Brainer
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Post by Brainer on Sept 4, 2020 18:13:39 GMT
Not by my reading of term 6.2.5:
6.2.5 Net proceeds of sale of Assets shall be used to settle amounts due in the following order:
1) Principal amount of Loan which was funded by, and is repayable to, the Investors (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested); 2) Direct costs incurred by FundingSecure through the setting up and the administration of the Loan including, but not limited to, storage costs, referral fees and valuation fees up to the date of sale; 3) Interest due to the Investors up to the date of sale (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested); 4) Administration fees due to FundingSecure not recovered through clause 6.2.5(ii) above; 5) The balance (if any) will be returned to the Borrower.And seemingly not from FundingSecure's own understanding of their T&Cs as discussed here, and which I quote below: It's an understandable 'reading' but not one I share. I think the 5% stands. Much more tellingly and having sought legal opinion, CG&Co thinks the 5% stands. This is being challenged with a court decision pending, so time will tell. That decision may turn out in favour of lenders, but IMO it won't. (I'm not even convinced it's a good idea that it should.) That's why, again IMO, efforts would be better spent trying to get CG&Co's 2.5% (+vat+exp's) deducted from that 5% at the FS level rather than charged direct against lenders at the loan level which, if you accept the 5% fee is in play, I think is just plain wrong. If the loan book realises 50% of the stated value at the onset of administration, that 5% would be worth c. £2.0m - that should be sufficient to cover CG&Co's fees and then some. (Direct 3rd party loan disposal costs - auctioneers, valuers, legal, etc - would still come directly off the top of individual loan realisations. It's 'only' CG&Co's direct costs which would be deducted from that 5% pool.) Secured Creditors - eg current directors and the like - may not appreciate the 'FS pot' being eaten into in that manner, but ... Probably also worth keeping in view that anything FS committed to 'conversationally' isn't being honoured by CG&Co. For example, lenders in those loan with imperfect charge arrangements were supposedly protected from capital losses with FS committing to 'stand behind' them. That's no longer happening. (Again, I think that's wrong and could / should be covered by the overall FS 5% pot and if lenders in those loans chose to pursue that, I'd be supportive of that action.) I think you are underselling it as "committed to 'conversationally'". I fully believe that FS themselves saw the repayment priority to be as shown in my post above. There are other instances of loans where FS said that in line with the T&Cs they would take no fees as investor capital ranked ahead. IIRC CG dismissed these as one-off gestures in the last administrators report but that was not my understanding. As you say, the court will decide in the end.
Should the 5% stand I agree with the rest of your post, and I hope that is where efforts will be directed at that point. Also worth noting that if, as it now seems, CG are taking 5% of the loan value from here onward there will likely be more than c. £2.0m in the pot by the end, possibly a lot more. If anyone has an idea of how much of the loan book is remaining, maybe we can get a better estimate.
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Brainer
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Post by Brainer on Sept 4, 2020 13:12:05 GMT
I don't understand why you are saying "as they are entitled to". FundingSecure's Terms and Conditions state: "8.3 FundingSecure does not charge Investors any fees or commissions." That's pretty clear to me. It's not a fee against Investors / lenders. It's a defaulted loan administration fee against the borrower. The reason it impacts Investors / lenders here, is because it ranks higher-most in the loan redemption waterfall, and there were insufficient returns to cover everything. If, in this case, the land had sold for the <ahem> Valuation amount, there would have been sufficient to cover the FS 5% default loan administration fee and then lender capital in full and most, if not all, interest, I think - except ... CG&Co. would still have taken their 2.5%+vat+exp's directly from lenders returns because - whether they (the CC) were fully aware of it or not - that is what was agreed with the Creditors Committee. On a full capital payout, CG&Co's nett fees would have been over £11k. As FS and CG&Co. are arguably the same entity - inasmuch as CG&Co need FS at a company level to generate revenues, so that CG&Cos fees for operating FS at that 'company level' are covered - it starts to become apparent why CG&Co / FS chose to exercise their right to charge 5% on the full loan amount, rather than just the actual redemption amount. Taking fees against the significantly lower sum would have returned a sum to CG&Co which would have been unlikely to cover their costs on this one. When you hold all the cards, you can always deal yourself a winning hand.... Not by my reading of term 6.2.5:
6.2.5 Net proceeds of sale of Assets shall be used to settle amounts due in the following order:
1) Principal amount of Loan which was funded by, and is repayable to, the Investors (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested); 2) Direct costs incurred by FundingSecure through the setting up and the administration of the Loan including, but not limited to, storage costs, referral fees and valuation fees up to the date of sale; 3) Interest due to the Investors up to the date of sale (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested); 4) Administration fees due to FundingSecure not recovered through clause 6.2.5(ii) above; 5) The balance (if any) will be returned to the Borrower.And seemingly not from FundingSecure's own understanding of their T&Cs as discussed here, and which I quote below:
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Brainer
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Post by Brainer on Jul 9, 2020 13:50:47 GMT
How bloody much ! For all 3 ? Yet another appallingly managed project by FS - and don't tell me - there is no audit trail for the money? Something very badly wrong here and I think yet again investors have been shafted. The new buyers seem a couple chaps who have just set-up a company for this project so good luck to them (assuming no connection with the original owner) But if one house is nearly finished this one is somewhere between totally misdescribed by FS or bargain of the century! Looks like a 40% capital haircut for the main loan and yet another 100% wipeout for the supplementary loans? Yet another one to add to my expect 100% losses - how the hell can FS lose so much money with "secure" lending? Unbelievable! The updated valuation report (after the house sizes were increased and garages added) from June 2018 put the value of each house at £700k each on completion, so a GDV of £2.1m.
That same report had the cost complete at £400k, and a not insignificant amount of work was done after this judging from the photos contained in the report.
Conclusion: either that report was negligent, or there's something we're not being told, or the buyers have got the bargain of the century as you say, in which case the Receivers have to be questioned for pricing it so cheaply. The speed of the sale raises some doubts for me too, the new buyers were busy setting up the SPV just a few weeks after marketing started so were presumably fairly confident they were getting the project. Maybe this is what the borrower is contesting?
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Brainer
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Post by Brainer on May 30, 2020 1:47:30 GMT
Appreciate if someone could lead me into right direction with this loan Copied and pasted from FS site. So there is £0 repaid /returned, but why Actual return shows... well, what is shows ? Did someone get some returns other then investors. Sorry if that came as a lame question just slowly trying to organize my FS mess . Thanks Investment Rate Repaid Interest paid Days active Actual return £50.00 15% £0.00 £0.00 621 -58.8% pa 5323418941 £25.00 15% £0.00 £0.00 601 -60.7% pa 3187612832 The 'Actual return' is per annum. Both loan parts were active for over a year, so it's effectively saying the 100% loss was spread over 621 and 601 days. To get the percentages, it's 365/621 = 58.8% and 365/601 = 60.7%.
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Brainer
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Post by Brainer on May 27, 2020 17:46:15 GMT
I believe you have the wrong loan, adrian77, you appear to be talking about the tower block in New Brighton.
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Brainer
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Post by Brainer on May 27, 2020 17:37:25 GMT
Update was added today, 3apr2020, for the part payment made on 28 feb.
If we receive a similar amount again for the last flat and freehold, it's about 92% return for the remaining capital left in the loan minus CG + FS fees. No interest likely according to receivers. So for whole loan, somewhere between 92%-100% capital returned. Not quite a Dell Boy I've had worse days but near 100% capital return here is like finding a valuable watch.
Update says "A total of £215,075.76, capital only, has been repaid to all investors".
So, 215,075.76 / 234,924.78 = 91.55% returned to Investors so far. But seem to have received only 83.22% so far (4 instalments from 29/09/17) ?
Anyone received more than that ?
The £215,075.76 relates to the capital repaid from the sale of the penthouse flat and some other funds that FS held in relation to this loan (partial repayment D). The £234,924.78 is the remaining capital after that partial repayment, with one more flat and the freehold still to be sold.
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Brainer
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Post by Brainer on Apr 22, 2020 2:03:21 GMT
In which we (I anyway) learn that they accept work from Mike Ashley, who it seems to me bends every rule going. And that they have mis-stated their own figures by £10M ! Spivs, and either incompetent or villains. (actually both)
I think I'm decided. I'm confident of most of my investments in AC, but if the platform goes and RSM get their mitts on it then I'll be shafted
In a similar situation. I've recently sold out of all my loans on a particular platform. I had reasonably high confidence in all of them even accounting for coronavirus, but I had a lot less confidence in the platform surviving and have absolutely zero desire to be fleeced by another administrator.
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Brainer
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FundingSecure (FS) in Administration
FS 100% losses
Apr 20, 2020 18:39:06 GMT
Post by Brainer on Apr 20, 2020 18:39:06 GMT
Whats happened to that Raj Kumar guy who bought a stake in FS a couple of years ago? I mean, what due diligence did he do before he bought in? He must have been completely hosed? (I'm not following this closely so could be completely wrong!!)
He has debentures and the new 5% fee will see him suffer no loss. A legal challenge is currently being worked up.
I thought it slightly odd when the administrators said certain parties had waived their potential rights to claims on the loan proceeds due to the possible issues with the trust structure. I assumed they were talking about former directors such as Raj and wondered whether I'd just seen someone do a genuinely decent thing in the P2P world. I now wonder if this was done under the proviso that the administrators start charging this 5% fee, as I don't believe it was being charged by the administrators initially. Or even if not done under that proviso, whether Raj and co just didn't want to slow down the process of siphoning off their unjustified 5%.
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Brainer
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Post by Brainer on Apr 20, 2020 18:26:14 GMT
Was this repaid via sale? I don't agree with the 5% fee being taken in any circumstance but especially so if the loan was repaid by the borrower and not via a sale, given the term they appear to be using specifically states the fee is from the "sale of the Asset".
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Brainer
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Post by Brainer on Apr 15, 2020 1:20:54 GMT
Houses were supposed to be worth £670k each on completion and given "the first property is essentially complete", I'd agree the figures being mooted are far too low.
I'd be interested to see what the QS report mentioned in the 28/08/19 update said about the work required to complete. From the minutes of the first CC meeting:
3 Where there are part complete developments the Administrators can look for bridging loans on appropriate terms but without being required to do so and without taking on any personal liability for such funding arrangements.
Is this still the case, Mucho P2P? If the GDV of £2million is even remotely close then we could spend over a £1million finishing these and still get a better outcome than the prices mentioned.
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Brainer
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Post by Brainer on Apr 2, 2020 13:27:14 GMT
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Brainer
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Post by Brainer on Mar 4, 2020 15:20:14 GMT
I notice that no interest was paid with the recent partial repayment, but the 'interest to date' figure on the website now only shows the accrued interest from the remaining capital, so the accrued interest from the partial repayment has disappeared from view.
A moot point if this doesn't repay capital in full but if it does then we might need to remind the administrators about this missing interest.
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Brainer
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Post by Brainer on Mar 4, 2020 14:59:49 GMT
Breaking news from the BBC:
17:36 BreakingCovid-19 fatality rate is 3.4% - WHO
The head of the World Health Organization (WHO) says about 3.4% of those confirmed to have been infected with the new coronavirus have died - which is much higher than the fatality rate for seasonal flu, at less than 1%.
Also:
Health experts believe the evidence from China suggests that Covid-19 is not generally transmitted by people who have no symptoms (flu can be), and that in general the virus does not transmit as efficiently as flu.
However the proportion of people who become severely ill or die from Covid-19 is higher than with flu. The mortality rate at the moment from Covid-19 is around 3.4%, whereas with flu it is under 1%. This may change once results from serological studies come in.
I think that is a good news/bad news storyline.
If 3.4% holds out that is higher than previous estimates, but I wonder if it is skewed by the Wuhan data where the majority of deaths have occurred. The lack of asymptomatic transmission is good news for containment measures.
Could potentially explain the Wuhan data, on top of health services being overwhelmed.
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Brainer
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Post by Brainer on Feb 6, 2020 14:41:02 GMT
If it turns out the trusts aren't correctly established then FS never was a proper P2P platform, so where would that leave the FCA for giving them full authorisation? To use one of Andrew Baileys favorite words that would be 'unfortunate'. It would be another failure on their part but their immunity from legal action would remain in place. So we would be in a similar situation to Collateral, with our only method of recourse being to complain to the FCA, then escalate to the FOS who will hopefully encourage the FCA to voluntarily compensate us for their gross incompetence and misleading/inaccurate statements?
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Brainer
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Post by Brainer on Feb 6, 2020 3:17:36 GMT
It seems to have paid 10% as advertised with no Admin deduction. That looks like an error on the web site. In one place it says actual return 10% , in another it says 9.8% My return was minus 0.125%+VAT as expected for a loan which repaid within its term.
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