cwah
Member of DD Central
Posts: 949
Likes: 468
|
Post by cwah on Sept 23, 2019 19:23:35 GMT
Hello
We've all been stranded by all these stuck for YEARS zombie loans.
I was wondering why companies like Thomas Cook or Debenham go into administration as soon as they can't pay...
But for our loans it takes years for anything to happen?
Why can't a bridging loan goes into insolvency 1 day after it's late? It would sort things out much faster and administrators could justify their cost on a quick to unload asset.
|
|
iRobot
Member of DD Central
Posts: 1,657
Likes: 2,450
|
Post by iRobot on Sept 23, 2019 20:40:47 GMT
Hello We've all been stranded by all these stuck for YEARS zombie loans. I was wondering why companies like Thomas Cook or Debenham go into administration as soon as they can't pay... But for our loans it takes years for anything to happen? Why can't a bridging loan goes into insolvency 1 day after it's late? It would sort things out much faster and administrators could justify their cost on a quick to unload asset. I think the dynamics at play for a P2P 'zombie' loan compared to a situation like TC or Debs are so far removed from each other in almost every respect, that any meaningful comparison is impossible, but ... There might be an argument that 'companies like ...' haven't been able to pay for years. Not from their own revenues. There's often significant levels of credit that go to keeping the lights on at these organisations and these might be extended and offered considerable forbearance before the Administrators are called in. Why? Because supporting action is often the better path than marching everyone to the guillotine on term-date-plus-one-day, or anything close to that quickly. Consider this: " There are 76,580 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance [and 23,520 of those >10%] (Q1 2019)" -- why don't the mortgage companies foreclose as soon as these went just 1% in arrears? Or just went into arrears, full stop? [10.9 million of those!] Interesting stat from the linked site: In 2018, a property was repossessed every hour and 34 minutes. No wonder it takes months to get a court date for a repossession hearing. (For clarity: As a cohort, have these P2P 'zombie loans' always been managed effectively? Almost certainly not. But that isn't the question being asked.)
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,850
Likes: 11,078
|
Post by ilmoro on Sept 23, 2019 21:02:35 GMT
They go into recovery as soon as the lender calls the loan in. Being in default isnt the same as the loan being called in. Thomas Cook has been in default for months, assume having breached its loan covenants, but certainly hasnt been paying hotels. The banks have given it forebearance to get the rescue deal done, when that failed they called the loan in. The company is in such dire straits they have gone straight into liquidation, no attempt to rescue it beyond steps already taken.
|
|
cwah
Member of DD Central
Posts: 949
Likes: 468
|
Post by cwah on Sept 23, 2019 21:31:21 GMT
They go into recovery as soon as the lender calls the loan in. Being in default isnt the same as the loan being called in. Thomas Cook has been in default for months, assume having breached its loan covenants, but certainly hasnt been paying hotels. The banks have given it forebearance to get the rescue deal done, when that failed they called the loan in. The company is in such dire straits they have gone straight into liquidation, no attempt to rescue it beyond steps already taken. I thought it was still paying. I worked there few months ago and I've certainly been paid. How do you know it's been breaching its loan covenant, and especially it hasn't been paying hotels? If not the hotels wouldn't accept the travellers!
|
|
agent69
Member of DD Central
Posts: 5,599
Likes: 4,184
|
Post by agent69 on Sept 23, 2019 21:38:53 GMT
They go into recovery as soon as the lender calls the loan in. Being in default isnt the same as the loan being called in. Thomas Cook has been in default for months, assume having breached its loan covenants, but certainly hasnt been paying hotels. The banks have given it forebearance to get the rescue deal done, when that failed they called the loan in. The company is in such dire straits they have gone straight into liquidation, no attempt to rescue it beyond steps already taken. I thought it was still paying. I worked there few months ago and I've certainly been paid. How do you know it's been breaching its loan covenant, and especially it hasn't been paying hotels? If not the hotels wouldn't accept the travellers! Given all the recent interviews with people who have been asked to pay for their accommodtion again by the hotel, this must be happening. God knows why, as if you pay TC in advance then you would think the hotel would want paying up front as well.
|
|
|
Post by gadget on Sept 23, 2019 22:19:40 GMT
Hello We've all been stranded by all these stuck for YEARS zombie loans. I was wondering why companies like Thomas Cook or Debenham go into administration as soon as they can't pay... But for our loans it takes years for anything to happen? Why can't a bridging loan goes into insolvency 1 day after it's late? It would sort things out much faster and administrators could justify their cost on a quick to unload asset. Your premise is bs to be honest. Thomas Cook first emergency financing was in 2011. So that's 8 years of kicking the can... Plus it will now probably be years sorting out the liquidation.
|
|
|
Post by propman on Sept 24, 2019 15:18:24 GMT
I thought it was still paying. I worked there few months ago and I've certainly been paid. How do you know it's been breaching its loan covenant, and especially it hasn't been paying hotels? If not the hotels wouldn't accept the travellers! Given all the recent interviews with people who have been asked to pay for their accommodtion again by the hotel, this must be happening. God knows why, as if you pay TC in advance then you would think the hotel would want paying up front as well. It has always been the case that large companies have been able to get credit terms not available to the man in the street. HMRC accepted that holding prepayments on deposit is an integral part of a Travel Agents business decades ago. the hotel is relying on the Travel Agent being good for the money. They should also get paid from the ATOl scheme for the remainder of existing holidays, but they will get little of the costs accrued before today.
As for the general question, once the banks pull the plug, most trade agreements are no longer valid and so they can nolonger get free credit and suppliers stop servicing them. In addition, liquidators are personally responsible for any costs they incur , so they make sure that ongoing expenditure is stopped as a matter of priority. As said above, however, these companies were in negotiations for some time and will have received additional funding during this process. rather like tyhe pretend and extend often seen in P2P.
|
|
adrianc
Member of DD Central
Posts: 8,977
Likes: 4,803
|
Post by adrianc on Sept 25, 2019 8:03:50 GMT
Bit on R4 Today this am - I was half-asleep at the time, so might have the figures confused, but...
Total amount owed to hotels is ~£340m. While they're ABTA/ATOL licenced, that's guaranteed, and the hotels are being paid. But their licence is up for annual renewal at the end of this month, and they need to issue financial guarantees to renew it... THAT's your final straw...
|
|
Greenwood2
Member of DD Central
Posts: 4,243
Likes: 2,686
|
Post by Greenwood2 on Sept 25, 2019 8:15:54 GMT
They go into recovery as soon as the lender calls the loan in. Being in default isnt the same as the loan being called in. Thomas Cook has been in default for months, assume having breached its loan covenants, but certainly hasnt been paying hotels. The banks have given it forebearance to get the rescue deal done, when that failed they called the loan in. The company is in such dire straits they have gone straight into liquidation, no attempt to rescue it beyond steps already taken. I thought it was still paying. I worked there few months ago and I've certainly been paid. How do you know it's been breaching its loan covenant, and especially it hasn't been paying hotels? If not the hotels wouldn't accept the travellers! I heard that they usually paid the hotels six weeks in arrears. The hotels should be guaranteed their payments (by ATOL or the UK government), but I guess some of them don't want to wait for this or take the risk and are insisting guests pay upfront.
|
|
|
Post by bracknellboy on Sept 25, 2019 8:42:12 GMT
I thought it was still paying. I worked there few months ago and I've certainly been paid. How do you know it's been breaching its loan covenant, and especially it hasn't been paying hotels? If not the hotels wouldn't accept the travellers! I heard that they usually paid the hotels six weeks in arrears. The hotels should be guaranteed their payments (by ATOL or the UK government), but I guess some of them don't want to wait for this or take the risk and are insisting guests pay upfront. Umm. I'm not sure that is right. ATOL or govt. will cover an individual's contract with the busted firm: so for example if I've coughed up for a package holiday I've yet to take then I would be refunded. I also think that it will cover the individuals already on their holiday for additional costs they might incur as a result of being stranded e.g. additional hotel costs if they have to stay out longer than the original holiday.
I believe however it does not cover the hotel (or some other business entity) in regard to their contract with TC. They are simply creditors in the queue along with any other creditors. Hence why some have been trying to TC guests to payup even though there was no contract between the holidaymakers and the hotel, and the holidaymakers should not be contractually liable, TC is (or the dead parrot version of TC).
All of the above is caveated by the simple statement that this is what I understood as a result of something I thought I remember reading....
|
|
jo
Member of DD Central
Posts: 727
Likes: 492
|
Post by jo on Sept 25, 2019 9:05:54 GMT
I was wondering why companies like Thomas Cook or Debenham go into administration as soon as they can't pay...
By the time news of a large company's demise hits the mainstream media, its already old news. There would have been a lot going on for months or years before D-Day finally hits.
That's the beauty of the stockmarket compared to P2P.
With the stockmarket its all out in the open, warts and all.
Any Tom, Dick or Harry could have seen the writing was on the wall for Thomas Cook at least a year (or more ago).
Meanwhile, P2P is all mushrooms and secrecy. At best you'll only ever know half the story.
Amen. Highlights the difference between an open price discovery system - where investors can make decisions right the way through the cycle, based on their own personal circumstances and view - and one where an initial investment can lock you indefinitely into a platform's (self-devised) policy on secondary markets - even if you're dead!
|
|
Greenwood2
Member of DD Central
Posts: 4,243
Likes: 2,686
|
Post by Greenwood2 on Sept 25, 2019 11:57:04 GMT
I heard that they usually paid the hotels six weeks in arrears. The hotels should be guaranteed their payments (by ATOL or the UK government), but I guess some of them don't want to wait for this or take the risk and are insisting guests pay upfront. Umm. I'm not sure that is right. ATOL or govt. will cover an individual's contract with the busted firm: so for example if I've coughed up for a package holiday I've yet to take then I would be refunded. I also think that it will cover the individuals already on their holiday for additional costs they might incur as a result of being stranded e.g. additional hotel costs if they have to stay out longer than the original holiday.
I believe however it does not cover the hotel (or some other business entity) in regard to their contract with TC. They are simply creditors in the queue along with any other creditors. Hence why some have been trying to TC guests to payup even though there was no contract between the holidaymakers and the hotel, and the holidaymakers should not be contractually liable, TC is (or the dead parrot version of TC).
All of the above is caveated by the simple statement that this is what I understood as a result of something I thought I remember reading....
On TV this morning the person representing the organisation of the repatriation of the holiday makers said that the hotels would be paid and that no one should give the hotels additional money. But not so easy if the hotel is going to chuck you out or not let you leave unless you pay.
|
|
|
Post by bracknellboy on Sept 25, 2019 12:04:09 GMT
Umm. I'm not sure that is right. ATOL or govt. will cover an individual's contract with the busted firm: so for example if I've coughed up for a package holiday I've yet to take then I would be refunded. I also think that it will cover the individuals already on their holiday for additional costs they might incur as a result of being stranded e.g. additional hotel costs if they have to stay out longer than the original holiday.
I believe however it does not cover the hotel (or some other business entity) in regard to their contract with TC. They are simply creditors in the queue along with any other creditors. Hence why some have been trying to TC guests to payup even though there was no contract between the holidaymakers and the hotel, and the holidaymakers should not be contractually liable, TC is (or the dead parrot version of TC).
All of the above is caveated by the simple statement that this is what I understood as a result of something I thought I remember reading....
On TV this morning the person representing the organisation of the repatriation of the holiday makers said that the hotels would be paid and that no one should give the hotels additional money. But not so easy if the hotel is going to chuck you out or not let you leave unless you pay. I'm pretty sure that is referring for costs for the period after TC went pop, but not prior to. Edit:
The industry insurance fund Atol, which covers payments in the event of a firm failing, covers bills for rooms and food that have been run up this week. However, arrears that were built up at hotels before Thomas Cook's collapse will not be covered by the Atol fund. Affected hoteliers will have to apply to the liquidators for their money.
|
|
Greenwood2
Member of DD Central
Posts: 4,243
Likes: 2,686
|
Post by Greenwood2 on Sept 26, 2019 6:41:35 GMT
On TV this morning the person representing the organisation of the repatriation of the holiday makers said that the hotels would be paid and that no one should give the hotels additional money. But not so easy if the hotel is going to chuck you out or not let you leave unless you pay. I'm pretty sure that is referring for costs for the period after TC went pop, but not prior to. Edit:
The industry insurance fund Atol, which covers payments in the event of a firm failing, covers bills for rooms and food that have been run up this week. However, arrears that were built up at hotels before Thomas Cook's collapse will not be covered by the Atol fund. Affected hoteliers will have to apply to the liquidators for their money.
So the hotels are probably out six weeks of payments at least, no wonder they are trying to extract money from current residents, even though that money may end up being paid twice!
|
|
|
Post by bracknellboy on Sept 26, 2019 8:21:56 GMT
I'm pretty sure that is referring for costs for the period after TC went pop, but not prior to. Edit:
The industry insurance fund Atol, which covers payments in the event of a firm failing, covers bills for rooms and food that have been run up this week. However, arrears that were built up at hotels before Thomas Cook's collapse will not be covered by the Atol fund. Affected hoteliers will have to apply to the liquidators for their money.
So the hotels are probably out six weeks of payments at least, no wonder they are trying to extract money from current residents, even though that money may end up being paid twice! Quite.
|
|