I HAVE WINDFALL SHARES IN B&B WHAT HAPPENS TO THEM?

What will happen to all the Mortgage Express Buy to Let Mortgage Holders will Mortgage express continue. If the Buy to let mortgage book is actively closed by uncompetitive rates it will probably cause a large number of buy to let properties being off loaded onto the Housing Market.

I have a Mortgage Express self-cert mortgage. What will happen to my mortgage now?

yes! have windfall and purchased recent shares at a cheap rate even though they were in trouble.. what happens? just wait for a few years?

waiting for reply to Alistairs question as I am in same position.

Similar situation to Alistair, Vanessa and G Thomson.

Surely there is a legal context here? As this website says, B&B weren't actually insolvent and their assets were worth more than their debts. Technically they weren't Bankrupt, despite a low share price and there is nothing to say that they wouldn't have recovered, however improbable that might seem.

I could understand the situation if B&B had actually gone Bankrupt and the Government had stepped in to pick up the pieces. That's a fair cop and it's the chance you take when you play the stock market. However, this is not what has happened in this case.

The point is that at the close of the LSE on Friday, my shares were still worth a significant amount of money, although overall they were worth less than what I had originally paid for them. So, how do I get compensated for the money I have lost over the weekend, when I had no opportunity to trade my shares and recover my losses?

In effect, the Government has taken shares off me which were worth a considerable some of money on Friday and not paid me the market value for them. They are now in the process of selling them off to someone else and are still not paying me for them. Isn't this theft?

I can't help but feel that the decisions over the weekend were more politically driven than financial.

Guys,

"As required under the terms of the Banking (Special Provisions) Act 2008, the Government will lay a compensation order detailing the arrangements for compensating shareholders and any others whose rights may have been affected by the transfer. We are currently unable to provide any further guidance".

This is the best situation you can hope for, surely? The shares had fallen more than 96% this year, and it could hardly fund its activities any longer, meaning it looked a cert to fail altogether. Short of a Lloyds/HBOS style deal, which I assume was not on the cards, if the Govt hadn't intervened the shares would have turned to dust anyway.

The one I feel sorry for is the lady in the green jacket and bowler hat. She's the first one out of a job ;)

"This is the best situation you can hope for, surely? The shares had fallen more than 96% this year, and it could hardly fund its activities any longer, meaning it looked a cert to fail altogether. Short of a Lloyds/HBOS style deal, which I assume was not on the cards, if the Govt hadn't intervened the shares would have turned to dust anyway."

Rubicon

That's just pure speculation and a matter of opinion. Decisions should be based on facts, not guess work, which is why we are all in this crazy situation in the first place.

The facts are that B&B was not insolvent and its assets were worth more than its debts. Added to the fact that it was one of most capitalised banks on the high street, due to the £400m rights issue only a couple of months ago. What the Government could have done, rather than Nationalise the Bank, is simply buy off its bad debt, just as the Japanese Government did back in 2002. That way, everyone would have been a winner, including the shareholders. In any given scenario of this sort, the taxpayer will always loose out but had the British Government followed the Japanese model, then their loss would have been minimised.

Despite all the speculation, B&B were solvent and their shares worth 20p each. For me personally, that was still a substantial sum of money. Had I known during Friday, what was going to happen at the weekend, then I would have at least had the opportunity to sell them and recover my losses but I was not afforded that opportunity. Not because B&B had gone Bankrupt but because the Government didn't want any more adverse front page publicity, like Northern Rock.

It was theft pure and simple.

I take your point about recent capitalisation due the rights issue. And people who took that up are going to be disappointed, certainly.

But when you mention asset balance, the issue wasn't about how much was on the balance sheet, but how quickly those assets were turning bad. Quote Jonathan Pierce, analyst at Credit Suisse:
We doubt any major bank will want exposure to a £40bn mortgage portfolio with arrears almost double the industry, and where over 40% of loans will be in negative equity if house prices fall 30% peak-to-trough, on our estimates

You think the taxpayer should just buy the bad bits while the shareholder keeps the good bits? Can't agree with you there. The sale to Santander will at least put something back in the Treasury to pay for your compensation. Which is why you're a bit underhand in calling it "theft" - you're going to be compensated, after all.

The only shareholders I do feel sympathy for are the 17,000 who voted to keep B&B mutual back in 2000. The majority, who wanted to profit from windfall shares, are no better off now than then.

There's no point trying to exchange views based on quotes from so called market experts, because there are as many views on either side and we could keep going that ad infinitum. Just check out some of the following websites:

business.timesonline.co.uk/.../article4856317.ece
www.financemarkets.co.uk/.../

www.yorkshirepost.co.uk/.../...d-shares.4544786.jp

www.myfinances.co.uk/.../bradford-bingley-shareholders-to-be-left-with-nothing-$1242705.htm
www.citywire.co.uk/.../content.aspx?ID=315646

Even in the quote you use to support your arguement, the words "if" and "our estimates" are used. Which was entirely my point. If every Bank is just nationalised by the Government on the whim of speculation, the whole concept of share ownership is flawed, therefore, so is a Free Market Economy.

With regard your statement on the Taxpayer, as I said, the Taxpayer gets the bad bits which ever scenrio is adopted. You think the Taxpayer will get any of the Santander sale? Not bloody likely and certainly not the shareholders. Northern Rock shareholders are still fighting for theirs and most agree that if/when it comes, it will be next to worthless. Likewise the B&B shareholders.

I think the term 'theft' is actually a polite way of putting it. Presumably, you'd be quite happy if a Government official just turned up without warning, drove away in your car without paying you for it, on the speculation that it might fail it's next MOT, sold it on to a dealer for a lot less than it was actually worth so that they could get it through the MOT and then many years later, after lots of legal wrangling, handed you a few paltry quid for your trouble.

The situation with B&B is no different. It was legally owned by the shareholders and they should have been consulted and agreed with, before any action was taken. The Government & the FSA have known about B&B's situation for ages and quite happily let a rights issue take place only a few months ago. Yet not once have the shareholders been consulted in the process.

Good points, good rebuttal. Thanks for the alternative quotes. There's definitely no one expert view. Btw, didn't realise how long it is estimated to take for compensation to be decided upon. How do you know it will be as paltry as you suspect? Is there any precendent?

I don't think that every bank should just be nationalised on the whim of speculation, no. However, you appear to be focusing all your ire on the Government, complaining of lack of consultation with shareholders -- whereas as far as I can see, it's B&B management that has let you down. We're discussing a company that:

* started a rights issue at 82p, then without warning sold a huge 23% stake to Texas Pacific Group at a cut price of 55p (not much consultation with shareholders there);

* throughout the crisis, conspicuously failed to read the writing on the wall. They not only bet wrong on B2L mortgages, but on top of that agreed to acquire a few billion of the most toxic mortgages lent out by fly-by-nights such as Kensington and GMAC, worsening an already high default rate. This makes the optimism for a recovery look tenuous when you consider that nearly everybody expects funding conditions to get tougher and defaults (aggravated by unsecured debts and inflation) to get worse.

I don't know as much about this as you do, particularly the Japanese example. But I would suggest your beef is primarily with B&B management rather than the government.

Well I suppose it depends on your definition of paltry. However, if the Northern Rock experience is anything to go by then B&B shareholders are unlikely to see anything more than 5p a share, if that and only after years of legal wrangling headaches. My point being that the shares were worth 20p each at the moment of nationalisation and whilst I personally accept the risks associated with share ownership and would therefore be content with a 20p a share compensation, I don't think other shareholders will feel the same. I'm sure they'd argue, that whilst 20p represented a low point in the B&B share price, longer term they could have recovered significantly, particularly if the Government had gone for a very different rescue package, but now we will never know will we!

Your points about the poor B&B management decisions are very valid and are, like many other Banks, the key reasons why we are in this mess in the first place. However, please remember that it is the shareholders who approve the election of B&B Board Members through a democratic process at the AGMs etc. You actually get a vote and a say so in who runs the company. Consequently, there had already been Board member changes in recent months as a result of the issue you raise, so I'm sure that a vote of no confidence would have been forthcoming if serious improvements were not evident over the coming months.

However, what the Government did with the support of the FSA, descends to new depths of corruption. There was absolutely nothing about it that was democratic, quite the opposite.

Interesting to note this week, that we are already seeing Governments' accepting the inevitable and making more funds available to the banking system, to cover bad debts. The alternative is too horrific to contemplate, unless you like queuing up at soup kitchens.

Bit too late for B&B though. If only the Government had waited another week to two. But I guess they new nothing about the imminent rescue packages, being put together by the US Government and others!