wuzimu
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Post by wuzimu on Oct 23, 2019 10:56:19 GMT
Dear FS Lenders, I am a fairly small FS investor so I am not going to start an FSAction Group, cos I'm doing Lendy Action Group and I have a life.
But I strongly suggest a few motivated FS lenders do start a group.
A simple Facebook group would do, the important thing is to come up with a mission statement that is fairly broad and is not controversial and get enough members signed up to get credibility to approach the Administrator, you only need 20 or so to start with, the ball then rolls....
Garage246 made a spot on comment in another thread- the first aim is to put the administrators on notice that lenders consider themselves creditors to the full level of the outstanding balance.
That must be because lenders claim FS owes them a civil liability based on breaches of fiduciary duty in agency and trust. (Well I do)
THe administration is always legally framed to maximize recovery to creditors, so lenders must position themselves as creditors aswell as lenders. So even though the CG Q&A doc states they will take 'investors' recovery into account, it will be Creditors on the Creditors Committee. This should be do-able.
If / when such a FSAG emerges, they can contact Lendy Action Group if they want to benefit from our experience. We are only at the start of our journey and the fireworks are still to come, but we have learnt alot! The administrators and FCA interests are not entirely aligned with lenders byy any means, so lenders need to get involved in the process.
Good luck.
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Garage246
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Post by Garage246 on Oct 23, 2019 11:04:51 GMT
Thanks Wuzimu, absolutely agree and thanks for quoting my post from the other thread about contacting the administrators now to demand a creditors meeting. Absolutely key, and the more who ask for this the more likely it will happen and we get control.
Is there a business opportunity here for someone to start and run action groups - I can see more requirements in the future.... Seriously though, the Lendy Action Group is extremely valuable and there is a lot of spin off from that which we can use to help us going forward.
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rs
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Post by rs on Oct 23, 2019 12:20:21 GMT
Thanks Wuzimu, absolutely agree and thanks for quoting my post from the other thread about contacting the administrators now to demand a creditors meeting. Absolutely key, and the more who ask for this the more likely it will happen and we get control. Is there a business opportunity here for someone to start and run action groups - I can see more requirements in the future.... Seriously though, the Lendy Action Group is extremely valuable and there is a lot of spin off from that which we can use to help us going forward. Hi garage246 Please can you send me a template email to send to administrators to demand creditors meeting and I'm also happy to join FS Action group.
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Garage246
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Post by Garage246 on Oct 23, 2019 12:40:04 GMT
Hi RS - I can confirm that a number of emails have already gone in. Something along the following lines should help for now, including wuzimu's point above. The administrator names are on the FS website as is the email address to send this to (I don't think I can post that here due to forum rules). Please do edit, improve or tailor accordingly!
FAO J** A**-G**, E** A**-G** and D** R**,
Further to the appointment of yourselves as Administrators of Funding Secure on 23rd October 2019, I am one of the investors in the platform.
Whilst it is early days and there is a clearly defined timing of events that needs to happen. I am asking for the holding of an initial Creditors’ Meeting in due course, which I understand that a number of lenders will want to attend. Dependent on the outcome of any discussion on the creditor status of investors, we would also wish for a Creditors' Committee to be formed subject to approval at the Creditors’ Meeting. We the lenders, would like to put the Administrators on notice that the lenders consider themselves to be creditors to the full level of the outstanding balance on each loan because we claim that FS owes us a civil liability based on breaches of fiduciary duty in agency and trust.
Please acknowledge receipt of this email.
Yours sincerely
NAME
ADDRESS
ACCOUNT DETAILS
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rs
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Post by rs on Oct 23, 2019 12:42:05 GMT
Hi RS - I can confirm that a number of emails have already gone in. Something along the following lines should help for now, including wuzimu's point above. The administrator names are on the FS website as is the email address to send this to (I don't think I can post that here due to forum rules). Please do edit, improve or tailor accordingly! FAO J** A**-G**, E** A**-G** and D** R**, Further to the appointment of yourselves as Administrators of Funding Secure on 23rd October 2019, I am one of the investors in the platform. Whilst it is early days and there is a clearly defined timing of events that needs to happen. I am asking for the holding of an initial Creditors’ Meeting in due course, which I understand that a number of lenders will want to attend. Dependent on the outcome of any discussion on the creditor status of investors, we would also wish for a Creditors' Committee to be formed subject to approval at the Creditors’ Meeting. We the lenders, would like to put the Administrators on notice that the lenders consider themselves to be creditors to the full level of the outstanding balance on each loan because we claim that FS owes us a civil liability based on breaches of fiduciary duty in agency and trust. Please acknowledge receipt of this email. Yours sincerely NAME ADDRESS ACCOUNT DETAILS Thankyou
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Oct 23, 2019 15:52:39 GMT
Is this really the time to bombard administraitors with thousands of similar emails requiring response.
This will only increase their costs and delay their investigations.
They have a Legal duty to Inform and report at specific times.
Let's give them a few weeks to get settled in without having to deal with requests that ultimately will make no diference to the outcome as under FCA rules
and Insolvency requlations their ability to make Ad Hoc policy is restricted.
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Garage246
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Post by Garage246 on Oct 23, 2019 15:56:42 GMT
Is this really the time to bombard administraitors with thousands of similar emails requiring response.
This will only increase their costs and delay their investigations.
They have a Legal duty to Inform and report at specific times.
Let's give them a few weeks to get settled in without having to deal with requests that ultimately will make no diference to the outcome as under FCA rules
and Insolvency requlations their ability to make Ad Hoc policy is restricted.
Yes it is, lessons learnt from Lendy administration, and it worked. They forced the creditors meeting.
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Godanubis
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Post by Godanubis on Oct 23, 2019 16:00:27 GMT
Is this really the time to bombard administraitors with thousands of similar emails requiring response.
This will only increase their costs and delay their investigations.
They have a Legal duty to Inform and report at specific times.
Let's give them a few weeks to get settled in without having to deal with requests that ultimately will make no diference to the outcome as under FCA rules
and Insolvency requlations their ability to make Ad Hoc policy is restricted.
Yes it is, lessons learnt from Lendy administration, and it worked. They forced the creditors meeting. And the outcome of that meeting that made any difference other than satisfy need to complain was what ?
Most here are investors not creditors with different rights
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Godanubis
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Post by Godanubis on Oct 23, 2019 16:08:08 GMT
By all means set up a group and do it formally and have a consensus. Collectively you then might have some weight and be able to act as representatives rather than Admin. trying to address thousands of small angry investors.
Hundreds or thousands of emails have less impact than a single petition or request signed by the same people. IMO
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Garage246
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Post by Garage246 on Oct 23, 2019 16:10:57 GMT
Yes it is, lessons learnt from Lendy administration, and it worked. They forced the creditors meeting. And the outcome of that meeting that made any difference other than satisfy need to complain was what ? Once you have a creditors meeting you can appoint a creditors committee. The administrators have to report to the creditors committee and have to agree strategy and budget with the committee. The committee can impose budgetary constraints on the administrators and indeed have done so in the case of Lendy. This means they can cap the spend of the administrators if they are taking liberties. So ultimately if you want to have some control over what the administrators bill might be, how long they might string the process out for and what their disposal strategy might be, it is absolutely the way to go. I don't know if you are involved with Lendy but take a look at what those guys have done under the LAG - there is a creditors committee of 5, all platform investors, and they have a strong mandate over RSM - there is a lot to be learnt from those guys. If you leave the administrators to their own devices you have no control over anything and fees can just balloon. In the best case they will do a good job (which they will still do with a creditors committee), in the worst case they will fleece investors for fees or not do a good job in recoveries. Do we really know enough about the administrators to just leave them to it and hope for the best. Given the amount I have on the platform, that's something I would not be prepared to do. Just to be clear the point of a creditors meeting is to get a creditors committee appointed, not as a complaining mechanism and not as a way of increasing administration costs - quite the contrary
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pip
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Post by pip on Oct 23, 2019 16:14:22 GMT
Yes it is, lessons learnt from Lendy administration, and it worked. They forced the creditors meeting. And the outcome of that meeting that made any difference other than satisfy need to complain was what ?
Most here are investors not creditors with different rights
I think the argument was that investors are creditors as they would have successful claims had the company existed for misselling. Not an argument I really buy though as companies in administration are protected from legal claims. If somebody had an outstanding legal judgement against FS then they would be creditors, but if not I think one would be an investor. However I suspect (although I could be wrong) that creditors are likely to get nothing in administration and would have no right to proceeds from the sale of the loanbook. I would hope (maybe naively) that in the case of a P2P default the administrators would run the company, as required by law, to get the best returns for creditors, but that the FCA will mandate that the loanbook be ringfenced and the proceeds returned to investors (after I am sure the hefty fees of administrators). What I am trying to say is that I suspect one would be better being an investor rather than a creditor. I can't see creditors getting anything, a few computers, leased building....etc.
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Garage246
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Post by Garage246 on Oct 23, 2019 16:14:25 GMT
By all means set up a group and do it formally and have a consensus. Collectively you then might have some weight and be able to act as representatives rather than Admin. trying to address thousands of small angry investors.
Hundreds or thousands of emails have less impact than a single petition or request signed by the same people. IMO
I appreciate your point of view, but you need sufficient clear demand from the investors to get the Creditors Meeting set up. That's how it was done with Lendy, through a template letter sent but a decent number of investors. If request is loud enough then it will happen. If only one or two do then it will not.
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Garage246
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Post by Garage246 on Oct 23, 2019 16:18:23 GMT
And the outcome of that meeting that made any difference other than satisfy need to complain was what ?
Most here are investors not creditors with different rights
I think the argument was that investors are creditors as they would have successful claims had the company existed for misselling. Not an argument I really buy though as companies in administration are protected from legal claims. If somebody had an outstanding legal judgement against FS then they would be creditors, but if not I think one would be an investor. However I suspect (although I could be wrong) that creditors are likely to get nothing in administration and would have no right to proceeds from the sale of the loanbook. I would hope (maybe naively) that in the case of a P2P default the administrators would run the company, as required by law, to get the best returns for creditors, but that the FCA will mandate that the loanbook be ringfenced and the proceeds returned to investors (after I am sure the hefty fees of administrators). What I am trying to say is that I suspect one would be better being an investor rather than a creditor. I can't see creditors getting anything, a few computers, leased building....etc. Based on what the LAG has achieved you can be both a creditor and an investor. A creditor by way of the fact that you have a claim against the company (agreed you can't actually take that claim to court), but an investor by way of the direct investment in the loans through FS as an agent. Agree the pay out as a creditor is likely to be zilch but it is a mechanism to get into a position of control and influence over the outcome and control the administration costs. There was a lot of work on this with the LAG and RSM (the administrators in that case) ultimately agreed that some key investors could be elected on the CC.
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shimself
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Post by shimself on Oct 23, 2019 16:26:26 GMT
Can someone explain what has happened to the pre-arranged rundown agreement?
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pip
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Post by pip on Oct 23, 2019 16:53:17 GMT
Can someone explain what has happened to the pre-arranged rundown agreement? Most of these rules only come into affect from December 2019. See FCA document. www.fca.org.uk/publication/policy/ps19-14.pdfIn short I think the only current requirement was to tell investors about their wind-down procedures. The only thing I can find is: www.fundingsecure.com/risk-warningsLet's see if they work. However let's not put lipstick on a pig here, whether FS went into administration or not, the recovery on most of its loans has looked like it is going to be negligible. Now we have three questions: a) is a recovery from the loanbook possible, (i.e. does the tree have any leaves on it), b) will the administrators have the resources or inclination to maximise recovery (i.e. will the tree get shaken) and c) how much of any proceeds will actually go to investors (i.e. will I get the fallen leaves?).
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