ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 5, 2018 14:13:16 GMT
I have spoken with someone far more learned than me and they have offered this comment:-
"Most Collateral property loans are development loans so have either refinanced or run out of funding. In the case of work being stopped BDO have two choices, wait for the developer to come up with a proposal or appoint receivers/administrators, if they do they would have to fund from somewhere the costs of securing the sites and, probably, severely damage the residual value. A further problem is these are not assets that the comany in Administration stands to benefit from so although they might have some Collateral assets (e.g. cash from the office account) they can't use them to the benefit one group of "trust" creditors over another. They also cannot borrow money, even if someone would lend it to them, for the purpose.
I have to agree this is an unholy mess and far from "protecting" investors interests the FCA action has almost certainly not been to the investors advantage but it is difficult to see what else could have been done."
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Post by mrclondon on Nov 5, 2018 15:00:44 GMT
I really don't agree with this, in any shape or form. (Sorry ozboy I know you are just the messenger  )
1) Most of the development projects were simply land (or empty building shells) awaiting development (and in most cases awaiting planning applications / decisions) . One of which (Hereford) has refinanced this year. Quite a number of projects were complete and awaiting sales at optimum valuations (Doncaster, Barnsley, Bradford, Huddersfield)
I think there were just two development projects that were under construction Q1 2018:
- Littleborough, a small single property renovation which should have been nearing completion Q1 2018
- Bolton, the large student dev project.
2) If build out to completion is a viable option, it would be the administrator of the specific project raising the funds for the build out not BDO, which is then treated as a cost of the administration and comes before all existing creditors. (See MT Plymouth1 / Boll***ton and FS Wimbledon for examples).
3) As yet we have not seen BDO appoint receivers / administrators over any of the borrowers. This is perhaps where criticsm of BDO should be directed. However it is important to note that the Bolton dev is an offshore borrower so we would be unaware of what legal actions are taking place in that specific case.
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GeorgeT
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Post by GeorgeT on Nov 5, 2018 15:27:52 GMT
The first line of the quotation which says that most COL property loans were development loans is factually incorrect.
I was spread over most property loans and most of my loans were small buy-to-let type properties such as several in Blackpool and several in Wallsend Newcastle area and there were a number of other smaller properties around the country. I can only remember the big Bolton development loan with all the different tranches at different rates and there was one other as well I can remember being in which had different rates on the tranches but I'm pretty sure that the majority of the cold property loans were very nice pre built assets and that is why I would expect most of them would have been able to have been either refinanced or repossessed and sold by now.
The relatively small size and relative simplicity of the COL book in terms of there being a lot of bling and cars and buy-to-let properties ought to have led this matter to have been quite substantially tied up some 9 months after the company shut down but it seems there is a slow rate of progress and I am afraid I feel this is because there is no incentive on the joint administrators to bring it to a timely conclusion because they are being paid on a time basis so more months and admin work is more fees and less for the investors to get back.
I fear we will still be in much the same situation this time next year. This is one of the downsides of appointing a massive national company to deal with the winding down of a very small company. As a project it sort of gets lost in the in-tray amongst much bigger fish and coupled with the fee basis there is little incentive to push and prioritise it.
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star dust
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Post by star dust on Nov 5, 2018 16:33:58 GMT
I really don't agree with this, in any shape or form. (Sorry ozboy I know you are just the messenger )
1) Most of the development projects were simply land (or empty building shells) awaiting development (and in most cases awaiting planning applications / decisions) . One of which (Hereford) has refinanced this year. Quite a number of projects were complete and awaiting sales at optimum valuations (Doncaster, Barnsley, Bradford, Huddersfield)
I think there were just two development projects that were under construction Q1 2018:
- Littleborough, a small single property renovation which should have been nearing completion Q1 2018
- Bolton, the large student dev project.
2) If build out to completion is a viable option, it would be the administrator of the specific project raising the funds for the build out not BDO, which is then treated as a cost of the administration and comes before all existing creditors. (See MT Plymouth1 / Boll***ton and FS Wimbledon for examples).
3) As yet we have not seen BDO appoint receivers / administrators over any of the borrowers. This is perhaps where criticsm of BDO should be directed. However it is important to note that the Bolton dev is an offshore borrower so we would be unaware of what legal actions are taking place in that specific case.
I think this one is a bit of a concern as there seem to have been no reports of building re-starting since it appeared to stop at the end of June - p2pindependentforum.com/post/274987/thread and an unfinished development that hangs around too long isn't generally good news.
Perhaps this is something the CC could raise in view of its size - not that I'm expecting them to tell us or give us an answer about it.
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