Following the calls in Second Life by the Midas Group to boycott Hope Capital and WSE for failure to pay on bonds, WSE today declared the Midas Group bankrupt.The full statement (below the fold) makes interesting reading in one paragraph saying "the reasons are not our concern" and in the next explaining why they think the bank went under. Nothing to do with late payments from their own bonds of course. The value of the various Midas Group bonds have been transfered to the WTF rescue scheme, straining it yet further.
[UPDATE: Midas Group have responded. Their response is also below the fold]
WSE Statement:
Midas Commons, CEO of Midas Bank yesterday informed the World Stock Exchange that the Midas Group of Companies are bankrupt.
The WSE accounts controlled by Midas Commons were locked while we reviewed the situation.
The cause of this bankruptcy is not our concern as the WSE is not responsible for the decisions and actions of Midas Group and its management. Midas Group and its management team are responsible for all the financial and operational decisions.
The WSE has believes that the Midas Group of Companies were Over-Leveraged and did not hold sufficient cash reserves to allow for the potential risks and impact of increased customer withdrawals, lower than expected earnings from investments along with regulatory and economic challenges.
The World Stock Exchange has now delisted the following Midas Group of companies to ensure that shareholders will have the best possible chance to earn a return on their investments through capital growth and dividends using the WSE Traders Fund:
Midas Group High Yield Bonds (MGB)
Midas Group Financials (MGF)
Midas Development Company (MDC)
Conversion rates:
OLD ---- NEW WTF SHARES
MGF 1 - 1
MDC 1 - 1
MGB 1 - 100
All shares in the above companies have been transferred to the WSE Traders Fund (WTF) which has a higher Net Asset Value per Share than the above companies had due to the removal of shares previously owned by Midas Commons.
The World Stock Exchange has requested that Midas Group provide the WSE with the most recent list of Midas Banking customer avatar names and balances so that the WSE can issue former Midas Bank customers with 1 share in WTF for every L$1 linden held in Midas Bank.
This will ensure that Midas Bank customers will have the best opportunity to minimise the loss and impact resulting from the bankruptcy of Midas Bank.
The WSE will post an announcement when it receives a response to its request for the former customer list of Midas Bank.
Midas Group announcement (via notecard from an ATM)
ON Nov. 2nd 2007 Hope Capital and the WSE, despite having an ample supply of lindens, blatantly withheld payment due on a 3.5 million linden dollar Hope Capital corporate bond issue that they had sold to Midas Bank this past summer(ticker HCB).
Midas Bank protested and in response a malicious and aggressive action was taken against Midas Bank by Hope Capital. In an act of brazen thievery and tyranny, Midas Bank's shareholders' stock on the WSE was dissolved, thousands and thousands of Lindens in a Midas Bank WSE account were confiscated, and any and all Midas Bank holdings on the WSE were liquidated, seized, or converted into a fuzzy and nearly worthless financial unit called the WTF.
After this, a false announcement was posted on the WSE that Midas Bank and all its Second Life financial businesses had suddenly gone bankrupt for mysterious reasons.
Hope Capital clearly wishes to destroy Midas Bank so they can cancel the roughly 5.5 million linden dollar debt that they owe Midas Bank. They owe this money fair and square with no strings attached. The bank is insolvent until this situation can be resolved. The avatar named LukeConnell Vandeverre is solely responsible for the decisions that created this event. He is the boss of the WSE (he calls himself the CEO) and it was he who sold the bonds (bad paper), he who decided not to pay what was promised and owed, and he who dissolved all Midas Group Financial assets on the WSE without consulting anyone about it first. He has no regard for any rules, regulations, or honor code. We need to all work together to resolve this situation promptly. The ATM is offline in the interim.
