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Hey, it worked in the past, right? Much like politicians...be happy with your crumbs we gave you and maybe in 4 years we will give you another crumb.
That explains the loss for the year at least some of it. So by that logic, do all lawsuits against the company basically result in a two for one hit to the net asset value of IV? First all the legal fees defending and second the actual damages paid? All the while collecting fat management fees...
At this point I think it's more about keeping the scam going and collecting as much fees as possible until they can't.
Are they still spending UDF funds on legal fees? I'm hoping 2023 will not have ridiculous G&A expense.
Curious has anyone checked what the latest pricing is on the secondary market? Last I checked you were lucky to get $2. Curious if audit changed things for the good or bad.
Yes. Also couldn't remember all the other lame excuses they gave : )
Those are holding up the audits I hear...along with the overly complex nature of the business...these things take time.
Strangest set of facts/circumstances I have ever seen. These dudes are in jail and yet there has to be a fight to get any accountability.
Step in right direction. I've learned that these things don't always go the way you think so being cautious. Hopefully a reasonable judge.
Definitely a good legal strategy. Increasing changes of getting some payout. Maybe trustees have better insurance.
Feels like this is priced for worst case scenario. I'm hoping they put the recently raised $73 million to good use since last quarter. My guess is we may see more impairments around the Mass operations.
Maybe those brains in the slammer may be a good thing going forward.
One of my close friends involved in the workout/bankruptcy law field told me he is seeing an uptick in developer failures. Good for his business, no bueno for lenders.
Hopefully a good thing!
For now I guess it is a favorable tax treatment, but will hit you when you sell. I have a feeling this will not allow for a favorable "sell" for a long time.
I agree. The only way to get a fair price for this is have audited statements completed. Secondary market would likely give us a price that is not unreasonable. Unfortunately, a big reputable firm is likely going to pass. There will always be skepticism regarding the accounting around UDFIV unless they are held accountable. Let's see how the litigation goes. Its our only hope at this point.
Litigation is "the" only hope here, which is being pursued thankfully. If I were in charge, which I would only agree to do with all sorts of caveats, I would be pushing full transparency, flushing the bad actors actions with some announcement admitting their actions were wrong and transitioning to a new beginning. Really need an "independent" board to step up, negotiate with Nexpoint like honorable people. I'm not seeing that here, at least at this point. Feels like our criminals are pulling strings from jail house. Still in some form of cover up mode, reminds me of how big pharma never admits they are wrong, unless called to the mat in court. Pray for honest judge and jury.
If it were me running the show, I would be very conservative on the first disclosed financial statement assumptions. Also, I would get some input from audit group.
I will be curious if the disclosure moves the needle at all regarding secondary market pricing. I haven't checked lately as it basically went to ~$2 right after the indictment. Curious is anyone has checked lately.
That makes sense.
I wonder how much of the loan loss was true write down versus interest restructure?
OK I think I agree with these comments. I'm a valuation guy. My spidey sense says maybe take a 50% discount on the NAV. The current environment isn't exactly good for developers going forward.
Good to know regarding auditor. At the same time, I don't think they have a choice in the matter. No doubt they signed all sorts of indemnification clauses in the contract. No big firm would touch this. My question remains...what is this worth? Nexpoint obviously thinks a good deal more than $1.10.
I'm hoping the litigation is pursued aggressively.
Other interesting tid bits.
Booked $36 million loan loss in 2021 and $29 million general and admin fee which caused the $43 million loss. Actually glad they recognized some loan losses here. I am thinking G&A should be under $10 million going forward. Legal fees I'm sure factored in.
At least this is something. Secondary pricing might start normalizing now and towards the 22 audit date.
UDFI IV communication to investors on company website now. Summary is historical financial statements presented through 12/31/2021. Working on audit of 22 financials. Current NAV = $11.33 (unaudited). Auditors were hired in July so my sense is there must have been some communications/input here.
Thanks for the pressure Nexpoint. Hopefully the real number is not $2.
What's the easiest way to follow court filings in the case?
Yes was thinking same thing. If there is not a way to get accountability in this situation the entire corporate shareholder law is F'd.
Keep hammering the press releases. Think it helps the cause. Instead of "mom and pop" investors can we say "sophisticated mom & pop" investors?
Has anyone called investor services lately?
Brutal. I do feel bad for his family. i would feel differently if he admitted his guilt which would allow everyone to move on.
Any news on the letter? Will we ever see more than .065 a quarter from this?
NexPoint drops lawsuit on Hollis et. al. and entities. Lots of good stuff in the complaint
https://udfexposed.com/assets/content/NexPoint-Original-Petition-v-UDF-IV-Advisor-and-Affiliates.pdf
They allege a lot of fraudulent transactions were completed (primarily using cash from UDF IV) used to cover dividends of other funds, personal legal expenses, SEC setllements, etc. Also management fees paid based on invalid equity value. Hopefully there is some insurance money somewhere that the entities or individuals hold.
Pretty funny. I'm sure he is in a "white collar crime" facility. It's hard to believe it has come to this.
Hope the execs enjoy their new housing. Anyone talk to the company recently?
Mostly crickets since dropping lawsuit. Any news on UDFs response to Nexpoint letter? With the market tanking, this investment just got alot more important.
If this was fraud, I would think it should not come from company coffers if it turns out they are entitled to legal fees. I'm guessing that number is very high.
Good news. Step #1 of getting this on the right path. Now will they admit they wasted all that money?
One of the traits of people that commit fraud is their refusal to admit wrongdoing even when presented damning facts. The perpetrators usually double and triple down in the face of overwhelming evidence. Some form of psychosis. Seems to fit the fact pattern here.
Hopefully new management team has some sense and aren't being manipulated from the jail cell. There is no excuse not to have audit if you are a legit business.
Basically public company run like "family business". Excess cash syphoned off in form of excess comp, management fees, personal legal. Surprised no boat or vacation property.
Starting to look like that's a distinct possibility.
Now that the executives are in jail, Is there any excuse left that the company or Board could use that would preclude them from getting an audit completed? After spending millions on legal fees, I don't think the extra fees excuse will fly at this point.
I tend to agree that hiding your financial position is not a good look when defending an alleged short and distort scheme. Wouldn't the financial statements be looked into as part of the legal discovery anyway?
I agree with the likely impairment. But even if it is massively impaired, $5 - $7 per share may not be crazy. Need an audit. I'm not sure if there is anything precluding getting an audit done at this point, other than Godfather scenario dictating from prison yard.