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My mother has recently approached me for some advice on some financial decisions that her and my father have made in the past few years. I looked around to see if there was another thread where my questions would fit in and didn't really see anything so if this is in the wrong place I'm sorry. So the story is basically this, my parents were approached by some family friends about 5 years ago about a business opportunity. A friend of their friends had found this engineer that claimed to have developed a plasma incinerator that could burn tires for fuel but somehow not produce any harmful byproducts. Every time people asked for explanations of how this could work the engineer said he didn't have his patent yet so he couldn't go in to any details due to the risk of losing his invention. According to my parents they went to many meetings where the plans for the company were discussed and it seemed as if within 5 years the first plants would be built and money would be rolling in. My parents invested an initial $100,000 and were approached again later to invest more money to help with some issues the company was having getting enough capital together to break ground on the first plant. In total my parents invest around $150,000 for 1% of the company and as far as I know have not received a single check or any earnings. Now, five years after the original deal, an investors meeting was held and they have talked up a new company to the investors and sent them home with a one page document where they have three options to sign off on. At first I thought the company was just a failed investment, that kind of thing happens, but this one page document is where I am starting to wonder about the legitimacy of the whole situation. The document looks to have been just typed up in word and printed off. The document isn't notarized or authenticated in any way and only has "hand wavy" wording about what the stockholder options are. First option is for those that want their money back. The paragraph explaining this option says they will endeavor to get the investors original investment back but no promises, no guarantees, and no documentation. It says this refunding may take a couple of years if it happens at all. The second option is where things start to get weird. The document refers to the original investment as a "donation" which even they put in quotes and says that you can choose to give up your original donation and buy in to the new company for 300 dollars a unit. The example they give is if you want to buy in for 1% or 100 units then this would require a "donation" of 30,000 dollars. They then say that profits are expected by the end of the year and that they project the new company will be as profitable as the first proposal was predicted to be. The third option makes even less sense. This time you again give up your "donation" and get to buy in to the new company for half the number of units that you originally owned at 10 dollars a unit. The example given here is that if you owned 1% or 100 units then you could give up your original donation and buy in to the new company with 50 units for 500 dollars a unit. Neither me or my parents know anything about investing of this type, we just know basic finance type stuff. I have no idea if my reason for concern is clear to more knowledgable individuals but basically I wonder what happened to the first company and why they would choose to just reform under another name with a new business. I also wonder why if my parents already own stock in the company that I'm assuming is being rebranded then why do they have to forfeit their original "donation"? Shouldn't they just own an equal percentage in the new company? The other thing that bothers me is how different the two new buy in options are. As far as I know a unit of stock is a unit of stock, so why in one scenario do you pay 300 dollars per unit and then in another scenario you pay 10 dollars per unit. The only difference is that profits are not promised to the third option within a year. It makes me wonder if the investments from people that take option three will be used to pay out some to the people that picked option two to keep them hooked in so that more money can be collected later. Could really use some help with this as it is causing considerably stress and fighting in my family. Also the original company was covered in the news a little bit and according to some sources was being given grants and funding by the government due to the green nature of the power produced. Here is a story about the town it was supposed to be built in and how they opposed it. The company was originally called PT power I think but in the new document it was referred to as BRED the first two letters I think stood for Blue Ridge which is where the company was based out of. http://www.electricityforum.com/news/jan05/Tireburnpower.html
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Sep 5, 2015 02:31
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| # ? May 5, 2024 12:20 |
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I'm not sure how long of a post I should make to make this clear but your parents got scammed and will never see a dime.
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Sep 5, 2015 02:42
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Classic scam. The real question should be how to approach this situation with the appropriate legal authorities. Your parents may never see a dime of their money, but they may be able to prevent these people from ruining more lives.
fruition fucked around with this message at 02:57 on Sep 5, 2015 |
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Sep 5, 2015 02:55
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fruition posted:Classic scam. The real question should be how to approach this situation with the appropriate legal authorities. Your parents may never see a dime of their money, but they may be able to prevent these people from ruining more lives. Yea me and my mom were pretty sure its a scam, convincing my dad is the hard part. Luckily for us the monetary loss isn't very crippling or anything. I just feel bad for the people that I'm sure invested a lot more than they should have hoping to make a bunch of money. Hopefully we can somehow expose this and prevent more loss like you said.
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Sep 5, 2015 03:52
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SteveRansom posted:Yea me and my mom were pretty sure its a scam, convincing my dad is the hard part. Luckily for us the monetary loss isn't very crippling or anything. I just feel bad for the people that I'm sure invested a lot more than they should have hoping to make a bunch of money. Hopefully we can somehow expose this and prevent more loss like you said. Yeah it's a huge hit to pride to admit you've been taken advantage of. You see it all the time with people involved in MLMs, when challenged, instead of coming to their senses, they double down and dump even more time and money in.
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Sep 5, 2015 06:30
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Anybody that suddenly switches "investment" to "donation" is a scammer.
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Sep 6, 2015 21:01
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lawyer up
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Sep 7, 2015 07:14
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I googled and I found multiple companies online that are saying they can burn tires for fuel, presenting a list of salable products, and offering "investment opportunities." Plasma technology and the ability to turn trash into fuel has existed for a long time. Not sure how the math works though - just sending trash to a landfill is like 35 bucks a ton. Plasma incineration costs $170 a ton even factoring in selling the fuel. Maybe it's more efficient when converting just used tires, but where are you going to get all the used tires?
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Sep 7, 2015 14:54
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| # ? May 5, 2024 12:20 |
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Family got taken for a ride and should look into suing. Even if it had been legit, holy poo poo they should talk to someone who understands valuations before investing a dime into anything in the future. At their purchase price they valued a company that had seemingly nothing, no land, no equipment, not even a drat patent, at $15MM.
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Sep 7, 2015 22:42
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