Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Sept 25, 2023 16:06:11 GMT
Starting from the beginning ... on the basis that this loan was sold as a first charge then lenders would have a potential claim against FS ... FS are insolvent & in administration so any claim would merely be as an unsecured creditor. They would join the other unsecured creditors ... the trade & expense creditors (now £900k) (nothing to do with the administration running, they predate it) and rank behind the £3m owed to RK et al, who are secured creditors. So FS is bust until it finds £3.9m plus to pay its debts (without Starr) plaus potentially all the lenders shortfalls as they are likely to be creditors (Lendy judgement) for that amount. My comments weren't related to the situation with this loan, so I don't disagree with this. And yes, they are 'bust' in the technical definition of insolvent. But they don't appear to be 'bust' in the more common understanding of having no money, given the fees they are pulling in.
This had crossed my mind given the CC have greater insight into the accounts than I do, which is why I asked the question of what exactly is costing so much to run the administration when from the outside it appears almost all the costs of recovering the loans (inc. CG's fee) come straight out of the loan recoveries themselves. And the bold part is my fear. If the CC decided an extra fee is needed to be taken from loan recoveries to keep the administration running, then that's best for all. But if these voluntary extra fees and CG's 'creative' interpretation of the T&Cs for this made-up settlement fee is effectively just building a pot for RK and friends, then I'm a lot less okay with that. They appear to be taking the settlement fee on any loan where there is any sort of repayment other than sale of the security, including when it is on top of the sale of (part of) the security:
E.g. 100% of total recovery is via settlement - they take a settlement fee. E.g. (some) security sold is 90% of total recovery, borrower payment 10% - they take a settlement fee.
E.g. security sold is 100% of the total recovery - they don't take a settlement fee. Some real examples:
F*rd Street
£425k settlement, net after legal etc. fees £377k. Settlement fee: £47.1k.
Meir, Stoke on Trent
£269k settlement, net after legal etc. fees £245.2k. Settlement fee: £35.67k.
Powerboats
£340k settlement, net after legal etc. fees £304.9k. Settlement fee: £65k. Expense contribution: £15.2k.
Augh, Co. Tyrone
2 pieces of security, one sold for £292k and repaid back in 2020 but CG held on to the funds.
CG allowed the borrower to settle the remaining debt for £87.7k rather than force a sale of remaining security.
£292k sale, £87.7k settlement, net after legal etc. fees £358.5k. Settlement fee: £37.1k. Expense contribution: £17.9k.
B*resford Road
2 pieces of security, one sold for £500k and repaid back in 2021 minus the incorrectly taken £29.1k 5% fee (some given back recently). CG allowed the borrower to settle the remaining debt for £85k rather than force a sale of remaining security.
£85k settlement, net after legal etc. fees £73.5k. Settlement fee: £27.8k. Expense contribution: £3.6k. ------ So that's ~£213k of settlement fees, £36.7k in expense contributions, and £29.1k (minus a bit) in the 5% fee. Those are just 5 loans I was in where there was a settlement fee, I don't know how many other loans it has been applied to. They represent only £1.91m of £49.4m of gross loan recoveries so far (3.8%). Add in the 5% fee from other loans, which they have now been mostly allowed to keep. Whilst not directly proportional, CG's ~2.5% fee has now amounted to £883k (as per recent report), for some sort of comparison. Add in a handful of loans that have paid back in full and FS have legitimately received their fees. Add in £71.9k in bank interest (as per recent report). Add in £87.79k from Luxmore (as per recent report). Starts to add up.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Sept 22, 2023 13:46:45 GMT
Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in. I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc. What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in. Small matter of their debts which are why they are in insolvency in the first place ... FS has very little income, the deductions are to cover costs ... difficult to see true picture as missing info in last set of admin accounts In the initial Administrators' Proposals, "trade and expense creditors" totalled £434k. I would guess some of this had/has to be paid keep the administration going. The JC Starr debt is its own thing and (potentially) being taken from lenders' funds not FS'. The other debts are RK and friends, which has nothing to do with the running of the administration, and should just join the creditor queue at the end of the administration.
Very little income? Just from a couple of my loans that finally settled recently, they took over £130k in 'settlement' and 'expense contribution' fees. Across the whole loan book this will seemingly total millions. So back to my question above, are the costs really going to come to that much? Or are CG building a nice pot for creditors?
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Sept 21, 2023 13:29:29 GMT
Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in.
I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc.
What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Jan 26, 2023 16:59:13 GMT
As I've mentioned on here a few times, it is in the administrators' and FS' interest for loans to be settled rather than the security sold. We have court directions saying investors' capital and interest come before FS' admin fee when the security is sold. When the security isn't sold, the administrators appear to have made up their own fee structure that takes significantly more of the return.
Interesting then on this loan that the administrators somehow failed to appoint receivers to get the second property sold for literally years and instead opted for accepting a reduced settlement. End result: FS win. Administrators win. Borrower wins. Investors lose.
And there's apparently still further fees to be deducted to "fund the ongoing expenses of the Administration", because the £37k for FS and £10.7k for C&G already taken isn't enough it seems.
One could even argue that FS' admin fee shouldn't be taken on this loan at all given the bulk of the repayment came from selling part of the security and the court directions state that when security is sold FS' admin fee rank below investors.
And where they've plucked some of those numbers from I've got no idea, these breakdowns need to contain a lot more detail.
Whole thing is a mess.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Chat
Next PM
Jul 13, 2022 13:23:40 GMT
Post by Brainer on Jul 13, 2022 13:23:40 GMT
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on May 27, 2022 20:45:16 GMT
Anyone remember Amway I had a friend who was recruited into this and she persuaded me to go to a presentation. The idea was you got a percentage for selling products but you were better off recruiting others to sell as you got a percentage of what they made ( 10% springs to mind ) and of course when they recruited and got their own team you made even more, and if you reached level 7 you'd be making £10,000 a month I saw through it quite easily as an example level 1 you level 2 10 sellers you recruit level 3 100 they recruit level 4 1000 they recruit level 5 10000 they recruit level 6 100000 they recruit level 7 1 million they recruit So now you have 1,111,111 people selling basically at the point the whole thing falls over as not enough people not in the scheme to sell to to make any profit. but you had people falling over themselves to sign up and buy the "sample" packs Mostly cleaning products. My mother became an agent for a short while. Her bathroom slowly became stocked with Amway products. Having been brainwashed by the company that this was the route to riches, she invited my wife and me to a presentation to become agents under her. She was a little upset when I saw through it immediately, declined, and explained that the model could not possibly work, as you have above. She was intelligent, but she was poor, so too readily recruited into the fold. Such was the persuasive power of this pyramid selling scheme. Simultaneously, a bloke at work had been recruited by Amway too, so I had the sales pitch bull in both ears extolling the virtues of the latest swish spray-on cleans-itself ceramic sink cleaner, etc, etc. A handful at the top of the pyramid will have made a mint from this.
Difference now is people/youngsters get the sales pitch pumped into their eyeballs every time they pick up their phone.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on May 23, 2022 20:12:53 GMT
Good on her. I came across this type of thing several years ago after a friend asked to borrow £10k for a 'wealth mastery' course. He has the mindset that unless he becomes rich his life will be a failure, and has jumped from one idea to the next with essentially no progress for going on a decade. After a bit of research I came to the conclusion the course was likely a scam and declined. Undeterred by my protestations he said he'd find the money elsewhere. I said I'd go to the free seminar with him before he committed to anything. Needless to say the seminar was like tallsuk described above. I was initially amazed that they were doing this in broad daylight, in a fairly large conference hall in a major city. Hundreds of people were there. But the gurus are careful and clever about how they operate. Very little of what they say is factually inaccurate or impossible, it's generally either basic, freely available information which sounds impressive to a beginner, or specialist areas (e.g. Forex trading) dressed up as something anyone can easily do with some paid guidance from them. The whole thing had a slight cult vibe, with the charismatic preacher leading the flock to the promised land. The people I spoke to didn't come across as complete fools, just blinded from healthy scepticism by an overwhelming desire to better themselves. My reservations were met with accusations of being unambitious and too negative. I have some sympathy. Deciphering between legitimate and scammer isn't always obvious when the latter intentionally mimics the former and the student is uninformed. And there are nuggets of genuine information, so at what point does (very) poor value for money cross the line into being a scam? Also, hardly feel I'm one to talk, I once thought 12% interest with a maximum LTV of 70% was a good idea.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Apr 8, 2022 15:56:24 GMT
BondMason less optimistic on repayments, interim or otherwise, than the recent BDO update: BondMason only held a few Collateral loans, so their view may just be the case for those loans. And a reminder, Collateral wasn't the only platform BM used which is in administration.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Dec 24, 2021 16:47:56 GMT
About 15 years late, I recently watched The Sopranos. Couldn't help having a wry smile at the character of 'Vic the Appraiser' in Season 4, cooking up dodgy valuations for Tony's HUD scam. Wonder if he was a member of RICS?
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Oct 13, 2021 14:46:59 GMT
Does anyone have a source for how many investors were active on the platform at the date of administration?
Tom Straw's witness statement, paragraph 49: "In total the Moneything Platform records 2,494 lenders with a live investment."
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Oct 12, 2021 15:34:50 GMT
Another BondMason update released yesterday:
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Sept 7, 2021 13:23:26 GMT
I'm both an M1 investor and an M2 investor. Can I please ask, what's the change or expection for an M1 investor following the recent legal results? I'm not sure I understand what's really happened. Many thanks. Reads like a pretty terrible outcome for M1 investors to me.
In the Administrators' third progress report they said "Investors under Model 1 are creditors of the Company for the value of their investment." The recent legal ruling seems to have demoted this to "Model 1 Investors’ contractual claims are to be valued in an amount equal to the gross proceeds received by Lendy on the relevant Model 1 Loan."
Given the recoveries on M1 loans have generally been poor, M1 contractual claims are now a fraction of what they were. And as GSV3MIaC points out, the pot for creditors is also now significantly smaller.
Unless the Administrators land the Marshall Island mystery prize of ~£7m, I wouldn't be expecting much back from any M1 loan.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Jul 26, 2021 14:06:05 GMT
As mentioned by ilmoro in the pink pages, the provision fund for the GBBA was pretty much all used up not even covering the Scottish estate loan (#227). As of 30/04/21 the GBBA PF had £10k in it and given the only two remaining loans in the account are this loan and the remnant of #227 then it's not going to have moved since, unless AC have manually topped it up.
If you're in this loan in GBBA2 then you might be okay as that had £600k in the PF on 30/04/21 and doesn't hold nearly so much of this loan. There are more loans than that left including one that is not in default. (Darth ..... with a K) Holdings will be lender specific. True, I stand corrected on that. They are the only two left in mine and I imagine most GBBA accounts will be fairly similar. In any case, there won't be much going into the PF pot and certainly nowhere near enough to cover the loss on this loan.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on Jul 26, 2021 13:45:03 GMT
I'm assuming that all the non-MLA accounts are 'protected' by the provision fund against capital losses.
As mentioned by ilmoro in the pink pages, the provision fund for the GBBA was pretty much all used up not even covering the Scottish estate loan (#227). As of 30/04/21 the GBBA PF had £10k in it and given the only two remaining loans in the account are this loan and the remnant of #227 then it's not going to have moved since, unless AC have manually topped it up.
If you're in this loan in GBBA2 then you might be okay as that had £600k in the PF on 30/04/21 and doesn't hold nearly so much of this loan.
|
|
Brainer
Member of DD Central
Posts: 186
Likes: 323
|
Post by Brainer on May 20, 2021 14:29:07 GMT
Whilst many eagle eyed Col investors will have spotted this already I anticipate others will not have. This was the largest Col loan and unfortunately the auction guide price reflects the now stripped and vandalised nature of the development. Remember this development was nearly completed when Col went into administration. Auction now closed. Looks like one bid at the guide price but went unsold.
|
|