But let me move to a little analysis of these things and the questions that they raise. And reveal some rather disturbing truths about the value of these assets to begin with.
First - Somewhat like I always supposed, the land and mineral assets were mostly just swapped for stock. Except note that some number of these properties, notably all the assets in Lincoln County came to MTEI from Mountain Resources. I am unclear how this transaction actually took place. There must have been a transaction with Tow and his interests grant the rights to these assets to Mountain Resources, then a transaction from Mountain Resources to MTEI. I would bet $'s to donuts that this was probably done exactingly and that shares of MTEI passed directly to TOW instead of actually being traded for shares of Mountain Resources and then Mountain Resources swapping its shares with MTEI shares. Not a big deal, but likely a detail short circuited.
Second the actual land acreage is a woeful 24 acres. The rest save the 63 acres bearing a royalty of 1/6, were various mineral rights. Some just the minerals, others just the coal only (forget the diamonds), 2 properties were only a 50% interest in the coal rights and still others were oil and gas rights only. In short, a real hodge podge and drawing into serious question the intent to ever exploit these rights. Of course we already have our answer as to their intent, but just looking at the property mix is rather difficult to discern any plan to systematically exploit.
Third and most serious of all, is it appears to me that the title that was passed to MTEI was neither land or mineral rights or Royalty rights as has been supposed. These transfers of title that are registered in the various counties on all these assets are their tax lien certificates. It is not the properties themselves. These things are a world unto themselves. To actually get title to the assets securing these Tax Lien Certificates, you have to foreclose on the asset. If it were to have turned out for instance that Jack and the boys had stubbed their toes on some actual commercially exploitable resources, the title holder of the asset could pay off the lien and would retain full enjoyment of the property or mineral right.
To read more about Tax Lien Certificates here is some information that some may find interesting:
resusa.net
Investing In Tax Lien Certificates
How? By Investing In Tax Lien Certificates.
What exactly are tax lien certificates and tax lien certificate sales? In some 32 states, conducting tax lien certificate sales and issuing tax lien certificates is the method by which local government collects its delinquent real property taxes.
For instance, if an owner of real estate doesn't pay his or her real property taxes (together with any interest, penalties and charges currently due), then the county treasurer will sell the right to collect those sums to investors at a public oral bid auction sale, a so-called tax lien (or tax certificate) sale. The property is not sold; only the right to collect the delinquent taxes is sold. That right, evidenced by a document termed a tax certificate (or tax lien certificate), is secured by the so-called real property tax lien. Hence the term "tax lien sale."
http://resusa.net/articles/beck_percent.htm
So basically, I believe that the only assets that MTEI had were these Tax Lien Certificates from Marc R. Tow. I have found several references to Tow being involved with these activities on the web. I am sure he knows exactly how much these are worth - not much. He parlayed these things by trading them for stock, thereby securitizing them for tradeable paper. Jack was only too happy to help as he had his own thing going it seems. MTEI made a press release touting the value of the rather generously estimated natural reserves and figured a book value on that basis. Instant wealth creation. Except the wealth that was created, I believe, was only for those in the know. Unfortunately that wealth came from the shareholders that they sold their shares to. |
