The "at least 650 million in value" is the hammer to get them to the table. But, how can CGMR trust these guys (LM). Wits was fooled once with the 50/50 freeze out at CGMR and then fooled again with the CIC deal with LM in April 2011 and extended until October 2011. So, what happens? CIC goes in and runs ops for LM. Obvious by now for King that this partnership is untenable. Won't get fooled again, right?
I think perhaps the 650M is to get this mine into receivership. This would provide cash flow if mine is still operating. It would get 3rd party accounting. Damages would be past revenue lost to unavailable accounting by LM. This could also put King on the path to control as CEO and legal representative of CGMR. Receivership is mentioned in count II and in the closing statement. So, give us control (Wits) or face the prospect of 650M (at least)in damages and angry shareholders not to mention possible criminal repercussions.
LM wrote the mine off on their books. Took a goodwill charge for that. What are the legal ramifications for that action concerning control of mine at this point. Anyone?
Wits has a e-mail. Do they have any more? I think there is a distinct possibility.
Would Lu and Zeng provide affidavits? Do they care? I think they just want their money and will go with whichever side will provide it.
As stated before by myself, I do not want a cash settlement. I want the mine that I invested in from the beginning, through the EasyKnit debacle, the blackout period that lasted for months, the trauma of watching this stock almost die. And I believe that is what, ultimately, King and co. is going for.
Higher any thoughts? Ed? Witsstockjock?
Just musing outloud.
The warning on this stock has increased over the weekend. It is affectively because the companies filings have not been up to date. This is of course part of the LM plan in cutting off the money to Wits. I am sure that Wits's attorneys now they are in will be working to get the filings up to date. This is serious, but meaningless as to the numbers involved. The company owns what it does and the value is there. When the filings catch up, it will only make this stock that much more expensive to buy. We have a unique opportunity to buy before the company is refiled, and then all hell will break loose on the stock price. So for me this is a high flyer with a huge upside. I will buy here, thank you, and take the risk that there is something i don't know, but rely on what i have found and do know.
I sold last year for a Tax loss of my shares I bought years ago figuring WITS was dead, I had roughly 7000 thousand shares average price of $.50 ,To my surprise I looked at my holdings more closely and I still hold 200 shares , But I'm thinking more of a Class action law suit now , which could enevitably be forwarded to LM for breach of contract ,since the terms were if I remember corectly after 2 years then the 2 companies will split the profits 50-50,but we never got our %50
Bates should be further developed IMO. World class property!
Wits Basin currently owns 35% of the issued and outstanding shares of capital stock of Kwagga Gold, a wholly-owned subsidiary of AfriOre International. The Company recently executed an agreement with AfriOre whereby Wits Basin may acquire the remaining 65% equity interest of Kwagga. Kwagga holds exploration rights to the FSC Project located in South Africa which is comprised of several hundred thousand acres that are adjacent to the main Witwatersrand Basin, the most prolific gold producing region in the world. The Basinís seven gold fields have produced more than 1.5 billion ounces, or 35% of the world's gold since the late 1800s and is still believed to contain more than 1 billion ounces. Kwagga has accumulated more than $14 million worth of unique and comprehensive data that appears to support the theory that the FSC Project area could contain a southern extension of the main Witwatersrand Basinís gold producing mineralogy. The possibility exists for the FSC Project to host 100 million ounces of gold with a value in the billions.
Cases & Clients:
• Represented the majority shareholder of a closely held corporation in a suit brought by minority shareholders, who sold their stock for $100 million less than they would have received had they held their stock until the majority shareholder sold the company two months later. The jury returned a defense verdict for the majority shareholder on all counts.
• Represented numerous high-net-worth individuals and spouses of such individuals in divorce proceedings involving contested issues of asset valuation, property division and alimony.
• Established and managed one of the largest family offices in the United States.
• Obtained significant monetary settlement for real-estate developer on its breach-of-fiduciary-duty claims against its investment bank for the bank's failure to fund the closings of numerous sale/leaseback transactions. Discovery uncovered scheme by the bank's lending officers to squeeze out the developer and seize the highly profitable deals for a company in which they held an interest.
• Managed and settled significant defamation claims against a British tabloid.
• Obtained judgment on behalf of company and individuals sued in $20 million theft of trade secrets and source code case.
• Served as Counsel to Sands Aviation, the largest private flight department in the United States.
Managed negotiations for the acquisition of a foreign casino.
• Obtained judgment in federal court on behalf of a of public company sued by Harvard University for trademark infringement for the use of "Harvard" in corporate identity.
• Represented principals in the acquisition of a Las Vegas casino property.
• While Counsel to Las Vegas Sands Corp., managed litigation involving hundreds of millions of dollars in claims for finders' fees relating to the award of a foreign gaming license.
• Represented designer and manufacturer of collectible currency replicas in copyright infringe ment case against national marketing company. After the U.S. Court of Appeals for the Second Circuit upheld the trial court's findings that artistic replicas of actual currency were entitled to copyright protection, reached a confidential settlement with the defendant and its insurers.
Obtained judgment on behalf of a commercial landlord against claims by major tenant of constructive eviction on account of toxic mold.
SIGNIFICANT RECENT DECISIONS
Adelson v. Adelson, 60 Mass. App Ct.753 (2004)
Adelson v. Hananel, 510 F.3d 43 (1st Cir, 2007)
President and Fellows of Harvard College v. Harvard Bioscience, 204 F. Supp. 2d 134,(Dist. Mass. 2002)
Professional Associations and Memberships:
Boston Bar Association
Massachusetts Bar Association
Franklin H. Levy joined Lawson & Weitzen, LLP in 2011 as a Partner. He has over thirty-five years of diverse experience. Much of his career has been spent in Boston as a trial lawyer, focusing his practice on a wide range of personal and business issues. He represents individuals in divorce and probate trials, officers, directors and shareholders in corporate litigation, property owners and developers in real estate disputes, and other contentious and high stake areas of the law. In 2005 Mr. Levy left private practice and joined the Las Vegas Sands Corp, where he served as counsel to the company. In that role he managed the company's worldwide litigation, oversaw its trademark portfolio, negotiated gaming related matters and spearheaded government relations issues in Asia. While in Las Vegas, Mr. Levy also assisted in the establishment and representation of a significant family office. He rejoined Duane Morris in 2010 and was a member of its Trial Practice Group and Gaming Industry Group before joining Lawson & Weitzen.
A member of the Boston and Massachusetts bar associations, Mr. Levy is a 1971 graduate of the University of Pennsylvania Law School, where he was president of his class, and a 1968 graduate of Yale College.
I have been doing some research, I will post what I have found out and you decide where this conflict is going. Please note for the record - I like the future opportunities for both companies should this conflict be resolved... soon.
WITS and LOND created a documented business relationship(s) based on mining assets which WITS originally uncovered and developed to the point where LM was interested in helping operate them. I say "documented business relationship" because no matter what side you are on - WITS seems to have volumes of clear documented evidence of what each side committed (in writing) to do in the business relationship(s). The bottom line here in this argument is that LM doesn't seem to care what they committed to do(in writing) in those agreements, but rather they bullied the changes they wanted going forward... post agreement. WITS apparently depended on LM for cash and operating funds and when LM withheld those funds or renegotiated side agreements with the mining assets behind WITS back, WITS clearly suffered HUGE financial damages as the result of LM's dishonesty and non-performance. Now I understand that I am painting a one-sided picture of LM being dishonest and self-serving here, but the facts are what they are. When LM back-doored WITS and operated the mining projects without honoring their agreements with WITS, WITS and their investors struggled and withered away to almost non-existence due to lack of cash and investor interest in what were now, non-performing mining properties. (when this all collapsed, I believe the stock went from $1.20 (USD) down to less than 1/2 of a penny (USD).
WITS had literally no recourse against LM who was based in England. English rule of law provided LM a very cost prohibitive shield from a struggling WITS to come to London and file what would be a very expensive lawsuit for non-performance. Where this case takes an interesting and fateful turn is when LM greedily decided to sue WITS in the USA for $1 million that they claim was due them from some previous loan made to WITS. Call it for what it is, this incredibly stupid and arrogant legal tactical blunder might well cost LM their entire company. Yes, I said it, and the facts currently registered with the court support it, DAVID IS ABOUT TO SLAY GOLIATH. I am not sure why the risk management folks at Fidelity and Morgan Stanley and the other major LM investors refuse to do their own research and due diligence, but I think that the arrogance by those investment firms will cost them each tens of millions in the future in shareholder lawsuits due to their unwillingness to accurately report what they already know. This suit by WITS Basin is no "nuisance suit" . If it was, LM would not have already spent millions with their now ....third attorney, Dorsey in a failed effort to derail this counter suit by WITS for what can and will be BILLIONS in damages. Read the facts... LM better settle quick or lose it ALL
wits has a 50% interest in the china mine. based on previous mining and lower pricing, when the mine was operating before their numbers would have been around $20 million income. At 10 x that would be a dollar a share. Given the higher ore pricing and the concept that the two other mines can be bought, you are well over a dollar a share. Why mess iwth Bates, if were me i would focus on the law suit and China.
Also, in looking over the pleadings there is this issue of Wits entering a second JV with LM, for a Chile mine. After LM signed a JV with Wits, it went around Wits back and bought the mine without them.
The behavior of LM is a course of conduct that is really very actionable in courts of law here in the US. Very danerous for LM, very good for Wits.
Also, have you seen that one of the Law firms and Franklin Levy
Take a look at this guy, would he be involved if he did not see big dollars here.
The situation with Wits seems pretty clear. The LM folks have played hard ball. they have marked the value of the mine to zero. Why, so there was no value to negotiate with for Wits. If they left it at a value and they by their auditors had to mark it to market they would have had to book perhaps billions for their half and thou so woudl Wits. With a zero mark, what is it worth. It seems to me that in the worse case wits owns 50% of this and an accounting on the profits taken since the mine reopened. They still legally own 50%. LM i beleive that they felt that they could force Wits out, by freezing them out of money, bringing expensive law suits that Wits could not afford, and get out of town for nothing or cheap. they don't understand American court system. First, their arrogance allowed them to bring a suit in the US, giving the US courts jurisdiction. Second, by being in the US they Wits was able to get law firms to work on contingent fees, which then neutralized the money advantage. Latesly, they have an unsympothic court system here, against foriegn companies who behave this way against American companies. This is not a very good position to be in. but lets look at this further. Wits has about a $10 million market cap. They own a mine which it becomes more evident every day is very valuable, why would there be so much fighting if it was not. they legally own half of the mine. They legally own half the proceeds of the money being made at the mine. So all things being equal and they ownly get what they are entitled to by contract, that which they already own, the company would have an asset and income on a 2 plus billion dollar asset. Operating and producing. The stock value of Wits would rise to $1 plus billion and perhaps a lot more. That is a 100 times increase of where it is now. Of course this may be very low, because i bleive that the mine is worth a lot more than this. That the courts will be hammering LM, that someone at LM will wake up to the dangers that this suit represents. That the attorneys are on Contingent fee and that they are in for the duration of this case. That LM could lose $650 million plus, and perhaps more if there are punitive damages. That wits could wind up with a lot more. Or that LM wakes up and settles this matter before they get slammed. All of this is possilbe.
What happens next is that at some point LM has to answer the petition filed on Friday. I would think this week. This answer will be telling. I predict it will be a very weak attempt to shift blame. I think they will be hard pressed to come up with a legal challenge to Wits ownership and try to go to behavior or someother none relative thing. I think we will be getting a good laugh and comfort this week. I think this will not be a good week for Wits, and for us watchers, we may get a couple of good laughs this week.
bottom line, i see little down side, huge upside, adn new players coming in as the reality of this deal sets in.
Who knows, no one can predict the future, but the numbers speak for themselves.
remember guys we need more than half the mine. Lu and Zi still have to be paid. The mine needs operating cash which is why LM was brought in. I think we still need to buy the other two properties "SAN" and "GUA"....however they are spelled.
Wits is broke and will owe the lawyers a boatload so we might have to call in the
$100m investor we were told they had. Is there still an agreement with Lu?
I believe that the case against LM has real merit. I think the mine is probably worth Billions. LM wrote it off, that way they don’t have to negotiate a value, if they state a value in the mine and have to mark to market then they have to value Wits half at this value. If they were trying to steal the mine, which it appears they were trying to do, this would not be a good idea. If it were I, I would go for cash and the other half of the mine. Or go for the judgment. Then if Wits wines, LM would have to find $650 m, and jeopardize all their other holdings.
The whole deal is based on Stupidity, Greed and Arrogance. The real problem for LM is that their attorneys will have a hard time catching up on this case. They will be behind the 8 ball. They have a good chance of getting slammed. Given the way this thing has gone it will be interesting to see LM’s response to the motion on Friday. I would bet they will give some off the wall response. It will get slammed. The Judge is going to be really angry. I think you go for the whole ball here, but if they offer a settlement, I would not take less than some big bucks and the other half of the mine.
Lets not forget that this case is edging very close to punitive damages. I don’t know the law in Minn. But this could be much bigger than the $650 m.
My bet is that this will get very ugly for LM and they will fight until some smart guy on the BD figures out how scary this is for LM. Then the real action will take place. How this winds up I don’t know, but my bet is that it will be an incredible win for Wits.
Personally, I see $1 plus and it could be a big plus. It will be happening fast now. We will hear a lot in the next 40-60 days. LM will be playing Russian roulette here; I would not be doing this. They don’t know the US court system. They are going to get slammed. But lets see the pleadings from LM this week, and I think we will have a lot to laugh about when we do.
I like your analysis! Especially the part about mark to market. Ed had posted an article on the IHUB board that talked about Benxi and LM. Hossie made some off handed remark about "thinking about buying WITM's half of the project". That totally makes sense in a nefarious sort of way. LM marks it to zero so WITM's half must be worthless too. Then wait for WITM to fold and pick back up with 100% of CGMR. Nice plan then when WITM wouldn't go away you use "other" means to try to accomplish the goal. Good to see we have a CEO that isn't backing down.
Thanks for posting witsstockjockey you have great insight. I also want to thank everyone else for their contributions on all the boards. Good to see a lot of the originals back and re-energized.
My feeling is that LM will have to exit China. By giving WITM the other 50% of a project they have written down to zero makes the best sense. To their shareholders it would look like a steal because the property may be worth $2 billion but you would have to operate it to realize the profits whereas if you had to pay cash to WITM for a settlement it would be a big immediate hit. I also see LM having to pay out millions ($50 million?) because WITM has to pay their lawyers . Like you said there is a good possibility of criminal charges too. If indeed LM is operating the mine in China don't they have to pay corporate taxes in England or at least mention it in their filings? You can get away with a lot of shenanigans but governments like their tax revenues. Also, it would be good to see WITM pursue CIC in civil as well as criminal court. Then we have the Chile' project that lawyers could pursue.
Lastly, I'm waiting for executives at LM to be stepping down between now and December. I'm sure it will be for "personal reasons".
HIgher..I agree. WITS was the original owner of the property, then struck a 50/50 jv with LM for $45m. Wits should have the upper hand in retaining the property and ultimatly that is worth more then $650m IMO. They had over a billion in iron ore stock piled according to the counterclaim.Either way Wits it set to benifit in a big way here i do believe.