ton27
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Post by ton27 on Oct 10, 2017 16:30:40 GMT
I was in this loan in the MLIA but do not know how much interest I am actually owed.
Given the circumstances I too would have taken a reduction but not of 80%. I have voted No.
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kermie
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Post by kermie on Oct 10, 2017 19:01:16 GMT
I am sympathetic, but given the degree of security (presumably) still available, I do not see why I should throw away 80% of my interest (which, given how large the backlog of capital repayments were for many months, is non-trivial). Option B for me.
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niceguy37
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Post by niceguy37 on Oct 10, 2017 20:40:57 GMT
If it were a case of forcing the surviving borrower to sell their residence I might be more inclined to be sympathetic, but there is still the main security of the hotel, so I voted "B".
Also this loan was restructured, IIRC, to lower the interest rate and also to repay capital first. I then sold off my loan parts, and got my capital, leaving me with just interest outstanding. So when the capital was recently repaid I didn't see it, and my interest has not been compounding. So it was a definite "B" for me.
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tonyr
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Post by tonyr on Oct 11, 2017 11:20:40 GMT
If it were a case of forcing the surviving borrower to sell their residence I might be more inclined to be sympathetic, but there is still the main security of the hotel, so I voted "B". Also this loan was restructured, IIRC, to lower the interest rate and also to repay capital first. I then sold off my loan parts, and got my capital, leaving me with just interest outstanding. So when the capital was recently repaid I didn't see it, and my interest has not been compounding. So it was a definite "B" for me. Yes, capital and interest payments have been mixed up on this loan, so it's not really clear what is what. It isn't just interest that is owed, if matters had progressed normally then my interest that was due two years ago would have been paid by now and there would be capital left. So I don't see this as "well it's just money you never had, you can write it off". Sadly, if past votes are anything to go by, there will be a lot of people who vote A without thinking too much.
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niceguy37
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Post by niceguy37 on Oct 11, 2017 15:19:24 GMT
If it were a case of forcing the surviving borrower to sell their residence I might be more inclined to be sympathetic, but there is still the main security of the hotel, so I voted "B". Also this loan was restructured, IIRC, to lower the interest rate and also to repay capital first. I then sold off my loan parts, and got my capital, leaving me with just interest outstanding. So when the capital was recently repaid I didn't see it, and my interest has not been compounding. So it was a definite "B" for me. Yes, capital and interest payments have been mixed up on this loan, so it's not really clear what is what. It isn't just interest that is owed, if matters had progressed normally then my interest that was due two years ago would have been paid by now and there would be capital left. So I don't see this as "well it's just money you never had, you can write it off". Sadly, if past votes are anything to go by, there will be a lot of people who vote A without thinking too much. When this loan was restructured it was decided to repay capital first rather than the normal arrangement of clearing the interest first, then the balance of the repayment reducing the capital. I presume this was to lighten the burden on the borrower as capital attracts interest but any interest outstanding has not been earning anything. But it does mean that our outstanding interest has not been earning anything for quite a while.
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Post by mrclondon on Oct 11, 2017 19:15:13 GMT
Also B.
Not withstanding the tragic circumstances that have led us to this point, I've acted on business logic. Whilst the business clearly couldn't support the level of debt that it has had over the last few years, it is IMO perfectly capable of supporting a level of debt to repay AC all outstanding funds and to replenish the working capital to a level that permits optimum terms from the suppliers. Its not clear how its proposed to borrow to fund the proposed partial repayment, but seems to imply from outside the business. Would be better IMO to take out new debt against the business premises in place of the (remaining) AC debt / first charge. With a very low LTV 1st charge shouldn't be too difficult to achieve.
I've not looked recently, but at the time of the capital repayment their facebook page implied the business had recommenced trade after only a very few weeks closed.
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trouble
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Post by trouble on Oct 11, 2017 19:42:05 GMT
Also B. Not withstanding the tragic circumstances that have led us to this point, I've acted on business logic. Whilst the business clearly couldn't support the level of debt that it has had over the last few years, it is IMO perfectly capable of supporting a level of debt to repay AC all outstanding funds and to replenish the working capital to a level that permits optimum terms from the suppliers. Its not clear how its proposed to borrow to fund the proposed partial repayment, but seems to imply from outside the business. Would be better IMO to take out new debt against the business premises in place of the (remaining) AC debt / first charge. With a very low LTV 1st charge shouldn't be too difficult to achieve. I've not looked recently, but at the time of the capital repayment their facebook page implied the business had recommenced trade after only a very few weeks closed. The longer they can prevaricate with slowly increasing offers, AC scribe, Vote tendered, vote answered etc etc, the longer the debt doesn't increase (and doesn't need servicing) as there is no interest on interest here, there is just no incentive on the borrower to clear the debt quickly. AC could easily restructure all the outstanding interest onto a term loan at low LTV. I foresee the security being called up to bring the matter to a head.
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mikes1531
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Post by mikes1531 on Oct 12, 2017 4:10:43 GMT
When this loan was restructured it was decided to repay capital first rather than the normal arrangement of clearing the interest first, then the balance of the repayment reducing the capital. I presume this was to lighten the burden on the borrower as capital attracts interest but any interest outstanding has not been earning anything. But it does mean that our outstanding interest has not been earning anything for quite a while. Another reason for treating payments as capital rather than interest is the benefit to Taxpaying investors -- interest payments are income that is taxable, capital repayments are not. Also, at the time of the restructuring, if there was a concern that the loan might ultimately not be recovered in full, it would be better from a taxpayer's point of view to have the shortfall be interest rather than capital. Put another way, it would have been better to have £100 of interest unpaid at the end of the day than to have received that £100 of interest and have a £100 capital loss. That's because most taxpayers don't pay Capital Gains Tax, so having a £100 capital loss would not save them any tax, whereas having £100 less interest income would mean they would pay less tax. Since then, of course, the tax rules have changed and AIUI P2P capital losses can be used to offset P2P interest income, so the previous problem with CGT has gone away. Please note that I am not qualified to express opinions or give advice on this subject.
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Post by jevans4949 on Oct 12, 2017 10:42:19 GMT
I have voted B, and suggested that the borrower could be asked to make staged payments over a couple of years, retaining the existing charge over the property.
Cruel though it may seem to say so, had it not been for the insurance policy, I doubt whether this loan would ever have been repaid otherwise.
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11025
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Post by 11025 on Oct 12, 2017 12:40:11 GMT
B also ,
I am not adverse to cutting some slack , but they need to improve their offer somewhat
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Post by df on Oct 12, 2017 18:01:49 GMT
I abstained. I wasn't sure what is best and my holding in this loan is too small to make much difference in the outcome, but my first thought was to vote A. Generally in such situations I prefer the capital to be returned asap so I can reinvest it in something else rather than wait for long recovery process to be completed.
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Post by jevans4949 on Oct 12, 2017 19:29:58 GMT
I abstained. I wasn't sure what is best and my holding in this loan is too small to make much difference in the outcome, but my first thought was to vote A. Generally in such situations I prefer the capital to be returned asap so I can reinvest it in something else rather than wait for long recovery process to be completed. The capital HAS been returned. The question is whether you are happy with just 20% of the interest you are due.
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Post by df on Oct 12, 2017 19:52:48 GMT
I abstained. I wasn't sure what is best and my holding in this loan is too small to make much difference in the outcome, but my first thought was to vote A. Generally in such situations I prefer the capital to be returned asap so I can reinvest it in something else rather than wait for long recovery process to be completed. The capital HAS been returned. The question is whether you are happy with just 20% of the interest you are due. I probably didn't read it properly and didn't notice capital return as I had very little stake there. In this case I should have voted B, but it looks like B is very likely to be the result anyway.
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gibmike
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What is a cynic? A man who knows the price of everything and the value of nothing.
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Post by gibmike on Oct 12, 2017 20:09:22 GMT
I voted B as the offer is clearly a "first offer" to see where the land lies.
As AC have received the offer I doubt they could progress without allowing for a vote which they know will be rejected.
The next step will hopefully be to take the situation to a more fairer conclusion which might be either a new, smaller loan or a slighter larger chunk of the interest. I would probably vote for a 50% return of interest.
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mikes1531
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Post by mikes1531 on Oct 14, 2017 3:23:26 GMT
I voted B as the offer is clearly a "first offer" to see where the land lies. As AC have received the offer I doubt they could progress without allowing for a vote which they know will be rejected. The next step will hopefully be to take the situation to a more fairer conclusion which might be either a new, smaller loan or a slighter larger chunk of the interest. I would probably vote for a 50% return of interest. I have voted for B as well, and I hope gibmike is correct. But I've seen enough AC votes go by that I'm not convinced the results always come out as expected. In this case, there may be some who see the offer as a way to wind up the loan and will vote A in order to accomplish that. We'll find out the result shortly, and we'll also find out what the voter turnout was. Will it be more than 20%?
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