Administration - State of Play & Significant Information Mar 9, 2019 14:34:42 GMT Duane Dibley, ozboy, and 1 more like this
Post by star dust on Mar 9, 2019 14:34:42 GMT
Apparently an email has been sent out by BDO on Friday 8th March to cira 30 Collateral investors containing revised "proof of debt statements". It seems likely that only investors with significant amounts of cash on account and/or loans up for sale will have received one. If you haven't received one there is no immediate need for concern. There will be a Creditor's Committee Meeting next week on Tuesday 12th March, and Monetus will raise this matter, so hopefully more information might be forthcoming.
In the meantime there is a discussion thread here and an incredibly helpful explanation of what this is about by nick who's post I am repeating here.
I had originally reconciled the initial original proof of debt figure to within 33p and fortunately kept detailed account statements and email transaction confirmations which could substantiate my claim to a high degree of certainty. It was immediately clear that about half the discrepancy was due to cash I had on the platform. BDO stated on the call that as far as the company records showed, I only had 33p in my account versus mid 4 figures per my records - at least I now know why the original debt figure given to me was different to my records by 33p because they didn't bothering including this in the initial proof of debt figure. The key points from my conversation with BDO were:
- About 80-85% of all account balances tie back to the original debt figures
- Letters have only been emailed to about 30 investors where the discrepancy is greatest (in absolute £ terms)
- Nearly all the accounts that vary against the original balances given are going against the investor, ie the balances are being revised down.
- They are hoping that investors with discrepancies will respond with detailed support so that they can identify specific/systematic issues with the data they have
- Nothing is going to happen quickly, investors with discrepancies will have plenty of time to respond and engage - this is not going to be a quick process
- Fundamentally the issue they have is that the original balances were just total summary exposures contained in a spreadsheet with no supporting data or allocation across loans. The revised balances is based on some form of underlying data, and more importantly, allows allocation of exposure against specific borrowers and the platform itself (in respect of non-invested cash).
The spreadsheet provided by BDO along side the letter provides a basic breakdown of info, specifically line items of individual amounts invested in each loan and an offsetting "amount_selling" figure which they believe relate to sold loans, with entries for each loan part acquired. However, I believe the "amount selling" column also captures loans that were on sale but had not been sold as at 28 Feb and suspect this will account for the bulk of the remaining variance.
In my discussion with BDO I highlighted that the net funds I had invested on the platform (which they should be able to verify by bank records) now exceeded the total exposure (cash and loans) they were now suggesting, and that this was even before factoring in interest and cash back that I had earn't on the platform. When discussing this point, it became clear to me the dilemma BDO have - that the original analysis is worthless to them as they are looking to distribute realisations on a loan by loan basis and so are left relying on the numbers they have pulled from the database which most cases reconcile with the original balances and can allocate exposure to each borrower, but does not tally back to all originally reported exposures for all accounts. I hope that our individual feedback/analysis of discrepancies in reported exposures will collectively help them to reconcile all accounts to the original exposure figures that most investors seem to be in agreement with.
I agreed on the call that I would send BDO my detailed statement and my analysis of where the discrepancies in values are coming from so that they can investigate further and hopefully correct their analysis. I suggest everyone else affected does the same, even absent all supporting data, as I suspect that the problem/issues will be common (eg not including loans on sale but weren't sold etc) and should go a long way to helping them fully reconcile the data.
The difference in reported cash balance is a major concern as even a rudimentary analysis would show something is far from right. However, I suspect the losses on cash held on the platform will likely suffer the greatest write-off (given the apparent large day one discrepancy in funds held in the client account and after administration fees) so dispute over cash balances held on the platform may end up being a depressingly mute point......