M2 committee formation RSM call (L)

I would go for an increased chance of success over 'equitable' any day but, of course, LAG does not control who replies to RSM. That's why RSM is writing to everyone. Lisa and others have been legally battling on the behalf of M2 lenders for something like 4yrs now.

Clearly, M1 and creditors of Lendy would want to minimise payouts to M2 lenders but the M2 committee does not represent them. Some people will be M1 and M2 lenders, of course, and a few will be solely M1 lenders.

Any M2 lender who has, for some (?) reason, been excluded from LAG, has the opportunity to reply to RSM directly. As I understand it, the committee is to be 3-5 members, including Lisa, and 'if more than four candidates apply, the Administrators will seek a decision of the Model 2 Lenders'.

The whole reason the M2 comittee is to exist at all is because of Lisa and a few other people aiming to help all M2 lenders, rather than all proceeds under discussion going to the creditors of Lendy.

Not that I know of, but it's not a formal group as far as I see, just a Facebook group. You don't miss out on returned capital just because you are not a member. Most comments are from people unaware of what is going on, asking what things mean, or angry folk asking where their money is. There appears to be a small number of people actually competent and doing something and, to all appearances, they are acting to the benefit of M2 lenders.

As far as I can tell, more recently, and over a very long period of time, Lisa and a few others have been legally pushing through the courts for M2 lenders, for example, to receive a portion of funds resulting from legal claims pursued by RSM (whose principle responsibility is to act on behalf of Lendy creditors (includes M1 lenders), being the administrator, and not M2 lenders) when chasing defaulted M2 loans, in exchange for an agreed fee payable to RSM. For some M2 loans, this might make a significant difference on returns to lenders, for other M2 loans it won't make any difference at all. But they have already been very instrumental in ensuring monies recouped from M2 loans are returned to M2 lenders ahead of Lendy's creditors, contrary to what Lendy appeared to try to do ("waterfall") by changing their terms before becoming insolvent.

(Lisa posted on Facebook asking for interest in the M2 committee members back in October 2022. Movement on these issues through courts is glacial, which is why most people not closely involved lose track given the complexity of the issues and the novelty of P2P loans to most involved legally.)

I think Lisa has said she does not participate here. zlb is probably just a helpful member from LAG who suggested copying it here. I doubt Lisa minds me posting a bit of what she posted on Facebook from back in Oct: "...one of the provisions allows us to form a 5 person "M2 committee" who will, amongst other things, review all recoveries to ensure the correct distribution is made, ensure proposals fit within the agreed parameters and in general to work with the administrator when deciding a path forward where proposed actions require the administrators to spend money on recoveries with an uncertain outcome. To staff this with the correct people we are seeking M2 investors with a legal, accounting or actuarial background. Additionally anyone who is trained to analyze numbers or situations would be a good fit. People selected must be willing to roll up their sleeves and participate. This post would likely take a few hours each month and last until the administration finishes. If you think you can contribute, please message me outlining your background so we can prepare for the next steps once we come to an agreement with RSM and have the courts sign off."

Given the dedicated work that Lisa and others have spent on this (4yrs), and that she will definitely be one of the committee members, one can see that it is sensible that she is able to work with the committee members and that she considers it important that the correct mix of skills is on the committee. And, on behalf of all the M2 lenders, it makes sense that she suggests who is on the committee given the research she has already done in the M2 community.

Maybe, but RSM are in a little bit of a tricky position because, as I understand it, as the Lendy administrator their job is to work for the benefit of the Lendy creditors. Putting it simply, it is only a legal technicality that makes RSM return reclaimed funds from loans to the actual individuals who lent the money out through Lendy, and not just keep it all for the Lendy creditors. That is after one considers that they also have their own interests in charging for such administrative work and, obviously, will take a portion of the reclaimed funds for this work. This is what the LAG team have clarified through legal proceedings; they have successfully made a court declare that M2 lenders have some right to M2 loan reclaims and that they have a right in certain other decisions, too.

RSM's legal requirement with regard the formation of the M2 committee, in terms of communication, as I understand it, may be only to ask for nominees to the M2 committee. If RSM were to agree to forward LAG communication to all lenders, without a legal obligation to do so, Lendy creditors may, possibly, then have a legal claim against RSM for acting against their interests. Basically, <M2 lenders> are set against <M1 lenders and Lendy creditors>. And many of us are both M1 and M2 lenders! Do you see how tricky this all is?

As you say, I think it highly likely there will be some kind of a voting effort for the M2 committee. If the voting is proportional representation, disregarding any money interest, then LAG should get their way as this is the largest united front of M2 lenders. However, this inevitability will not stop the necessary cost of the voting process. And whether this will be the voting process is unclear to me.

I can absolutely understand why LAG moved from its own web site to Facebook, even if it meant that some lenders fell out of the loop (myself included).

It'll be interesting to see how many nominations RSM receives. Of the c. 10,000 Lendy lenders, most probably don't engage with LAG (c. 1,800 members on Facebook) or use this forum, therefore they won't know that LAG has already identified potential committee members.

If there's a vote, hopefully RSM will include a short bio / introduction against each candidate so we know who we're voting for. Might as well just choose them at random otherwise.