Monetus
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Post by Monetus on Jun 12, 2018 12:30:25 GMT
Morning, Given that the administrator yesterday determined that Collateral lenders would be classified as creditors to the business and that platform data may no longer be available, this places Collateral lenders in a somewhat difficult position. While this is not our concern, we do have considerable sympathy for lenders involved and we have been considering what practical help we may be able to provide. We have made contact with an insolvency practitioner that may be prepared to act on behalf of any individual lenders to give them a collective voice. While they would not be the IP of course, since one has already been appointed, they are familiar with the P2P set up as they have acted for us before and they are an experienced administrator themselves. We have sent them some information and they are currently reviewing this to assess whether they can assist. In the meantime, if any lenders are interested in this type of solution, please let me know. Kind regards, Ed Really appreciate this Ed and thanks for your assistance. The outcome of this case is clearly going to have wide-reaching implications to the P2P industry as a whole and I'm glad for your offer of support.
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11025
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Post by 11025 on Jun 12, 2018 12:32:19 GMT
Morning, Given that the administrator yesterday determined that Collateral lenders would be classified as creditors to the business and that platform data may no longer be available, this places Collateral lenders in a somewhat difficult position. While this is not our concern, we do have considerable sympathy for lenders involved and we have been considering what practical help we may be able to provide. We have made contact with an insolvency practitioner that may be prepared to act on behalf of any individual lenders to give them a collective voice. While they would not be the IP of course, since one has already been appointed, they are familiar with the P2P set up as they have acted for us before and they are an experienced administrator themselves. We have sent them some information and they are currently reviewing this to assess whether they can assist. In the meantime, if any lenders are interested in this type of solution, please let me know. Kind regards, Ed Ed , Great idea , thanks 
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Steerpike
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Post by Steerpike on Jun 12, 2018 12:33:12 GMT
IMO the most likely outcome of bringing in more fee earners and mounting legal challenges will be to reduce the number of pennies in the pound that we will get and increase the time it will take.
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11025
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Post by 11025 on Jun 12, 2018 12:42:01 GMT
IMO the most likely outcome of bringing in more fee earners and mounting legal challenges will be to reduce the number of pennies in the pound that we will get and increase the time it will take. I don't think I am alone in feeling like we haven't got a level playing field and any input from people experienced in this industry is welcome
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Post by Butch Cassidy on Jun 12, 2018 12:59:17 GMT
IMO the most likely outcome of bringing in more fee earners and mounting legal challenges will be to reduce the number of pennies in the pound that we will get and increase the time it will take. Whilst I agree in principle with your sentiment if FCA/BDO are prepared to pull investors trousers down to fund their own vanity & lavish lifestyles & think that they will go unchallenged then they have seriously underestimate the depth of feeling & latent ability to create resistance within the diverse Collateral lender pool & with the support of the wider P2P family (many thanks to MoneyThing for their proactive offer of assistance) they will be in for a very nasty surprise.
I am prepared to wait & see what 22/6/18 BDO update brings but unless there's a significant change of direction & more positive progress then I think investors will have to become more proactive to protect their position.
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11025
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Post by 11025 on Jun 12, 2018 13:11:29 GMT
Strangely enough , I have just had an email update back from Action Fraud , I opened a case at the end of February when we were left in the dark , I left it running as I was unsure where things were ultimately heading ,
"Please be assured that we have not closed your report and it will continue to be reviewed against new
information received"
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victors
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Post by victors on Jun 12, 2018 13:15:10 GMT
I agree with Butch.
Let's wait and see what is forthcoming on 22nd. It's only 10 days away and it may clear up some othe outstanding questions that we need answering.
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averageguy
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Post by averageguy on Jun 12, 2018 14:29:33 GMT
I agree with Butch. Let's wait and see what is forthcoming on 22nd. It's only 10 days away and it may clear up some othe outstanding questions that we need answering. Seems sensible ..but no harm in the meantime to tentatively explore other avenues
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Monetus
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Post by Monetus on Jun 12, 2018 15:29:49 GMT
Some choice moments from the Collateral terms and conditions that we agreed too... . If only they were actually regulated. Sigh. What a mess we've been left in....
“You acknowledge that lending activities through the Platform are authorised and regulated by the Financial Conduct Authority. Reference Number 656714”
“You acknowledge and confirm that when you lend money through the Platform you are lending to a Borrower via asset backed lending and are not lending money to either the Company or any member of Collateral or Collateral Security Holdings. Collateral’s principal duty is to perform an administrative role in matching borrowers and lenders and in facilitating payments, collection of sums due and onward distribution of funds”
“All client money held in the Client Money Account is held in a segregated bank account and is recognised as client money.”
“Where Collateral Security Holdings holds security in your favour (on foot of the loan you have made) that reasonable efforts will be made by the Company to recover any outstanding monies on your behalf and/or enforce any security where necessary.”
“If Collateral or Collateral Security Holdings cease trading, a third party back up service provider will take on the service obligations.”
“A Loan Contract is between the lender and the borrower.”
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Post by wiseclerk on Jun 12, 2018 15:48:13 GMT
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insideout
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Post by insideout on Jun 12, 2018 16:02:51 GMT
I've not been keeping up to date on this, but I find it next to impossible to believe that this data does not exist. If there is no physical record, then their would be some backups, somewhere. Presumably offsite. Even in the event the provider quickly killed off and wiped the client server, they'd not have cleared down any backups, if they existed. If collateral were maintaining their own backups, they would likely be off site. Having worked for well over a decade in data centres and providing servers/developing platforms in scenarios similar to this, I think it, unthinkable, that a recoverable backup is not somewhere... I'd be more than happy to volunteer my time to liaise with any providers and extract usable data from a database backup. fwiw - whilst in these situations in the past, I have been asked by clients to specifically delete and purge data held on servers. You can I expect draw conclusions from this. Either should be investigated imo, because either intent to commit fraud or yet more blatant incompetence and thus possible grounds for further legal action could be gained. d_saver
EXACTLY. THIS should have been the very first step BDO should have taken in the first few HOURS of their involvement - and before the court case (which FCA were sure to win and BDO were said to have been working behind the scenes already). FCA should also have been on this aspect of the case from before the Court hearing also.
EITHER all the data should have been known and confirmed to be in place within HOURS of BDO's involvement,
OR they have been either woefully neglectful of their DUTIES to investors and incompetent (and failed to seek expert IT advice which was offered free of charge by more than one expert IT investor?)
OR data was comprehensively destroyed - which should have involved the police - and many weeks ago. And we should have been told.
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Post by Please turn me over on Jun 12, 2018 16:03:46 GMT
English, please.
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Post by westcountryfunder on Jun 12, 2018 16:44:18 GMT
Extracted from BDO's FAQs dated 11 May 2018:
"Based on the information currently available there is no reason to doubt the validity of the security documentation, which the Joint Administrators note was originally prepared by the Companies’ lawyers."
"From the information currently available, the initial view of the Joint Administrators’ lawyers is that investors will be treated as creditors of the Companies as a consequence of s26 of the Financial Services and Markets Act 2000."
How can these two statements be consistent with each other? Particularly with the property loans, if a legal charge has been taken, executed correctly, and properly registered then presumably it is clear that there exist numerous loans from us as individual investors to the borrower.
Admittedly I have not seen any documentation. Just maybe it refers only to Collateral as lender (incorrectly), in which case I could see how the documents would be valid and enforceable, but only in favour of Collateral, leaving investors as creditors. So what we need to know is - just what do those loan documents say?
Another possibility which may explain the inconsistency between the two statements is that the loan security is unenforceable because the underlying loan has been made via an unauthorised platform and therefore illegal. In that case I can see how only the second statement could be correct.
The only people who will come out of this content are the administrators and especially any lawyers who become involved.
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Post by mrclondon on Jun 12, 2018 17:06:24 GMT
[...] Admittedly I have not seen any documentation. Just maybe it refers only to Collateral as lender (incorrectly), in which case I could see how the documents would be valid and enforceable, but only in favour of Collateral, leaving investors as creditors. So what we need to know is - just what do those loan documents say? Another possibility which may explain the inconsistency between the two statements is that the loan security is unenforceable because the underlying loan has been made via an unauthorised platform and therefore illegal. In that case I can see how only the second statement could be correct. [...] Yes both valid potential explanations at this point. I'm not sure if any lender ever managed to get sight of any actual signed loan documents (even after volunteering to sign a NDA) as opposed to pro-forma templates.
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mason
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Post by mason on Jun 12, 2018 17:29:29 GMT
So, to summarise:
BDO has no reason to doubt the validity of the security documentation, but doubts its validity owing to Section 26 of the FSMA 2000.
BDO is working with the IT service provider to recover records of individual loan holdings, but these are irrelevant owing to Section 26 of the FSMA 2000.
I can't wait for the proposals.
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