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November 25, 2005
Stelco shareholder legal brief, Fri., Nov. 25, 2005, 8:36 AM
The Stelco shareholder filing (Nov-24-05) is at this link.
There is, in this long doc, some excellent info on the steel industry, as well as confirmation of some of the points I have been making in the blog. As Pollitt & Co Inc (TSX/IDA firm) make additional legal filings, I will also link them here.
I e-mailed this pdf document late last evening before TickerHost (my excellent server host) was able to set it up on my server with a link to readers who wish to access it directly.
Here is one reader's comment I received already:
I have read through the Pollitt motions and while they form a basis for institutional investors to take a closer look at Stelco, my feeling is that he must be going on the assumption that Farley will blow him away, and is prepared to then go to Appeals etc. There is such a steam-rolling process going on here that one wonders why there has been no one of any authority coming forth to put some balance into things and call into question what has transpired. Some time ago I took a look at the mining operations (Wabush etc.) owned by Stelco that were excluded from CCAA and was surprised at the cash generated, and the high value of these assets. Why were they never put on the block to raise money if there was such a deficiency? I also liked the simple analysis of recent bids for other producers based on value per ton of steel production - simple to understand and not rocket science, but enough that anyone with common sense should see that there is a fraud going on here. There has been far too much power bestowed (self-granted by His Honour by bringing back to life the ancient CCAA with his personal interpretation of "insolvency", which caters to this newly thriving accounting industry specialty) which in turn affects the future of too many people when His Worship doesn't have the knowledge to single-handedly make good judgements in such complicated matters. There should be a tribunal or a bench of judges with support staff and resources to weed out these fraudsters from the judicial system. The stakes are far too high."
As you know, I have no stake in Stelco except perhaps my reputation. And that I'll stake against an utterly disgraceful, shameful process that has been going on in Canada for almost two years in this matter.
Moreover there is no politics involved on my part when I speak out against the Liberal Party governments in Canada and Ontario. I happened to have voted for both of them at the last election, based on issues I felt were important at that time. This time (just so you know my bias), I will be voting for John Tory's PC's in Ontario (he is the most outstanding person remaining in Canadian politics). The federal government will fall on Monday, with an election date to be set for January 16 or 23. I have not decided yet for whom I will vote, but the Gomery Commission report, and some other matters like the Martin/Copps/Stelco affair, have made it impossible for me to vote Liberal.
What I am hoping for in discussing this Stelco case is that independent media and Business Schools pick up on the merits of the shareholders' case. The case study is fundamental to capital markets not ever being hijacked by organized groups" who use laws (and other pretences) other than securities law to steal assets from equity stakeholders.
Like anything in life, there are two sides to the issue. My interest lies wholly in the weaknesses and problems that exist today in capital markets, and to point out that often they are unfair to the owners of capital, for no good reason.
I'm convinced that securities regulators never saw this Stelco/CCAA situation coming, and have been completely unprepared to deal with it. I on the other hand could care less what some judge thinks. I do my own thinking, and have my own opinions. And so should you.
And as long as you do, we will not have to live in a Gulag.
Posted by Posted by Bill Cara on November 25, 2005 08:36:11 AM | Category: Canada