CC Voting - What Happened. More Detail As Requested

Elgee, rugrat, anrigaut, nixi etc...
I was hoping that we would not have to go down this route of so much disclosure over voting, but your various emotional (and at times) personal postings are leaving me with little option.
For the record, I did contact sleeplessnessnight yesterday from the DST and suggested we put up a joint posting to try and prevent this debate spinning out of control, but for various reasons (which I am sympathetic to) my suggestion was not taken up. Anyway, here is the detail, and I’m afraid it won’t reflect well on the DST, but you keep on pushing for this.
We (the HNW) spent a lot time in the weeks prior to the first meeting of creditors thinking through the possible outcomes of this CC vote. We judged this to be very important – this is a Committee which will be in place for many years. It needs to contain the right people. From the conversations I had with DST members in the run up to this meeting, it was very apparent that they were not thinking this through in anything like the detail which we were. In fact David Greene, DST lawyer, confirmed this to me in a telephone conversation – “they are all focused on the CL.... etc.”
As stated elsewhere, our aim was to achieve a 2/2/2/1 Committee (2 DST, 2 HNW, 2 insurer, 1 trade creditor).
DST refused to accept our two offers of mutual support (the block resolution of 4, despite agreeing to put their own candidate, Stuart Roberts, on the resolution) and the deal we put together with the insurers to guarantee a 2/2/2/1 Committee on the day. I have provided you with elgee’s (very last minute, 4 minutes after the meeting started) reply rejecting this. Hence you have clear evidence that this deal was offered, and rejected. I attach this again below, as a pdf.
It is also worth noting that when HNW put together this 2/2/2/1 deal with the insurers, the insurers were keen to support the two HNW candidates (and we suggested to them that we should have no more than two – otherwise it would be unfair to others), but the insurers were very hesitant in supporting the DST nominations. Peter Wakeham and I spent a considerable amount of time convincing the insurers to support Simon Bessant and Stuart Roberts. Some of the insurers had met Stuart and liked him as an individual, and for Simon, Peter and I explained his background, his strengths and vouched for him personally. We were asked our view as to why DAG DST appeared to be so extreme in its behaviour in recent weeks. We did observe that both Simon and Stuart were both on overseas vacations at this time so were not involved, which in part helped gain the support of the insurers for the two of them.
Perhaps this helps some of you understand why we find it somewhat ironic that you are now critical of this deal. We were pushing for support for DST ! Yet you appear to be assuming that we were doing the opposite.
Nixi and others on the DST have claimed that they offered to support 1 HNW candidate. This is a blatant lie. PRODUCE THE EVIDENCE ! I have challenged Nixi to do this. The silence is deafening. There is no evidence to produce. No such offer was made to me or Peter Wakeham either in the days before or on the day of the vote. As I have mentioned elsewhere, we were in the same hotel as the DST folks, crossed paths & said hello in the bar etc.....no offer whatsoever.
Peter and I were very disappointed with this behaviour, and our only possible conclusion was that DST would vote for its own candidates and not those of the HNW. As I now understand it, having spoken to various DST members in recent days, DST wanted a 3/1/2/1 Committee (3 DST, 1 HNW, 2 insurer, 1 Manx retail). They thought they had put together an alternative deal with the insurers. They chose not to involve HNW in any of these discussions. Clearly the insurers thought otherwise, given how they voted (ie. NOT for any DST candidates).
From the spreadsheet work that we had done, and based on our understanding with the insurers, our expected outcome of voting was as follows.
By Number of Votes – in order – Roberts/Bessant/Marsella/Wakeham/Brake/AXA/Skandia/Lees/Boal/Smith/Murray
By Value of Votes – in order – AXA/Skandia/Brake/Wakeham/Lees/Boal/Smith/Roberts/Bessant/Marsella/Murray
Combined Overall Expected Outcome – in order – AXA/Wakeham/Brake/Skandia/Roberts/Bessant/Lees/Marsella/Boal/Smith/Murray
This would have generated the 2/2/2/1 Committee we & the insurers were aiming for. But no majorities – hence in the hands of the Deemster. All because DST refused to cooperate.
I have attached this as a PDF below for those of you who want to look further into this.
Then on the day, as we can now see, DST voted down the block resolution of 4 (which included Stuart Roberts and myself, surprising both us and the insurers), but then in the following vote of “7 from 11” voted among others, for Peter Wakeham of the HNW. In other words they used their vote to distinguish between Peter Wakeham and Gavin Brake/Nigel Smith of the HNW. DST also used its vote in favour of the insurers, but received nothing in return.
In this “7 of 11” vote HNW voted its proxy in accordance with our “fall back” agreement with the insurers (a plan which we really did not expect to have to put in place, and only did so because DST voted down the block resolution of 4). Part of this “fall back” agreement was that we voted for Michael Lees, part of it was that we voted for Boal. In return our three candidates received differing levels of support. Complicated isn’t it? Why “differing” – so we didn’t end up with three seats, because that would have been unfair. Yes – we thought about that. Despite DST voting against the block of 4 and rejecting the guaranteed 2/2/2/1 deal, we STILL voted to achieve the 2/2/2/1 committee which we (and the insurers) thought was the best outcome. Again, see the PDF below – you need to think through the maths here I’m afraid.
Funnily enough, in this “7 of 11” vote we also used our proxy to distinguish between the three DST candidates, though in a more subtle way. The reason Simon Bessant had 321 votes, Stuart Roberts 320 and Alex Marsella 318 is in part because we used a small part of our proxy vote and a few non-proxy votes which we had organised to achieve this at the meeting.
Elgee – I suggest you speak to Robert Coates about how we were able to do this. Robert and I were each given 4 or 5 voting forms for each vote – a paper nightmare. I recall the first was agreed general proxy votes, the second agreed special proxies, the third disputed generals, the fourth disputed specials, the fifth people who appeared to have applied to the dcs at the last minute but still were trying to vote ....etc. I was expecting at least two forms, but ended up with quite a few more for each vote. The important thing here though is that it allowed us to give small pieces of our vote to Simon Bessant and to Stuart Roberts. Hence the 321/320/318 situation.
So I could actually claim that the full HNW Proxy supported Stuart Roberts in the block resolution of 4, and a small piece of the HNW Proxy supported Simon Bessant in the “7 of 11” vote which followed. Based on our understanding of how DST would vote, I reiterate that this was the correct decision to make to achieve our objective of a 2/2/2/1 committee.
Isn’t a great shame that the DST refused to discuss with us their intentions or voting pattern? We offered a mutually beneficial, guaranteed 2/2/2/1 structure. We did not even get a reply to our offer until 11.04am on the day of the meeting, 4 minutes into the meeting. We offered a solution, we received nothing in return. No discussion, no alternative offer. Nothing.
As I stated upfront, I wanted to avoid having to disclose such detail, but since you folks appear to want to hold me/HNW responsible for the mess the DST created, you have left me with no option but to explain what happened.
This does not reflect well on DST. It appears that DST did not think through the possible outcomes of this vote in sufficient detail, or if it did, it got its sums wrong.
If I had given my proxy to the DST, I would want answers to the following questions,
1.Why did you agree to have your candidate, Stuart Roberts, on the block resolution of 4, then change your mind and vote against it on the day?
2.Why did you reject the guaranteed 2/2/2/1 offer put together by the HNW Group in agreement with the insurers? Why not accept two guaranteed seats rather than risk having no seats whatsoever? Or just one seat had Michael Lees not (luckily) withdrawn?
3.Why did DST fail to disclose to the HNW how it intended to vote? Why did DST not attempt to have at least a dialogue with HNW prior to the vote?
4.Why did DST vote for the insurers, but the insurers not vote for DST in return?
On a personal basis, I believe it was a great shame that Stuart Roberts and Simon Bessant were both on vacation overseas for the past few weeks. It would appear to me that the DST missed having their input at these critical times. Thinking back to the SOA vote, I believe Stuart and I worked well together despite our differences of opinion. On this occasion, with Stuart away on holiday, the communication with the DST was, at best, frustrating, and at times, non-existent.
It seems to me that DST’s questionable actions over this vote have resulted in the following situation. DST has taken a significant risk with its own representation on the CC. In return for what? Both insurers have certain places, as does one HNW (Peter Wakeham). All three achieved over 50% by value and number. So did Michael Lees. We could have ended up with a Committee of only 4. If the Deemster decides to extend this to 7, the next logical 3 would be Gavin Brake/Boal/Simon Bessant. So DST would have one candidate, possibly. It would appear that this is the result of DST’s (lack of) strategy towards the CC vote.
Luckily Michael Lees has withdrawn, a somewhat unexpected “get out of jail” card for the DST. This means Stuart Roberts goes up from 8th to 7th.
I am pleased about this last point – as I have repeatedly stated, I believe both Simon and Stuart will (hopefully, but now dependent on the Deemster) be excellent members of the CC, and I would hope along with Peter, myself and the other candidates.
One final thought to leave you with.
I have worked hard to put together two mutually beneficial deals for the DST – the first being the block resolution of 4, the second being the 2/2/2/1 guaranteed CC between HNW, the insurers and DST. May I remind you that Peter and I had to “push for DST” in putting together the latter.
You may think I am a sucker for punishment here, but as elgee and Nixi are fully aware (since they are as members of the DST) I have spent most of Thursday and Friday putting together a third mutually beneficial “deal” for HNW/DST with the insurers (in fact, it is twice as beneficial to the DST as it is to HNW). Once again I have had to “push for DST” here. No further details on this third mutually beneficial deal yet, but I hope for all of our sakes that I am third time lucky.
Gavin Brake