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Midas Group bankrupt, says WSE 

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Written by Xavier Mohr   
Saturday, 03 November 2007

By Xavier Mohr, CEO

The World Stock Exchange (WSE) announced today the bankruptcy of Midas Group, an established Second Life financial power which included Midas Bank and a number of WSE-listed bonds and subsidiaries.

The WSE did not address allegations from CEO Midas Commons that the cause of this bankruptcy was primarily a failure by Hope Capital to provide a scheduled payment on the Hope Capital Bond Issue (WSE: HCB), simply stating that they felt the companies were over-leveraged with insufficient cash reserves.

Per the announcement:

Bankruptcy of Midas Group

Submitted by: World Stock Exchange (WSE)
Date: November 03, 2007

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:
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.

The WSE announcement comes one day after a heated meeting at Midas Bank headquarters saw Midas Commons and IntLibber Brautigan call for a boycott of the World Stock Exchange until the HCB bond payment issue could be resolved.

Midas bank is yet another Second Life bank failure this year, following the collapse of predacessors such as SmartVest Bank, AllenVest Financial, The Bank, and Ginko Financial.

Stay tuned to SLReports.net for more information.

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Arnaud Villota - Help me understand   | 2007-11-03 16:16:30
I do not understand why the announcement of the bankruptcy came from WSE and not Midas. Since WSE defaulted on their loan it appears to me that they are using their power to delist all of Midas's assets for their own good, not for the investor's good. Or am I missing something?

SLReports.net User - Hope Capital Bonds Information   | 2007-11-03 19:44:08
You can read the Hope Capital Report that explains the situation regarding Hope Capital Bonds which was released over 3 weeks ago.

Even if Hope Capital did make a bond interest payment rather than moving it forward, Midas Bank would have only received around L$600,000 which would be the only income for his net bank deposits of L$8m to L10m. This represents around 6% cash reserve, an extremely risky cash position for his bank and related companies.
SLReports.net User   | 2007-11-03 21:03:25
Someone wrote:
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.

To paraphrase Luke, we can't be held responsible if you are dumb enough to loan me money.
SLReports.net User   | 2007-11-03 21:16:49
Luke is nothing more then a thief always has been from day one
SLReports.net User   | 2007-11-04 03:39:51
Hope Capital Report URL: http://www.wselive.com/research/announcement_detail/2712
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Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved.

Last Updated ( Saturday, 03 November 2007 )
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