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Post by dualinvestor on Mar 2, 2018 7:19:59 GMT
With losses of 294k in 2016 and 82k in 2015 I'd say the writing was on the wall for a while. So COL was operating at a loss. Thus for the fees of the administrator to be met, we as investors can not expect returns of 100p in the £ . or am i missing something ? Lenders are not creditors of Collateral only the underlying loan book. So aside from costs of recovery the financial situation of Collateral does not affect them.
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elliotn
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Post by elliotn on Mar 2, 2018 7:45:56 GMT
They also charge up to 12% to desperate lenders. Sadly, lender exit fee ie on sale after midnight not separated in fee income although it may be possible for a rough guestimate from the SM scrapes. abl also charge highest rates on loans I'm invested in. Is ABL making money ? No. Losses -365k 8/15, -149k 8/16. 8/17 accounts due end May.
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archie
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Post by archie on Mar 2, 2018 7:56:27 GMT
One issue which I have not yet seen mentioned anywhere in this thread (as far as I recall) is this: assuming it takes many weeks for the administrator to unravel the situation at Collateral, what do we all tell the tax man in the coming months? Do we have to delay submitting Tax Returns until we have accurate information? Could we be prudent and assume much lost capital, let alone interest, especially if it suits us to offset gains this year? Are we perhaps deemed to have already received the interest, even if we rolled it over into another loan straight away (as I usually do) and it is potentially lost? They hope to have the website back up in the next week or two (with trading disabled), you should be able to generate a tax statement. Report whatever the platform states.
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elliotn
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Post by elliotn on Mar 2, 2018 7:57:28 GMT
So COL was operating at a loss. Thus for the fees of the administrator to be met, we as investors can not expect returns of 100p in the £ . or am i missing something ? moist posted this earlier in the thread which is pertinent to that concern. Had a long chat with Jessica this morning. Col were not out of cash, the administration was forced by the FCA. Intention is that fees are paid from COLs arrangement fees on loans. dualinvestor discusses the two types of insolvency earlier ie can't pay your bills or owe more than company is worth. Coll is in 2nd category. That said you may continue as a going concern if directors believe they can meet obligations for the next year, for example, if a main creditor allows forbearance. Whilst having negative assets of 0.3M there was 282k cash in bank and you'd expect the dash for development property growth after the Nov16 accounts to have increased turnover (and costs, ie the new 'QS' they just onboarded). Not sure how long that would keep the lights on without trading though, depends on any continuity solutions the administrator looks at, possibly there is more fee income to be derived ie exit fees upon redemptions. This type of stuff should be covered off in the admin report due within c8 weeks (possibly extended in court).
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Post by dualinvestor on Mar 2, 2018 7:59:38 GMT
@magenta14 No
The Administrators might use some or all of Collateral's asset's to pay costs of collection (although he may be on shaky ground legally doing so) but if there is any surplus or deficit it is nothing to do with the lenders.
The only legitimate use of Collateral's assets as far as I can see is paying his own costs and they do not include recovering an asset belonging to someone else I.e the loan book.
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mason
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Post by mason on Mar 2, 2018 8:06:02 GMT
The current belief is that Collateral held interim permissions until the end of January 2018. That seems entirely consistent with the comments in that thread. What is unclear at this time is the reason why the IP lapsed - whether it was a rejection of Collateral's application by the FCA or as a result of an error remains to be seen. I just can't accept that Gordon said in January 2017... 'Yes we're currently under interim permissions and our lawyers and compliance advisers are comfortable that we have the requisite permissions in our application for full FCA approval. '....On the 18th January 2018, Gordon states that 'Our FCA application is still ongoing...Then at the end of January 2018 changes are made to the information on the website as they continue to trade and then yesterday Collateral claim that '“The company was operating in the belief that it was authorized and regulated by the Financial Conduct Authority (FCA) under interim permission,” What is the reason you can't you accept it? We have no reason to believe the application was not ongoing on the 18th January 2018. We know as of the 29th January 2018 it was not still ongoing. This is consistent with a decision having been made by the FCA not to continue the application on or around that latter date. Whether that decision resulted in the change in IP or was the result of a lapse of IP remains to be seen. One possible explanation is that the FCA found something they didn't like and did not believe it could be fixed. If that's the case, we'll probably never find out exactly what it was. The events that occurred in February could be the desperate actions of a management team trying to save the business by brokering some sort of takeover, which ultimately fell through. But that's just one of many possible scenarios.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Mar 2, 2018 8:21:20 GMT
Maybe this comment is a little naive and premature for a professional to make. Absolutely, if it is what she actually said (with no caveats) then it demonstrates naivity with respect to the recovery prospects of p2p loans in a default situation, and is a statement no one in the p2p sector would dream of making. I have a feeling they are meekly expecting capital repayments will generally appear on the maturity date of the loan agreements. This is a misquote of what is in the citywire article. Plenty of caveats in it that act on the extracted part. Amazing how misquoted take on a life of their own in an anxiety loaded environment.
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hazellend
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Post by hazellend on Mar 2, 2018 8:26:33 GMT
The 3 I use, LY, MT and FS are all making a profit. But they were all loss making at the beginning
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Post by dualinvestor on Mar 2, 2018 8:46:21 GMT
@magenta14 No The Administrators might use some or all of Collateral's asset's to pay costs of collection (although he may be on shaky ground legally doing so) but if there is any surplus or deficit it is nothing to do with the lenders. The only legitimate use of Collateral's assets as far as I can see is paying his own costs and they do not include recovering an asset belonging to someone else I.e the loan book.(my bold) So from what you've written any costs associated with administering the run off of Our loan book will be met from Any ring fenced loan book contingency fund Or Our returning income and capital? I can't say that will be up to the Administrators. I don't know what her there is any ring fenced funds, but the lenders have no call on the assets of the company either as cosrs or as unsecured creditors. Furthermore the loans are several (I.e separate)so proceeds from one should be returned to the lenders in that loan not used to peruse defaults in other loans.
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Post by dualinvestor on Mar 2, 2018 8:48:03 GMT
The 3 I use, LY, MT and FS are all making a profit. But they were all loss making at the beginning Avitally LY claim to have been profitable from day one.
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Post by charliebrown on Mar 2, 2018 8:52:21 GMT
Why would FCA force COL into administration? Whose best interest is that protecting? It seems like a lose-lose result. Because so many people were posting about how great a platform COL was I decide to sink a 5 figure sum in recently. Hadn’t even been paid a dime in interest and then the news broke. I took that 5 figure sum out of Lendy because I’m totally sick of their ego and incompetence, we’ll perhaps that’s the lesson for me, ego and incompetence is better than a platform meltdown. I’m pretty disillusioned with the whole p2p thing now, I’ve lost significant sums. There’s only MT that I haven’t had any trouble with so far.
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Post by charliebrown on Mar 2, 2018 8:55:51 GMT
But they were all loss making at the beginning Avitally LY claim to have been profitable from day one. I don’t see how you can’t make a profit when you’re gambling with other people’s money. Ultimately you get a share of all the winnings and none of the losses.
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withnell
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Post by withnell on Mar 2, 2018 9:06:48 GMT
While COL might have been loss making, a lot of that relates to the origination of new loans - so paying lenders 12-15% between release to the platform and borrower drawdown. The existing drawn-down loanbook provides a constant income stream from the differential that the borrower pays vs what we receive, plus as the Administrator has said to some lenders they have some retained up-front fees
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poppyland
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Post by poppyland on Mar 2, 2018 9:14:34 GMT
Why would FCA force COL into administration? Whose best interest is that protecting? It seems like a lose-lose result. Because so many people were posting about how great a platform COL was I decide to sink a 5 figure sum in recently. Hadn’t even been paid a dime in interest and then the news broke. I took that 5 figure sum out of Lendy because I’m totally sick of their ego and incompetence, we’ll perhaps that’s the lesson for me, ego and incompetence is better than a platform meltdown. I’m pretty disillusioned with the whole p2p thing now, I’ve lost significant sums. There’s only MT that I haven’t had any trouble with so far. If it's any consolation, I'm in a similar position: pulled money off Lendy (as far as I could) and put it in Collateral, MT and Ablrate in early Jan. One of my two MT loans went into default 2 days ago, and Coll is in administration. With 5 figures stuck on Lendy, and quite a few of my FS loans in default, the only place where I'm doing well is Ablrate. As far as losing money goes, nothing is certain yet, and it will be years before most of us know exactly how much we lost/gained overall as a result of P2P investing. For myself, the amount I have "stuck" in various places exceeds by 50% all the interest I've ever earnt. Hopefully when everything is wound up there will still be a profit left.
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Post by elephantrosie on Mar 2, 2018 9:29:04 GMT
Did MT have loans that go into default two days ago?
It is going to take a long time for this administration to be sorted out. My consolation to myself is I am still young and have a stable job so I can earn back the money that I have lost from my day to day job quickly.
On a brighter side, we have gained some valuable experience from this and will hopefully make us better investors in the future.
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