Please Consider This BRP with the Greatest Care!

You have 3-4 months to consider your position before taking action!

Proposed MTI Application for Business Rescue Plan (BRP)

Last night, on April 18, 2024, I attended a webinar chaired by Henry Honiball. The presentation was led by Advocate Carlo Viljoen, who detailed plans to file an application for a business rescue (BRP) under Section 131 of the South African Companies Act. During this meeting, it was explained that once this application is submitted to the Cape Town court, all actions by the liquidators would be stayed until the court hears the matter and delivers a judgment.

This timing is critical as Marks has a pending application for leave to appeal de Wet's Ponzi scheme judgment. The advocate stressed that the business rescue plan could potentially benefit MTI's net winners significantly, including its original founders who had previously withdrawn large sums.

Concerns and Implications of the Business Rescue Plan (BRP)

The session concluded with Henry Honiball allowing questions for Advocate Carlo Viljoen. My main concern raised was the need for a thorough examination of the proposed rescue plan to determine who benefits and how. It is vital for the net winners to commit firmly to reimbursing the newly rescued MTI to ensure equity among all stakeholders, including net losers and those who have not withdrawn any funds.

Legal Team's Initial Comments on Business Rescue Feasibility for MTI:

In light of recent discussions surrounding a potential business rescue plan for Mirror Trading International (MTI), our legal team has conducted a preliminary review based on the current legal framework and the specifics of MTI's situation. It is important to note that MTI has been officially declared a Ponzi scheme by Judge de Wet in her judgment. This declaration categorizes MTI's operations as illegal under South African law.

Given this classification, the prospects of successfully instituting a business rescue plan are significantly constrained. South African corporate legislation, particularly the Companies Act of 2008, is designed to facilitate the rescue of financially distressed but inherently lawful enterprises. The Act aims to preserve jobs, rehabilitate the company, and ensure a better outcome for creditors and stakeholders than liquidation would likely yield, provided the business is legally sound.

However, for MTI, which has been legally judged as engaging in fraudulent and illegal business practices, the scenario differs markedly. The principle that a business declared a Ponzi scheme—an illegal operation—cannot typically be subjected to a business rescue process is rooted in both legal and ethical grounds. The court system and regulatory framework focus on liquidating such entities and taking appropriate legal action against those responsible for the fraudulent activities, rather than attempting to preserve or continue their operations.

Unless the judgment declaring MTI a Ponzi scheme is successfully appealed and overturned, the likelihood of a business rescue plan being approved or deemed appropriate by the courts remains highly unlikely. This stance is aligned with the prevailing legal interpretations and the fundamental objective of protecting public interest and maintaining the integrity of the commercial landscape in South Africa.

Questions of Viability and Legal Complexities

A trading plan was mentioned as part of the business rescue, purported to enhance the situation for all involved. However, I remain sceptical about the existence of a reliable trading platform capable of rescuing the company from its current difficulties.

Additionally, the current actions of the liquidators, which appear to some as non-compliant with the law, necessitate a more in-depth legal review, particularly concerning alignment with previous court judgments and issues related to the prescription date.

Call to Action and Future Steps

Given the complexity and diverse interests involved, I advised securing copies of the application documents and the proposed business rescue plan (BRP) during the webinar. It is crucial to understand these documents thoroughly and seek robust legal opinions on the feasibility and fairness of the business rescue application. Before contemplating taking any action or giving support to this plan.

Investors and creditors have a 3-4 month window to decide whether to participate in this action. This period should be used to clarify potential legal strategies, possibly including initiating a test case to address how funds withdrawn by net winners and others are valued.

The danger is this BRP, is advantageous to the major players who withdrew Bitcoin from MTI or benefitted from MTI as net winners.  Therefore they, the net winners, will all be driving this as a solution. (No  doubt we will be vigorously attacked by them.)  The BRP delays the whole process, thereby increasing costs further and also seems fraught with difficulties and does not seem to have a chance of success.

Final Thoughts

While the business rescue plan (BRP) could provide a viable solution for net winners, it is imperative to scrutinize how it addresses the needs of all parties involved. A balanced approach ensures that all stakeholders, particularly the net losers, receive a fair and just resolution. Although I am not in agreement with how the liquidators are currently handling the MTI liquidation—to say the least, they are not acting in the interest of the creditors. All credence to Judge de Wet; her declaration and judgment were accurate, but the liquidators are leveraging the judgment in very questionable ways, ultimately undermining the reputation of the South African legal system.

Furthermore, I contend that you cannot implement a Business Rescue Plan (BRP) for an illegal business.

I want to concur with the suggestion that a few legal experts have raised. We need to trial a pilot test case to clarify the legal standing of Net Winners, Net Losers and Wholesale losers and above all clarify the asset exchange and reimbursement policy related to Bitcoin value to ensure that justice is served by the law, reflecting both the spirit and the letter of Judge de Wet's judgment.

Points that need to be considered;

Marks's pending application for leave to appeal? (This has already been denied once.. https://behindmlm.com/companies/mirror-trading-international/clynton-marks-denied-mti-was-illegal-ruling-appeal/)

Is Clynton Marks involved and or funding this BRP? It is significant that the players joined hands once before;  https://behindmlm.com/companies/mirror-trading-international/clynton-marks-denied-mti-was-illegal-ruling-appeal/

What is the actual date of the prescription?

Various aspects of actions by the liquidators do not align with the legal opinions we have privy to.

Getting an independent legal opinion evaluating if there is any chance of success for a BRP in terms of the MTI Liquidation Case. One of the major problems is that vast amounts of missing assets are still at bay, being held by Steinberg, Marks and the major net winners.

As per Advocate Carlo Viljoen, who presented the application for the BRP, confirmed that we all have about 3-4 months to clarify and carefully consider our way forward.

No one needs to take action now.  Getaquid and its team will evaluate the situation and schedule a webinar in the coming weeks with feedback from our legal team.

Here is a somewhat puristic view of the webinar and further clarification of points made by Advocate Viljoen; https://getaquid.com/mti-brp-examining-the-viability-of-mtis-business-rescue-plan-insights-and-legal-perspectives/

 



Legal Disclaimer: The information provided in this blog post is for general informational purposes only. All information on the site is provided in good faith, however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. The content of this post is not intended to be a substitute for professional legal advice. Always seek the advice of a qualified attorney with any questions you may have regarding a legal matter. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer, or company. This blog is intended to provoke thought and discussion about issues related to the MTI liquidation and is not a call to action or presentation of a finalized legal strategy.

10 Comments

Elzabé · 21/04/2024 at 6:56 pm

I think we are all aware of the fact that there are nett winners who are not in a financial position to repay what they withdrew. Where does that leave us nett losers?

    PfoJC · 22/04/2024 at 5:43 pm

    Thank you for raising an important issue. The complexities surrounding net winners who may now be financially unable to repay their withdrawals pose a significant challenge in the context of any recovery plan, including a business rescue or liquidation scenario. It’s crucial that the business rescue plan or any settlement negotiations consider this reality to ensure that solutions are both fair and feasible.

    For net losers, this situation highlights the need for a recovery strategy that prioritizes equitable distribution of available assets. One approach could be to structure repayments based on current financial capacity, ensuring that those who cannot afford to repay are not unduly burdened, while still making an effort to compensate those who lost out.

    In the meantime, it’s important for all affected parties to stay informed and involved in discussions about the recovery process. Legal and financial advisors should also be engaged to ensure that the recovery plan is implemented in a manner that is transparent, just, and adheres to the legal standards.

    We must advocate for a balanced approach that considers the hardships of all parties involved and seek solutions that mitigate further financial distress. This may involve more nuanced legal and financial frameworks to accommodate the varied situations of net winners and losers alike.

Gerrit Minnie · 21/04/2024 at 7:24 pm

Thank you to the team fighting for the nett losers and may those with the brain of a robber meat the creator of fairness and love,Amen!!

    PfoJC · 22/04/2024 at 5:44 pm

    Thank you for your encouraging words and for highlighting the spirit of fairness and compassion that guides our efforts. It’s deeply important to us that we advocate effectively for those who have faced losses, ensuring that justice is pursued diligently and ethically for all involved. We share your hope that all parties, regardless of their position, are treated with fairness and that outcomes reflect a balance of justice and compassion. Let’s continue to support each other through this process and strive for resolutions that bring peace and fairness to everyone impacted. Amen!

Jeff Abernathy · 21/04/2024 at 8:40 pm

Trade all Rand for gold immediately. The increase in proceeds is the only rescue plan to please everyone

    PfoJC · 22/04/2024 at 5:46 pm

    Thank you for sharing your thoughts on a potential strategy to stabilize and possibly increase the proceeds for creditors involved in the MTI case. Investing in gold or other commodities is an interesting idea given their potential for appreciation, especially in times of economic uncertainty.

    However, while converting funds into gold might seem like a straightforward solution, it’s important to consider the risks and practical challenges associated with commodity trading. Commodities markets can be highly volatile, and the timing of purchases and sales can significantly affect the outcomes. Moreover, such a strategy would need careful legal and financial scrutiny to ensure it aligns with the objectives of the business rescue plan and the legal frameworks governing these proceedings.

    We must ensure that any recovery or rescue plan adopted is not only designed to maximize returns in a fair manner but also complies with legal standards and considers the financial security of all creditors. Let’s continue this discussion and explore all viable options with the guidance of financial experts and legal advisors.

Jimmy · 22/04/2024 at 6:04 am

Hi There Chris. What other feasible plan does getaquid have in mind? In my opinion this is the first attempt at actually doing something positive that may even make this thing work. Imagine we can stop the vulture liquidators in their tracks and even sue them for wasteful expenditure of our BTC. Kindly enlighten on your proposed way forward?

    PfoJC · 22/04/2024 at 5:51 pm

    Hi there, thank you for your insightful comment and for recognizing the potential in the approaches being discussed. We share your concerns about the current trajectory of the liquidation process, which many feel has been less about fair recovery and more about a ‘gravy train’ for the liquidators at the expense of those who have already suffered significant losses.

    Your idea of challenging wasteful expenditures and possibly taking legal action against any irresponsible handling of the assets is a critical perspective that aligns with the need for accountability and transparency in this process.

    We are indeed exploring various feasible plans and strategies that could offer a more balanced and effective resolution to the MTI situation. Today, we’ve posted an in-depth analysis that discusses the legal insights and implications of the proposed Business Rescue Plan, as well as other potential avenues to address the community’s concerns.

    Please take a look at our latest post here for more details on our ongoing efforts and proposed way forward: Exploring the MTI Business Rescue Plan: Legal Insights and Implications.

    Your feedback and input are invaluable as they help us better understand the perspectives and needs of all stakeholders involved. We are working diligently to ensure that all voices are heard and that any action taken truly serves the best interests of the community. Thank you for staying engaged and for your support in these efforts.

Mauro · 23/04/2024 at 6:46 am

From this whole affair we understand only one thing, South Africa is not a serious country!! Fourth world…

    PfoJC · 24/04/2024 at 6:43 pm

    Understanding the MTI Case and South Africa’s Commitment to Justice

    We recognize that the experiences surrounding the collapse of Mirror Trading International (MTI) can lead to strong emotions and critical opinions about the systems in place. A recent comment on our blog expressed a sentiment that “from this whole affair, we understand only one thing, South Africa is not a serious country!! Fourth world…” This reflects a broader frustration that we think deserves attention and discussion.

    Addressing the Criticism

    It’s understandable that the developments in the MTI case could cast a shadow on perceptions of South Africa’s regulatory and judicial frameworks. When a Ponzi scheme of such a large scale comes to light, it indeed raises questions about oversight and enforcement of financial regulations.

    However, labeling a country as “not serious” or “fourth world” based on this incident alone does not do justice to the complexities involved or the efforts being made by various institutions to address such frauds. South Africa, like many countries, faces challenges in policing sophisticated financial crimes which are unfortunately a global phenomenon.

    Efforts Towards Improvement

    In response to MTI and similar cases, South African authorities, including the Financial Sector Conduct Authority (FSCA), have been actively working to strengthen regulations and enforcement. The legal proceedings, including the appointment of liquidators for MTI, demonstrate a serious effort to address the wrongdoings and to refine the systems that allowed such schemes to operate.

    Global Context

    It’s crucial to recognize that financial crimes are not unique to any one region; they occur worldwide. The key is how the regulatory and judicial systems respond to such challenges. South Africa’s ongoing reforms and actions against entities like MTI show a commitment to improving and holding those responsible accountable.

    Moving Forward

    At Getaquid, we believe in looking forward and finding solutions. Criticism of the systems that failed is a necessary step towards improvement. It provides the impetus for change. We encourage constructive dialogue on how things can be improved, both in South Africa and globally, to prevent such schemes in the future.

    In Conclusion

    While frustration and disappointment are valid, generalizations may not fully capture the efforts and complexities involved. We remain committed to helping individuals affected by such schemes, advocating for transparency, justice, and better regulatory frameworks.

    We invite further discussion and perspectives on this matter, as we believe through understanding and collective effort, we can strive for a better, more secure financial environment for all.

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