749 replies to this topic

[Mike K.]

Those are just the creditors, though. The local tech firms are not listed as creditors. 

[VIResident]

why wait when we have this list:

 

https://documentcent...f Creditors.pdf

 

but yes the first creditors meeting is tomorrow.  more details then.

 

Note:  Breathtaking Creditor Claim, List B Secured Creditors Gustavson Capital  https://www.gustavsoncapital.com/

$35,575,000.00 

Edited by VIResident, 06 May 2020 - 07:44 AM.

[Mike K.]

Gustavson is also the sole secured creditor.

[rjag]

Do you deny that a business that does not pay dues gets penalized by BBB?

 

Yes, thats a ridiculous statement to make. Paying members are vetted and then become accredited. That vetting includes business licenses, wcb confirmation no recent prior unresolved concerns etc...

 

Dont be so closed minded, its a non-profit consumer rights group. Your ignorance is hilarious

[VIResident]

List 'A' Unsecured creditors, breathtaking $28,757,243 Andreas Eberhard Wrede 

 

Sad for all affected adversely, small and large dollar value. 

Edited by VIResident, 06 May 2020 - 08:14 AM.

[Mike K.]

I wouldn't be too concerned about the BBB's image. Most people will recognize that in order to be a member in good standing, you also need to be accepting of being held to a higher standard.

 

You also need to take into consideration that disputes are usually handled quickly by a business and resolved amicably. Very few escalate to a point where BBB even needs to get involved.

[spanky123]

Those are just the creditors, though. The local tech firms are not listed as creditors. 

 

The local tech firms appear to have had money with Encorefx. We don't know yet whether they are owed money or owe money.

 

I see that the monitor has an offer to buy the Canadian business of Encorefx for $100K plus a small earn-out. Book value was $110M. The buyer will re-hire 70 employees in Canada. The monitor tried to seal the name of the buyer but then printed the signatories name at the end of the document. Buyer appears to be Elavon based out of Ireland.

 

The buyer is acquiring the $70M in debt. The debtors will likely get a call.

Edited by spanky123, 06 May 2020 - 02:31 PM.

[spanky123]

I wonder if Peter G. will make an offer to buy the business back for $200K?!

 

I have no idea so this is just speculation. A typical hedge for a local tech company on currency exchange would be to protect against an increase in the value of the Canadian dollar if they have contracts outstanding that would pay them in USD. That would mean that the hedging contract would be out of the money if the Canadian dollar dropped sharply as it did in March.

Edited by spanky123, 06 May 2020 - 07:27 PM.

[Rob Randall]

That would mean that the hedging contract would be out of the money if the Canadian dollar dropped sharply as it did in March.

 

I just don't understand how the business could be that fragile. It's not like our dollar is in uncharted territory. The dollar is exactly where it was in 2003. 

 

From the EncoreFX website:

 

Currency market volatility has been increasing over the years, with greater market swings occurring over shorter periods of time.

Older methods of dealing with foreign exchange and its volatility are becoming ineffective and obsolete.

A modern and effective risk management strategy can not only help mitigate the risk but also move a business from being reactive to proactive, turning risk into opportunity.

 

 

I assume EncoreFX granted credit to a bunch of companies hoping that it was impossible they'd all default at the same time as if the dotcom crash never happened. I thought the whole purpose of having an old man running a company was that they bring their experience to the table. This seems like a mistake a bunch of high school kids would make.

[Mike K.]

I wonder if Peter G. will make an offer to buy the business back for $200K?!

I have no idea so this is just speculation. A typical hedge for a local tech company on currency exchange would be to protect against an increase in the value of the Canadian dollar if they have contracts outstanding that would pay them in USD. That would mean that the hedging contract would be out of the money if the Canadian dollar dropped sharply as it did in March.

Wouldn’t a falling CAD boost the profit of a company earning USD? If the CAD suddenly rose in value and your contract was priced with it being at 1.25CAD, and at 1.17CAD you’re losing money, you’d think the opposite scenario would be pleasantly advantageous.

So I wonder, did Encore engage in FX trading and act as a trading platform/broker for local companies? If so, a sudden shift in value, depending on the trade, could yield a massive loss if a currency moved several cents over the span of a day or two.

[Rob Randall]

So I wonder, did Encore engage in FX trading and act as a trading platform/broker for local companies? If so, a sudden shift in value, depending on the trade, could yield a massive loss if a currency moved several cents over the span of a day or two.

 

Maybe, I don't know. But look at this chart of the US dollar vs. the Loonie:

 

 

So the veteran business genius got himself over-leveraged just because he wanted to re-live his old Custom House glory days by getting the old gang back together. And he hinged it all on this record-length red-hot economy lasting indefinitely?

 

Do I have that about right?

Edited by Rob Randall, 07 May 2020 - 05:52 AM.

[Mike K.]

Not sure what to look for in that chart.

[Rob Randall]

I'm not an economist but you can see that while the Loonie took a hit this spring that's nothing compared to past volatility since the dotcom bust. I'm not sure what other chart to use that shows the recent volatility in the exchange market. I assume US v Canada was their biggest customer.

Edited by Rob Randall, 07 May 2020 - 06:01 AM.

[Mike K.]

Oh, I see what you mean.

[Rob Randall]

And I understand exchange broker clients are not gamblers; they're not like day traders flipping oil futures. Exchange clients can be mom and pop retail stores that need to buy US cash to get inventory for their shelves.

[Victoria Watcher]

EXCLUSIVE: Victoria Company Accused of Circulating Scam Software

In US class-action, ParetoLogic alleged to have circulated programs that would charge customers to fix non-existent computer programs

 

A Victoria-based software company faces a class action lawsuit in the U.S. over allegations one of its programs would fraudulently claim there were issues with someone’s computer, only to push them to buy services that they didn’t need. 

 

ParetoLogic Inc. — which operated as Speedy PC Software — was co-founded by the same partners behind another Victoria tech company, RevenueWire, that last week settled fraud charges with the U.S. Federal Trade Commission for US$6.7 million.

 

Plaintiff Archie Beaton's motion to certify a class for his complaint against ParetoLogic was granted in October 2017, and was upheld at the U.S. Court of Appeals for the Seventh Circuit in Chicago in October 2018.

 

https://www.capnews....ia-class-action

Edited by Victoria Watcher, 07 May 2020 - 06:08 AM.

[Mike K.]

The thing is, we don’t know what was actually going on, whether they were trading currencies, or betting that the USD would go down in value and hedging their bets with USD earnings from clients.

Currency trading is very different compared to stock trading. It’s a beast I dabbled in but it’s very risky as its exposure is global and 24 hours a day. Lots of houses won’t even let you hold a position over the weekend without fees.

If whatever these guys were doing was like shorting, then they could be severely in the red with a sudden move like we saw in March. There’s no bottom loss, effectively, and you could be heaps of money in the red without warning if the commodity turns against you.

[Rob Randall]

Oh my! This is a severe warning to Pareto/RevenueWire/SafeCart that if any more of these critical articles appear there is a very serious and real chance that they may, possibly be at risk to losing their 2020 Viatec "Company of the Year" award.

 

But not really because the trophy's already been engraved.

[Mike K.]

Hold on. Didn’t we already know about Pareto’s scam software?

[Mike K.]

ParetoLogic made multiple attempts to have the case dismissed, arguing the U.S. jurisdiction was inappropriate and that Beaton’s felony conviction for manslaughter some three decades ago should make him ineligible from being a class action representative. The court rejected those arguments.

“Beaton’s felony manslaughter conviction stems from conduct occurring over 30 years ago, and in any event does not bear any relation to this case,” wrote Wood. “There is no bar on felons being class representatives.”

Through their legal counsel, ParetoLogic denied the allegations in the class action.

“This software was reviewed and rated highly by numerous independent reputable sources,” he added. “This lawsuit is frivolous and filed against only SpeedyPC and is brought by only one individual, who happens to be a convicted felon. ParetoLogic is proud of the 17 years of service it provided to its customers.”

Wow.