Topic: [GLBSE] BDK -- LIQUIDATING UNDER NEGATIVE EQUITY PROVISION -- (Read 21246 times)

As they say, hindsight is 20/20. This is the same Nefario who used to be a moderator here, but then left the forum in a huff over some schoolyard drama. Then when nobody else joined him at whatever backwater forum he picked, he kinda slunk back and proceeded to continue his horrible PR before suddenly pulling the plug on the GLBSE. This community has a sad record of picking people to hold up as having "standing in the community"

And good that you did, eh.

There's little at stake, so I will be paying straight off the list Nefario sends under the negative equity provision. Nobody needs to file a separate claim for BDK, just file a general claim with GLBSE on their website.

Hi! If i would like to sell my shares, how do i process ?

Regards
Robin

Clever solution. Done & thanks.

Actually Nefario did recently send out a mailing about Goat's assets, so who knows at this point.

You should put up an informational motion. That way all the shareholders can see the information. It could be just a link to the BDK.BND thread where you explain the change in events, but you should post something to the GLBSE.

It would be nice if you could use the GLBSE mail feature to send messages to holders of an asset, but I guess they have not implemented that functionality yet. Heck, even GLBSE does not use their own mail system, they just post things on this forum.

Thanks man, I appreciate the fact that you are doing everything you can. I hope some of those pay up soon and partially relieve you of this trouble.

I wouldn't have been able to sustain the interest rate given I only have one consistently-paying loan which is <100BTC. Everything else has been called to help repay CD-holders, who should now all be paid off. The vast majority of my BTC holdings are in default, now. I may've found a solution on my largest default, but I won't know whether it'll work for about a month. With BDK.BND, I've defaulted and will be paying back what's owed through dividends (I think this is the most fair solution at this point, and more quickly puts more BTC in the hands of those I've negatively affected with the default) at a rate I'm unsure of -- it depends when I'm repaid what I'm owed, or when I can grab enough USD to pay off the remaining debts (I've already put in ~$25k additional out-of-pocket to cover debts). I'm paying it off as I would a normal loan, with partial repayment amortizing my interest, which now compounds. Some info on that @ https://bitcointalksearch.org/topic/m.1238407 . I've requested GLBSE suspend trading of BDK.BND to prevent new buyers thinking there is still a .1BTC FV. Unfortunately, there is no way for me to communicate to all bond-holders through GLBSE, which is making this sloppier than I'd like.


With regards to the BDK offering and this thread, I was planning to pay out the consolation amount under the negative equity provision. However, on the off-chance I'm able to recover 85%+ FV on my largest default within the next month or so, may instead be paying out the normal "buyback" amount. It's all still up in the air, and I'm very sorry there is not yet a resolution. I have about as much information on my own operations as everyone else at this point... Lots of possibilities, good and bad, but nothing certain.

Can you ELI5 what is happening to BDK.BND? I received an odd dividend today and I can't decipher why by reading this thread. Thank you.

So.... Here is a short string of level-headed, professional posts I made this morning in Skype not long after rising from bed:

[5:05:46 AM] Ben Malec: Ah.... Okay. Finally coming out of denial. I'm totally fucked.
[5:05:59 AM] Ben Malec: Totally and utterly fucked.
[5:06:48 AM] Ben Malec: Completely, totally, utterly fucked.
[5:06:52 AM] Ben Malec: Fuck.

This was followed, not too long after, with:

[7:32:37 AM | Edited 7:32:55 AM] Ben Malec: Anyone selling coins? I need at least 525BTC, and may possibly need up to 1600BTC on top of that. Would be able to send USD either on the 13th or 14th. Would prefer to do instant shared branching transfer at a CU, but could also do PNC's version of instant p2p transfer. I'd want coins as soon as the amount posts into your account because I need to stop my bleeding from BTC loans pretty much right now before I go under.
[7:38:26 AM] Ben Malec: Oh. 14th is a Saturday. Friday or Monday, then.

Pfffffffffffffffffffffffffffffffffffffeeeeew. So, at this point, I'm definitely going to wind down, contrary to posts from short-lived enthusiasm I was feeling. I'm buying out the remaining three large CD-holders within a week - USD if they'll take it, or BTC if not - from personal funds. I have not defaulted, and interest is still accumulating.

BDK.BND will not be bought out within a week. I'll place large open-market bids on GLBSE (likely one around the middle of this month, and then one large order each month starting in January) until I have enough coins to do a contractual forced buyback. I'm thinking that may take as long as mid-2013 - but I'll still be paying out consistent weekly dividends until that time. BDK/IOU will be liquidated under the contract's "negative equity" provision within 90 days, with a forced buyback at .02BTC/share. BDK.BND will remain after liquidation, which I will pay for out-of-pocket. Most loans I have out (which haven't defaulted) are either being called, or not allowed to renew -- these funds will also be used to slowly buy back BDK.BND on the open market until I'm able to buy them all back in one shot.

I'm looking at 4-10am Eastern (all days of the week) as standard business hours. Weird hours, but that's most convenient for me. If it creates problems, I can easily change it. I plan on resuming operations on the coming Monday. Sheets are updated, but I still need to build up the courage to see where I stand after counting JRO & Pirate as defaults - and Pirate will probably be written off soon. I'm reconsidering what I want to do with remaining BDK bonds... no clue who owns them from GLBSE's side, of course, so there's not much a way to negotiate individually with them. There's someone out of their home country I think might hold the majority of remaining bonds, so I'll talk with them whenever I can track 'em.

Those of you "lucky" enough to be together with me in the new IOU contract may be pleased to know I talked to JRO 2-3 days ago on the phone. Sounds like they're working extremely hard, even if they are isolated in a safehouse. He gave 3-12 months as a time when he'd probably be drawing significant income... I expect repayment will be in something like 1-3 years unless Jered gets a favorable settlement with Dwolla and's feeling mighty generous. With that in mind, I've decided against writing the JRO debt off. However, it's necessary I inject more capital into IOU. Working capital starvation sucks. I have absolutely no interest in releasing more units of IOU - I don't think I could get what I got, and I *REALLY* dislike this offering, now. I think BDK.BND units are going to tie me to too-high rates post-Pirate, so I'm not interested in issuing more of those. I hate to do it after all the fear-mongering, but I think the only solution is to personally re-invest in IOU. I wouldn't be a dick enough to dilute IOU bonds' profit % with it... that doesn't make much sense, anyway, since IOU units don't directly represent equity. If someone stuck on-board with me is particularly enthusiastic, it would encourage me to invest more if a % of what I put in were being matched....

I contributed 40BTC back in from a loan I effectively gave myself to buy appliances while BTC was high a few weeks ago. I still have ~250BTC to go. Started repaying now that we're creeping back up. Always regret missing the highest peaks and lowest dips, but I can't really complain about that bet. Need to take a deep breath before putting more in. In my mind, I still get this feeling of having done 9 months work, massive headaches, stress put on family, long hours when I get obsessed with spreadsheets... and came out with nothing but loss... ultimately, though, I put in ~$15k, got a $3k ring, $2.5k in appliances, $3k in cash, all sorts of little things...It wasn't a total loss, anyway... Experience evens it out, maybe.... God - I have to stop letting my mind wander.

Anyway - some changes in spreadsheets. I'm not going to give monthly reports in this thread, anymore. If you want a monthly report, look at the damn sheet. I don't have employees to spend their time on reformatting redundant information, and it ain't worth mine. Individual monthly reports have been hidden on the public sheets, less those for the past three months -- I'm running out of room.

I don't plan on writing off Pirate's debt, yet. However, I'm converting the Hermes debt (currently accounted for as a security) into a JRO debt on the books... Both his and Pirate's debts will be accounted for as defaults. When/if I write one or both of them off, I'll probably express it over a relatively long period of time... something like one to two years.

Pfew... What else...? Oh yeah, I'm "re-launching" (still quietly accepting orders from a regular) P&P Exchange. Last month, I was hoping to get a good, symbiotic relationship with someone looking to mix coins (given "my" coins come from many different sources, including fresh), but that didn't end up working out quite as much as I wanted. I shot SteamGames an open partial purchase offer, but he never got back with me... disappointed by that. Not completely sure on ETA for IOUcoin.com - dev's working on other projects. I told the designers I can't take them on right now, thanked and apologized, said I'd probably come back by the end of the year... they were very polite about it. Any other news, any other news... IOU.Canopy is very unlikely to be launched at this point - I'm going to be stuck with Frontier's satellite service (switching from Hughesnet), which they're launching in November. My ability to use the Internet will be... probably about as equally limited as it is now until Frontier starts doing installations, and after, I'll probably get shitty service until they run DSL to the area in late 2013 to mid 2014. I kind of like the guy I'm talking to at Frontier... asked him for a job. Heh - I ask just about every executive or business owner I meet for a job, directly or indirectly. No follow-up on that, yet. Someday, someone might feel in the mood for asinine, informal applications out of left-field.

I'm re-considering standard business hours, but they'd have to be something insane to work with this Internet connection... or I'd have to find somewhere to drive to everyday. Think there might be a cafe in town... there are a couple truck-stop type places not too far. Wife could drop me off everyday and head back home so she has a vehicle to drive... though, one of those truck-stop-type places is a strip club........... >.> Mind's wandering again. Anyway, I'd have to re-load the laptop with my wallets. Not fond of the idea of doing business on a public network. I guess I'm probably not at much risk of security breaches at a small agricultural village diner, though, heh. Actually, probably a market here for PC repair at asinine rates.

Anyway - I think that's all the news I have for now. Pandora's cutting out more than playing, so usable Internet connection's coming to an end. I should have spreadsheets updated by end of day. Need to contact a depositor, too. May re-launch IOU operations as soon as tomorrow.

Trust's low across the board, and it's a terrible time for all this to happen in some ways. Just bought a property outright. I have enough left-over to still go a couple years with all the repairs needed, and covering $5-10k in a failed venture, but it's getting too close for comfort. I'm not too interested in re-capitalizing until I know I'm personally in a secure position, and for me, that means taking a steady job again for 2-3 years, and maybe doing this on the side. I'm not one of those people who come to people with an idea, no sweat-equity put in, and ask for $250,000 - fuck that, I like being able to sleep. One thing I definitely don't want is to operate with insignificant equity compared to liabilities like the majority of conventional banks. They usually are able to get away with this by having hundreds of thousands, or millions, of customers, where operational income/outgo can be reasonably estimated day-to-day (bailouts are probably pretty helpful, too). Someone could withdraw $500k from Huntington one day, and their operations would be only negligibly affected. The way Bitcoin lenders work is by being extremely meticulous in making sure loan repayments line up with deposits, and there are at least two back-up plans if the lendee of the depositor's money ends up disappearing. The way many of us operate - we merely guarantee a lendee's loan in many cases (maybe not most, though). All the risk's on us for a much, much smaller reward than depositors receive - BUT, there's been pretty severe competition, and Pirate's really fucked with the rates. If someone can personally guarantee 2%/wk and deposit almost all of it into Pirate, there's not really a place for me. It practically forced us to put money into Pirate because it's the only way to be competitive, and we did this in a very cannibalistic way. We should've just stuck with what we had, not taken on debt the way we did, turned money down, and operated either entirely on equity and the few depositors willing to take 1/10 the rate guaranteed PPTs offered. We didn't do that, though - we had gentlemen's agreements on the maximum rate we could offer on guaranteed deposits, but it wasn't enough, and once PPTs started popping up, those agreements pretty much went out the window, especially since many were operated by individuals outside the lending cartel.

It's not all bad, though. With Micon's shit-brush, Pirate defaulting, JRO defaulting, the asinine warning on the top of "long-term offer" threads (just sent theymos a long rant about that...), and the massive runs these have all colluded to create, Patrick's more-or-less out of the game. HK will probably wind down if Pirate doesn't repay, Imsa's possibly gone, Burt might be gone... The playing field's going to be pretty empty -- all these great people who ultimately should've overshadowed me - people who have been extremely generous to me in sharing lots of information on finance an innovation (and their coins when I've needed it!) -- many of them will be leaving, or are already leaving. I'll be less without them, and the economy on the whole will be less without them, but as far as business opportunity goes, it's a great time to really push forward (well, it would be if I had lots of spare cash to throw back in).

I happened to have been winding down operations and I believe I only have 3 outstanding fixed-term deposits. The rest are in BDK.BND, which people can't force me to give them face value for at any time of their choosing - and, if people sell that down on the open market, I win, anyway, by getting to buy back my debt very cheaply. So, I believe it was mostly only coincidental that I've been pretty-well protected in the current environment (even with all the horse-shit which's happened since June). There are still people willing to deposit money with me... but I'm not interested until I feel better about where I am financially.

Idunno. Sitting and waiting with BDK/IOU, for now. I put the designers for IOUCoin.com on hold, and that's close to being canned altogether after the dev's paid for "phase one." I have a house to fix up, and we just found a cat crying outside a few hours ago. Named her Rusty Joe.

ETA: And thanks everyone. I should've received way more shit than I did for pulling a "voluntary recall," I think. I appreciate the trust. I was pleasantly surprised by how many requests there were for BDK.BND over BTC payout.

Ditto.

Starbucks/Panera/McDonalds usually have free wifi and central a/c (which knocks out the allergens, for me at least).  Oh, and the caffeinated beverages are a plus.

And if you need a little motivation... Warren Buffet is well-known for saying "try to be fearful when others are greedy and greedy only when others are fearful"

That means now is the time to load up on deposits at super low you-know-they're-safe-cuz-I'm-Kluge rates and lend them out to the people who need liquidity at you're-a-bad-risk-cuz-you-bet-it-all-on-pirate rates.

Thanks for making those exchanges happen quickly for us. I really appreciate that.

Hope you feel better soon.

My guess would be Anon=Matthew

I believe every exchange has now been processed except this one:
500 BDK -> 62.5441BTC (BDK has been transferred in)

Waiting on deposit to register on GLBSE. Only two mistakes I'm aware of: sent someone 14BTC instead of 14 BDK.BND units, and sent someone BTC without the dividend adjustment (corrected this). If I made other mistakes, lemme know.

For now - this is official notice that I've written off the JRO debt (on the books -- he still owes the money, I just think it's unreasonable to expect repayment at this time), and after paying out BDK-holders, BDK is now experiencing negative equity. Remaining BDK units will close under the "negative equity" provision in 90 days from today if equity does not become positive by that time. At that point, I'll have all my loans called, will have sent in some cash to cover what else I owe, and then I'm disappearing for a few months to sulk. (well, actually, I have another venture to tend to, and I wouldn't mind spending time on the house)

In addition, the new contract went into effect today. All the changes, aside from dividends becoming a monthly event, are likely irrelevant since BDK/IOU is liquidating. Finally - I am burnt out, have hay fever, and have over-burdening burdens. I'm tired, whiny, and still have a ton of work to do on the house. Don't bother me with bullshit for a while. I don't care what it is, just know I'll probably be an asshole in response if it isn't good news. I haven't updated my public sheets in a week or two, and have no interest in doing so ATM. IOUCoin.com will still be launching eventually. I no longer know when, and I don't feel like talking about more bad news. - And god-damn does Hughesnet's service suck ass -- everything has to be so damned drawn-out. By the time my client broadcasts a transaction, two fucking blocks have been solved, and BitMinter - it only has 1GH/s of work.... It can't keep up. Who the fuck would charge $80/mo for that?! What's wrong with these people?! Ahhhhhhhhh! *kehpooooooo!*

Have I mentioned I'm heavily sedated and vertigo's been on-and-off the past couple days? Anyhoo, see y'all next Monday.

Exchanges are now being executed. This will take me an hour or few. I'll report back when I think I'm done. When I post my belief of being finished, feel free to give me lots of shit if I forgot or bungled your exchange, but please not prior -- stressful week.

Here're the additional exchanges I'm aware of being requested, without responding to everyone individually (new ones and changes in bold):

10 BDK -> 14 BDK.BND (BDK has been transferred in)
500 BDK -> 62.5BTC (BDK has been transferred in)
150 BDK -> 18.75BTC (BDK has been transferred in)
320 BDK -> 432 BDK.BND (BDK has been transferred in)
20 BDK -> 27 BDK.BND (BDK has been transferred in)
100 BDK -> 135 BDK.BND (BDK has been transferred in)
372 BDK -> 503 BDK.BND (BDK has been transferred in)
220 BDK -> 297 BDK.BND (BDK has been transferred in)
2036 BDK -> 2749 BDK.BND (BDK has been transferred in)
97 BDK -> 131 BDK.BND (BDK has been transferred in)
9 BDK -> 1.125BTC (BDK has been transferred in)
40 BDK -> 54 BDK.BND (BDK has been transferred in)

These exchanges will execute in ~1h from this post (processing is expected to take 1-3h). With these accounted for, my closing stats are currently as follows:

BDK outstanding: 10,000
BDK in my account: 6581
BDK units left to close: 3419