dermot
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Post by dermot on Jan 16, 2018 10:52:56 GMT
Don't know if any P2P funded development projects rely directly on Carillion for construction, but wouldn't be surprised if some of the many thousands of their subcontractors are involved.
Might be looking at a bit of a cascade here.
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ceejay
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Post by ceejay on Jan 16, 2018 15:35:18 GMT
Indeed. Of the P2P platforms I'm involved with, it seems that FC would be the highest risk from this point of view - a number of small businesses who have used FC loans to stay solvent, may now be pushed over the edge.
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Post by martinde21 on Jan 16, 2018 22:01:23 GMT
Very sad story. Lots of people are losing their jobs both at Carillion and its subcontractors. I don't know how many of its subcontractors will have had credit insurance and whether this helps in the event of liquidation. The banks I read are writing off £1bn in loans and that 1p in the pound may be recoverable. It looks like there were warning signs for a year that Carillion was in financial difficulties. The Carillion directors don't come off well IMHO.
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IFISAcava
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Post by IFISAcava on Jan 16, 2018 22:26:14 GMT
Very sad story. Lots of people are losing their jobs both at Carillion and its subcontractors. I don't know how many of its subcontractors will have had credit insurance and whether this helps in the event of liquidation. The banks I read are writing off £1bn in loans and that 1p in the pound may be recoverable. It looks like there were warning signs for a year that Carillion was in financial difficulties. The Carillion directors don't come off well IMHO. They do financially
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jan 17, 2018 13:10:51 GMT
Hopefully none of the companies that are committed to fixed cost build contracts on development loans find themselves going out of business.
What would be the legal position for costs of completion? Any developers/ property players please.
Maybe worthwhile platforms with dfl where fixed build contracts to check for vulnerability and report back the solution.
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Post by propman on Jan 26, 2018 17:32:42 GMT
Hopefully none of the companies that are committed to fixed cost build contracts on development loans find themselves going out of business. What would be the legal position for costs of completion? Any developers/ property players please. Maybe worthwhile platforms with dfl where fixed build contracts to check for vulnerability and report back the solution. The legal position depends what the contractual position is of the developer with the insolvent party. It is common for a main building contractor to have to put up a bank bond at least for larger contracts. This would be recoverable by the developer to cover its losses if they fail to complete. I do not know whether Carillion put bonds up for smaller projects 'though. If it is a sub-contractor of the main contractor that the developer engaged with, then any fixed price would normally need to be honoured by the main contractor so long as it remained solvent. Liquidators are allowed to rescind contracts and the affected customers would need to stand as unsecured borrowers for their losses (ie 1p in pound or whatever), so not in a good place. In addition, it is a risky business taking on a half built project as the new constructor will need to ensure that the work has been done appropriately and confirm proper checks and plans are in place. They would often poceed with existing sub-contractors, but will need to renegotiate fees from a position of weakness. So expect increased costs and delays.
I have seen "step in rights" that allow the developer to take over the existing sub-contracts of a main contractor that fails, this is not usual practice on fixed price contracts 'though.
HTH
PM
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jan 26, 2018 17:43:12 GMT
Hopefully none of the companies that are committed to fixed cost build contracts on development loans find themselves going out of business. What would be the legal position for costs of completion? Any developers/ property players please. Maybe worthwhile platforms with dfl where fixed build contracts to check for vulnerability and report back the solution. The legal position depends what the contractual position is of the developer with the insolvent party. It is common for a main building contractor to have to put up a bank bond at least for larger contracts. This would be recoverable by the developer to cover its losses if they fail to complete. I do not know whether Carillion put bonds up for smaller projects 'though. If it is a sub-contractor of the main contractor that the developer engaged with, then any fixed price would normally need to be honoured by the main contractor so long as it remained solvent. Liquidators are allowed to rescind contracts and the affected customers would need to stand as unsecured borrowers for their losses (ie 1p in pound or whatever), so not in a good place. In addition, it is a risky business taking on a half built project as the new constructor will need to ensure that the work has been done appropriately and confirm proper checks and plans are in place. They would often poceed with existing sub-contractors, but will need to renegotiate fees from a position of weakness. So expect increased costs and delays.
I have seen "step in rights" that allow the developer to take over the existing sub-contracts of a main contractor that fails, this is not usual practice on fixed price contracts 'though.
HTH
PM
Thanks for the info propman. We have seen the concerns about part built properties being taken over by a new company mentioned many times across p2p distressed loans. It seems strange that none of the platforms informed us that they would commit to checking contracts. We will just need to see once the dust settles. S
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