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Post by queenvictoria on Sept 12, 2019 10:50:14 GMT
TBH surely the main problem stems from the overinflated valuation initially. Otherwise the exit would be easy. Can't see a happy ending for this, the works are done and the site is run, all of the costs which we end up paying for, or we just take a hit and get rid of it. See too many parallels with Lendy here, many loans going bad plus no new business being written to generate fees. I agree that the happiest of endings (all our capital back plus all our interest paid) is unlikely. However, we get nothing if left to the clown borrower so the administration route has to the way to go. After that, ie whether to invest in the building and get it occupied or whether to sell as is, is a question for the administrator to explore. At least we have some movement at long, long last.
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wuzimu
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Post by wuzimu on Sept 12, 2019 11:55:32 GMT
Looking at CH I see a recent entry transferring ownership of the borrowing company from the guarantor to a BVI registered company owned by the guarantor.
This looks like the start of moves by the guarantor to frustrate lenders recovery, and may well be what has prompted the immediate appointment of Moorfields as administrators.
Of course its been clear for a year this was going to end with an administration, lets hope good title to the security exists and the valuation document affords some indemnity for the inevitable shortfall on recovery. Without that the recovery from the site can't be north of £1m.
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bramhall17
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Post by bramhall17 on Sept 12, 2019 12:00:49 GMT
The original valuation does seem on the face of it to compromise an exit strategy where lenders get their capital and accrued interest back. However, based on MT's admirably comprehensive update it seems clear that credibility has been lost and a salvage operation is once again the best we can hope for.
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Post by GSV3MIaC on Sept 12, 2019 12:43:54 GMT
If the borrower was hoping to whip up support from lenders on the forum, they have badly misjudged the prevailing climate .. just as they have badly misjudged the work needed, and the gullibility of the platform (though, to be fair, the platform has been more gullible than I would have been). I'd have pulled the plug when the first promise (wasn't that to raid some pension pot to pay the interest) was broken.
Frankly borrowers who deal with/via/hide behind BVI, Switzerland, Gibraltar, etc etc are probably best handled with a long pole.
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james100
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Post by james100 on Sept 12, 2019 13:51:06 GMT
If the borrower was hoping to whip up support from lenders on the forum, they have badly misjudged the prevailing climate .. just as they have badly misjudged the work needed, and the gullibility of the platform (though, to be fair, the platform has been more gullible than I would have been). I'd have pulled the plug when the first promise (wasn't that to raid some pension pot to pay the interest) was broken.
Frankly borrowers who deal with/via/hide behind BVI, Switzerland, Gibraltar, etc etc are probably best handled with a long pole.
You forgot Panama.
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Post by df on Sept 12, 2019 14:10:14 GMT
TBH surely the main problem stems from the overinflated valuation initially. Otherwise the exit would be easy. Can't see a happy ending for this, the works are done and the site is run, all of the costs which we end up paying for, or we just take a hit and get rid of it. See too many parallels with Lendy here, many loans going bad plus no new business being written to generate fees. As with most failed loans (across p2p platforms) when it comes to the point of selling security we discover that the value of asset was overinflated. Otherwise the loans wouldn't fill, can't imagine many punters for advertised 100%-200% LTV.
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michaelc
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Post by michaelc on Sept 12, 2019 14:56:00 GMT
I have a small amount in this but have I missed something? M00r*****s were the independent monitor but now they've been won the Administration buisness too? I'm sure there's nothing wrong about that since I'm sure others following the loan more closely would have cried foul but perhaps someone could assure me and others about this?
Also if its just a few more weeks until opening? I guess its always been just a few more weeks? I do wonder though if MT became progressively stronger so that the borrower was under no illusion this was going to happen (and happen now) or did they just leave it for a long while then suddenly whack them with the default?
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star dust
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Post by star dust on Sept 12, 2019 15:28:12 GMT
I have a small amount in this but have I missed something? M00r*****s were the independent monitor but now they've been won the Administration buisness too? I'm sure there's nothing wrong about that since I'm sure others following the loan more closely would have cried foul but perhaps someone could assure me and others about this? Also if its just a few more weeks until opening? I guess its always been just a few more weeks? I do wonder though if MT became progressively stronger so that the borrower was under no illusion this was going to happen (and happen now) or did they just leave it for a long while then suddenly whack them with the default? Although I am sure it would be best practice if all platforms had conflict of interest procedures together with tendering processes for external contracts, even better still if these procedures were available for perusal; in practice as small private companies there is no need* for any of them to do so. Furthermore, I'm not actually aware, although more than happy to be corrected, that any of them do.
I think Moorfields are on the more reasonable priced end of administrators and I'm sure have some advantages as far as MT (and hopefully lenders) are concerned in that they have administration experience in this field, have been utilised by MT before (therefore are known and performance can be assessed on evidence), and secondly I would think being pre-familiar with this loan in terms of monitoring it might actually be a big advantage and give them a good head start as administrators. I imagine all administrators would have their own conflict of interest procedures (presumably in terms of legal requirements for insolvency practitioners) and will take any action required. Over on Lendy, for example, RSM are busy reassigning loan administration tasks among their personnel to avoid conflicts there.
Disclaimer: I am not and never have been in this loan.
In Edit: * Actually maybe it is part of FCA regulation requirements but somehow I doubt it, again happy to be corrected.
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averageguy
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Post by averageguy on Sept 12, 2019 18:35:26 GMT
I have a small amount in this but have I missed something? M00r*****s were the independent monitor but now they've been won the Administration buisness too? I'm sure there's nothing wrong about that since I'm sure others following the loan more closely would have cried foul but perhaps someone could assure me and others about this? Also if its just a few more weeks until opening? I guess its always been just a few more weeks? I do wonder though if MT became progressively stronger so that the borrower was under no illusion this was going to happen (and happen now) or did they just leave it for a long while then suddenly whack them with the default? With works to satisfy building regs still not completed despite promises to the contrary, its not really just a few weeks from opening unless pigs fly
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78
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Post by 78 on Sept 12, 2019 19:53:28 GMT
I personally explained to Sophie before the additional advance the detailed problems with these loans that had not been revealed to lenders. I placed this on record with emails on 18th and 22nd December 2017.
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ptr120
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Post by ptr120 on Sept 12, 2019 20:20:18 GMT
I personally explained to Sophie before the additional advance the detailed problems with these loans that had not been revealed to lenders. I placed this on record with emails on 18th and 22nd December 2017. Would you care to share details? I agree that there are some aspects that I fell should have been foreseen.
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hazellend
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Post by hazellend on Sept 12, 2019 20:43:38 GMT
Another nail in the coffin of my P2P journey. I’ve still not fully got my head around the valuation con that seems so rife. Are the initial values incentivised to give massively overvalued prices. We have seen it again recently with the failed to fill hotel in the amazon depot loan on MT
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78
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Post by 78 on Sept 12, 2019 20:51:51 GMT
If anyone has cause to complain or take legal action in this case they know to seek disclosure of the emails received on those dates. I also do not believe that if lenders are told that a loan has a first charge on a property a subsequent loan should share that security without the consent of the first lenders.
There were many reasons:-
1. My understanding was that the planning consent covered only 800sm on the 1st and 2nd floors + existing restaurant but the intention was to change use on 3,437sm not 800sm.
2. The planning consent may not be capable of implementation as instead of the 800sm conversion part of the first floor of the property was let (to an associated company on a long lease) as offices (without change of use to offices receiving planning consent)? This long lease of part of the premises could hurt the value of the property (the valuation was based on full vacant possession which may not be available).
3. The HSE hazardous materials notice not disclosed to the valuer.
4. The requirement (on the planning consent) to obtain a market licence, has this been obtained?
5. The caveats in the valuation in particular the failure to notify the hazardous materials notice and that the valuation was subject to several things see for example valuation...IMPORTANT ISSUES
6. Previous insolvency history of related parties.
There was a negative pledge at clause 6.1 of MT mortgage yet 3 more separate companies now have subsequent charges over the property. Did MT consent and not inform lenders of these additional charges?
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hendragon
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Post by hendragon on Sept 16, 2019 9:49:38 GMT
This loan does make me ask where the line between allowing the borrower to execute an exit strategy and allowing the borrower to pre-empt recovery procedures, might be. I also wonder, in this case, if an "optimistic" valuation emerged during the lifetime of the loan the forbearance would be a strategy with little to lose. Either way it does not present a pretty picture.
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78
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Post by 78 on Sept 16, 2019 18:30:24 GMT
The Valuation report stated:-
"We have also been provided with an Agreed Occupation Schedule which states the agreed rental income to date is £513,390 per annum (including the car park). Our valuation is based on the agreed rental income to date.
and
Solicitors should formally verify the proposed rental income i.e £514,000 per annum (rounded) is correct. "
Did MT solicitors check the signed leases? If they did not or the leases do not total about £513,000 then the valuation report which was based on those supplied figures was worthless.
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