kermie
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Post by kermie on Nov 9, 2017 19:01:13 GMT
I've waited many months; I can wait some more. B. Borrower should bite the bullet, refinance, and ease the cashflow situation. As mikes1531 says, the borrower used to be able to service the full AC loan, so there must be some wiggle room to service a new much smaller loan - and I'd venture that it would be at a much reduced rate, too. |
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groon
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Post by groon on Nov 9, 2017 19:54:15 GMT
It's a finely-balanced decision.
I'm inclined to vote A just to draw a line under the whole saga. I also feel some sympathy for the widow of the borrower and I tend towards the view that the proposed return on my investment, while not what I had thought it would be, is probably satisfactory.
But I don't like the signal that this may send to other defaulting borrowers, for whose situations I may have less sympathy. And I share the annoyance of others that it appears that we have to keep voting until we give the right answer. The way this has been handled actually gives me a perverse incentive to reject the offer, because experience tells me that that is likely to produce a better offer. If the present offer had been made up front, I think I'd probably have accepted it but now I feel I've been taken for a bit of a ride.
I find the discussion on this forum very helpful but I'm still unsure which way I'm going to swing. Let's hear some more views please.
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Post by mrclondon on Nov 9, 2017 20:01:15 GMT
Voted B again, and sorry, that is partly a selfish pov. My view is AC's management of any haircut to lenders should honour the interest accrued BEFORE the loan terms were reorganised in full, and apply any haircut to those lenders who continued to hold the loan once it became in effect a capital only repayment loan. (Those lenders should have had minimal expectations of ever receiving the acrued interest, as it was clear from the supporting financials at the time the business couldn't support the level of debt).
I sold out of the loan at a small discount the moment the loan reopened for trade after the reorganisation (zero regrets re that decision).
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markb
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Post by markb on Nov 9, 2017 22:29:09 GMT
The widow wouldn't need to sell up. AC have already offered to refinance the loan. And the unsecured creditors can't force her to sell. Why is she trying to prioritize paying them over paying us? because the ongoing business will rely on suppliers Sorry, I phrased that meant-to-be-rhetorical question poorly. I meant that a key benefit of participating in secured lending is that if there turns out to be not enough cash to go around, then secured creditors (mostly) get paid before unsecured creditors - so why would any borrower ever expect secured creditors agree to be short-changed, just so that the unsecured creditors can be paid in full instead? In this case, there is enough cash to go around - e.g. simply accept the offered refinance, onto a much smaller loan than the one taken out initially. But instead the borrower seems to have a dream of owning a debt-free viable business asap, and the fastest way to achieve that is to chance their arm by asking for their creditors to gift them a windfall of tens of thousands of pounds. However, as subsequent posters have intimated, the unsecured creditors would obviously say "no" (and perhaps have done so already) - but we seem to be perceived as potentially a soft touch, hence having now been asked to gift them 3 different amounts over the past few weeks.
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pikestaff
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Post by pikestaff on Nov 10, 2017 0:45:56 GMT
In this case, there is enough cash to go around... No there isn't. See p2pindependentforum.com/post/227505/thread which only confirms what was said in the voting request. The only way the widow could pay us out in full is by either (1) selling up or (2) stiffing the unsecured creditors in which case she won't have a business and she will still have to sell up.
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markb
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Post by markb on Nov 10, 2017 1:39:48 GMT
Thanks for flagging this evening's update from AC - now that they've classified this loan as officially "repaid" (which is an unrelated issue), usually I don't notice their updates until someone on this forum mentions them.
This thread is on the white pages, so it's difficult to discuss the contents of that update, but I find the word "any" extremely relevant. That seems to me to be a drastic climb-down by AC versus the position that they described a fortnight ago. If that's an accurate reflection of the current situation, then I concur with some of the previous posts - our vote probably won't help the widow either way, it'll simply change which creditors end up eating the losses - so probably it'll be best for her in the long run if she faces up to that now, and sells the building.
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Post by valerieb on Nov 10, 2017 12:29:10 GMT
Voted B - feels a bit mean but I think there are worthier recipients of our charity.
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sl75
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Post by sl75 on Nov 10, 2017 13:29:09 GMT
... I will have to weigh up my own instinct against that of the collective lender base over the next days before committing my vote. I think it's a finely balanced choice. The vote itself already provides the mechanism for weighing up your instinct / preferences against those of the collective lender base; each of us only needs to base our decision on our own preferences, rather than what we pre-suppose the preference of "the collective lender base" might be.
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Post by Butch Cassidy on Nov 10, 2017 14:02:30 GMT
... I will have to weigh up my own instinct against that of the collective lender base over the next days before committing my vote. I think it's a finely balanced choice. The vote itself already provides the mechanism for weighing up your instinct / preferences against those of the collective lender base; each of us only needs to base our decision on our own preferences, rather than what we pre-suppose the preference of "the collective lender base" might be. Not if I were owed 51% of the outstanding interest; my vote would be decisive, irrespective of what anyone else voted, so I feel obligated to consider their position as well as my own when deciding how to vote 
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Post by bracknellboy on Nov 10, 2017 14:13:09 GMT
voted A.
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mikes1531
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Post by mikes1531 on Nov 11, 2017 5:04:38 GMT
I voted A. 77.5% of 12% is around 9.3%, which is a decent return. 77.5% of 12% might be 9.3%, but that isn't the real-world situation here. The investors in this loan wouldn't achieve a 12% return even if the borrower settled the accrued interest at 100p/£ tomorrow. That's because of the way the loan was restructured -- all payments received were treated as capital repayments, and that meant the interest accrued would have been less every succeeding month even if the payments weren't even enough to cover the interest that had accrued in the previous month. No interest accrued on the growing pile of accrued interest so there was no compounding, and the actual payment of interest would have been deferred well into the future even if the borrower had been able to keep to the restructured payment plan. I haven't tried to put the cash flow shown on this loan's Repayments tab into Excel and see what the XIRR would be. (Perhaps someone else would care to give that a try.) But I'd be surprised if the result would be as much as 9.3% before the settlement of remaining accrued interest at 77.5p/£ is factored in. I'm voting B because AC investors have made significant concessions to this borrower already and we shouldn't be asked to make further concessions.
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Post by mead187 on Nov 11, 2017 9:14:59 GMT
I voted A
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elsee
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Retired:D
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Post by elsee on Nov 11, 2017 9:43:50 GMT
I invested in this when it was in severe trouble just because I wanted to support the business. The loan exactly fitted what I saw as true P2P lending. I didn't really expect to get any interest when ?I invested so I was happy to vote A.
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trouble
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Post by trouble on Nov 11, 2017 14:02:43 GMT
I invested in this when it was in severe trouble just because I wanted to support the business. The loan exactly fitted what I saw as true P2P lending. I didn't really expect to get any interest when ?I invested so I was happy to vote A. Can I ask, did you just expect a return of your capital and nothing else as that doesn't sound like a well thought out investment strategy, more a charitable/philanthropic decision
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Post by df on Nov 11, 2017 23:28:21 GMT
I voted A. 77.5% of 12% is around 9.3%, which is a decent return. 77.5% of 12% might be 9.3%, but that isn't the real-world situation here. The investors in this loan wouldn't achieve a 12% return even if the borrower settled the accrued interest at 100p/£ tomorrow. That's because of the way the loan was restructured -- all payments received were treated as capital repayments, and that meant the interest accrued would have been less every succeeding month even if the payments weren't even enough to cover the interest that had accrued in the previous month. No interest accrued on the growing pile of accrued interest so there was no compounding, and the actual payment of interest would have been deferred well into the future even if the borrower had been able to keep to the restructured payment plan. I haven't tried to put the cash flow shown on this loan's Repayments tab into Excel and see what the XIRR would be. (Perhaps someone else would care to give that a try.) But I'd be surprised if the result would be as much as 9.3% before the settlement of remaining accrued interest at 77.5p/£ is factored in. I'm voting B because AC investors have made significant concessions to this borrower already and we shouldn't be asked to make further concessions. Even if the real return is below 9% I would prefer to get it settled sooner rather than later. However, I think B will get more vote than A.
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