That’s not quite right, he went a step further and bought puts for his position from a friend of his family who had no assets. So if it all went against him, he was going to put the liability to that guy, who clearly would have simply declared bankruptcy.

Regarding his lack of obligation to other shareholders, I was more referring to the fact he said his transaction was good for him and other unitholders, as if that outcome was planned, not whether he was legally required to do so.

Here is Bolton’s quote “It was a commercial transaction, intended for commercial gain, for unit holders and for myself.”

On the issue of MBank suing for unitholders to fulfill their obligations, presumably all unitholders will either make their payments to maintain their shares, or they will freely relinquish their units to MBank to quash their financial obligations. Granted MBank will probably become BC’s majority shareholder and by default the voting owner.

I assume MBank didn’t accept ASI’s unit shares and attached liability since they had legally been stripped of their sole remaining value (the voting rights), this point wasn’t specified in the story. In such case, MBank through BC, should be suing ASI and ASH to return the $4.5 m dollars.

He wasn’t a fiduciary, so he’s not obliged to consider the other shareholders. He bought 19.9% and was voting to make himself as much money as possible. Revlon duties don’t attach to shareholders.

You are probably right that if Macquarie (sp?) decided to demand payment from all of the unitholders, this might have ended badly. Specifically, if Mbank sued every unitholder to enforce the future payments, won, and filed involuntary petitions for bankruptcy against every single unitholder (after unsuccessfully attempting to levy the judgment against their assets) this would have been bad for the protagonist. They could have recovered the 4.5m as a fraudulent transfer, in the manner you suggest.

I’m not sure how expensive lawyers in Australia are, but in the states, this would be a laughably bad economic proposition. Plus, it would probably wind up with the road company filing for bankruptcy itself while they waited on their manifold lawsuits to come to fruition so they could pay their bills. And, since you know that this whole thing is basically a way for politicians to build roads, you know it’s not going to come out this way–the politicians will bail it all out.

Did Macquarie Bank buy ASI’s liabilites also (minus the already sold voting rights on those assets)? If they didn’t, and ASI still owes BC $120 m on stapled unit liabilities, then all Bolton did was buy an asset, strip and sell its value, then leave the remaining liability in a shell company. I believe this would be illegal in the US, and BC could drive ASI into bankruptcy. The bankruptcy judge would then possibly be able to encumber the $4.5 m profit of Bolton in ASH.

This seems less like good strategery, than possibly some dumb good luck on Bolton’s part. Or do I misunderstand something?