights out and we came in and turned them back on again. This is a significant body of work. Although we bought the designs and IP a lot of it is documented in exercise books that we must first decipher and then get converted to CAD. There is not a complete set of drawings for the parts that need to be manufactured so we have to reverse engineer and redesigning as we move through the mess.
And my favourite part ....We also have to re-negotiate supplier deals at every turn, and I can tell you that's a lot of fun. ring ring ...hello, Hi this is Owen from Roaring forties......YOU B&57ards OWE US MONEY.....No no no we bought the assets of the old Roaring forties we're need to speak to you about supplying this new and completely independent operation with components so we can keep our customers happy.. YEAH WELL YOU GUYS OWE US A ZILLION BUCKS, YOU BETTER PAY THAT BILL FIRST!... no sorry you don't understand, we're nothing to do with Robert Logan we are a completely new and separate organisation ............................. etc etc etc.

So I'm not surprised we've missed some calls, and as you say it's not a good start but then again We haven't actually started yet!
please refer to : New RF Company Formation

WE are trying to help as many people as we can while we get things operational, as I have said previously all we can do is provide on a best effort basis until we have real inventory and financial systems online, otherwise it really will be a very bad start and probably a short run as well.
However we are not prepared to accept that. So apologies to your friend perhaps he can email me on owen@roaringforties.com.au and I'll see if we can help him.

Kind regards Owen

[Alex Hirsbrunner]

Hello Owen,

Given the current lack of a complete solution for adapting an 01E transaxle to a SBF as was previously offered by RF, I would be very grateful for any technical support you could lend any of the folks (like me) that put down deposits on an (old) RF and purchased O1Es for them. The support I am suggesting is sharing (privately or publically) the supplier and part numbers for the flywheel, clutch, starter etc. if that information becomes available to you as your reestablish the RF business.

I know that Fran Hall and others have been working (kudos to all involved) to provide a solution for those of us who have 01Es for our (old) RFs and have now purchased an RCR, but I realize that this cannot be at the top of the RCR priority list.

This would be a great show of good faith on the new RF's behalf, and would have virtually no cost to your new business.

Thanks for your consideration,

Al H.

[Dan Weilacher]

"There is no inventory system, there is no logical parts numbering sequence. or even complete pick lists for the sub assemblies that are documented."

Hi Owen, good luck in the "New RF " . Your statement I posted above would show why the past "Old RF " customers were always short parts and or had hardware and such that was not right for the job , and many trips to the local hardware store. Good for you in taking the time to get it right.
Sincerely , still under construction 091 , Dan Weilacher.

[Ian K]

Originally Posted by ahirsbrunner

Hello Owen,

Given the current lack of a complete solution for adapting an 01E transaxle to a SBF as was previously offered by RF, I would be very grateful for any technical support you could lend any of the folks (like me) that put down deposits on an (old) RF and purchased O1Es for them. The support I am suggesting is sharing (privately or publically) the supplier and part numbers for the flywheel, clutch, starter etc. if that information becomes available to you as your reestablish the RF business.

I know that Fran Hall and others have been working (kudos to all involved) to provide a solution for those of us who have 01Es for our (old) RFs and have now purchased an RCR, but I realize that this cannot be at the top of the RCR priority list.

This would be a great show of good faith on the new RF's behalf, and would have virtually no cost to your new business.

Thanks for your consideration,

Al H.

Al,

Have you tried Kennedy:

http://www.kennedyeng.com/

I think they made a 302 - Audi 016 at one time, so maybe they have an
adaptor for the 01E?

Ian

[Brett James-McCall]

Nope - different mounting points, already tried.... I beleive the the 01E has the same mountign as my 01X...

Brett