GeorgeT
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Post by GeorgeT on May 2, 2018 20:49:50 GMT
Have just read the FAQs which were brand new today and I note that not much has happened and they don't seem to know very much or have access to anything at this stage. I note that they will be having a meeting with the previous administrator (who was invalid) and the Collateral chiefs to find out what's going on and get access to the books and records etc. I can't help but wonder how responsive the previous Administrator and the Collateral bosses will be in the circumstances because people aren't too happy about losing their businesses and having instructions taken off them by the courts. I fear this could be a long drawn out affair and also a costly one because of course it is now all being dealt with by expensive, London rate, fat cat financial types.
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empirica
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Post by empirica on May 2, 2018 21:21:42 GMT
Have just read the FAQs which were brand new today and I note that not much has happened and they don't seem to know very much or have access to anything at this stage. I note that they will be having a meeting with the previous administrator (who was invalid) and the Collateral chiefs to find out what's going on and get access to the books and records etc. I can't help but wonder how responsive the previous Administrator and the Collateral bosses will be in the circumstances because people aren't too happy about losing their businesses and having instructions taken off them by the courts. I fear this could be a long drawn out affair and also a costly one because of course it is now all being dealt with by expensive, London rate, fat cat financial types. On the one hand the previous Administrators were foolish (to the point of being at fault) for suggesting it would anything other than a drawn out affair. On the other, it was reported that the Courts will take an independent assessment of costs at the end and will not allow unreasonable costs. These events are neither swiftly nor cheaply resolved.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on May 2, 2018 21:30:00 GMT
Hopefully another Player will just buy the whole damn Loan Book asap and we can get on with our lives.
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shimself
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Post by shimself on May 2, 2018 21:39:41 GMT
Hopefully another Player will just buy the whole damn Loan Book asap and we can get on with our lives. You would hope so but this sounds dithery: Are the Joint Administrators considering the sale of the loan book to another company? The Joint Administrators will explore the feasibility and appropriateness of such a sale (should there be expressions of interest) and will act according to the best interests of the Companies and their creditors. The initial focus of the Joint Administrators, however, is to recover the books and records and understand the nature of the outstanding loan book.
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IFISAcava
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Post by IFISAcava on May 2, 2018 22:01:30 GMT
Have just read the FAQs which were brand new today and I note that not much has happened and they don't seem to know very much or have access to anything at this stage. I note that they will be having a meeting with the previous administrator (who was invalid) and the Collateral chiefs to find out what's going on and get access to the books and records etc. I can't help but wonder how responsive the previous Administrator and the Collateral bosses will be in the circumstances because people aren't too happy about losing their businesses and having instructions taken off them by the courts. I fear this could be a long drawn out affair and also a costly one because of course it is now all being dealt with by expensive, London rate, fat cat financial types. On the one hand the previous Administrators were foolish (to the point of being at fault) for suggesting it would anything other than a drawn out affair. On the other, it was reported that the Courts will take an independent assessment of costs at the end and will not allow unreasonable costs. These events are neither swiftly nor cheaply resolved.especially when you start over again after two months.
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tx
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Post by tx on May 3, 2018 7:41:55 GMT
I would rather is it done right and fair than misleading and quick.
The FAQ states it’s too early too say about anything. ;-(
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averageguy
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Post by averageguy on May 3, 2018 9:04:32 GMT
I would rather is it done right and fair than misleading and quick. The FAQ states it’s too early too say about anything. ;-( I expect it to be slow and systematic
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amanda373
Anyone downloaded the full transcript of the Court Session with the FCA. .?
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Post by amanda373 on May 3, 2018 20:47:35 GMT
I spoke to FCA to complain about the apparent take over before I knew the details of the Collateral failure , and requested in my formal complaint , a Committee of Inspection be appointed , which would over see the accounts of the liquidators and monitor their charges. I was glad to read of the courts charge that they be reasonable..we wait to see.
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shimself
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Post by shimself on May 4, 2018 8:53:06 GMT
I would rather is it done right and fair than misleading and quick. The FAQ states it’s too early too say about anything. ;-( I expect it to be slow and systematic When I've seen businesses (my employers) go bust (3 times, ahem, not my fault gov honest) albeit rather smaller in money amounts than we have here, then what struck me was the very quick decision making, no real interest in precision. In this instance if they do really have one or more offers to buy out the loans at 100% I can't imagine why they wouldn't take it. If COL's accounting was ropey then maybe (I mean that each lender's statement was correct, and I don't get any sense of that here) and even then the buyer could be asked to cover that. What is certainly the case that the loan book will hemorrhage value damn quick if borrowers can't carry on doing the projects and lenders will be well out of pocket as a result.
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empirica
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Post by empirica on May 4, 2018 21:41:21 GMT
I expect it to be slow and systematic When I've seen businesses (my employers) go bust (3 times, ahem, not my fault gov honest) albeit rather smaller in money amounts than we have here, then what struck me was the very quick decision making, no real interest in precision. In this instance if they do really have one or more offers to buy out the loans at 100% I can't imagine why they wouldn't take it. If COL's accounting was ropey then maybe (I mean that each lender's statement was correct, and I don't get any sense of that here) and even then the buyer could be asked to cover that. What is certainly the case that the loan book will hemorrhage value damn quick if borrowers can't carry on doing the projects and lenders will be well out of pocket as a result. I'm struggling with what is probably a basic concept and widely known and understood, but nevertheless ... I believe the size of the loan book is known, but has anyone indicated what it might cost to buy it? In my head I have a scenario where someone Alice knows another person called Bob who needs to borrow £100k and is prepared to pay back £120 in a years time. Alice doesn't have £100k but knows another person, Clare, who does. Alice convinces Clare to lend that £100 via herself to Bob on the basis that Alice will take care of everything. In return Alice and Clare will split the £20k 'profit', each ending up with £10k. By way of security, Bob is offering up a rare (and entirely fictional, but this is my scenario and it's allowable), a very rare £100k bank note which everyone agrees would cover the whole debt, interest and then some, if it were to be sold, which is the last thing Bob wants to do, hence the desire to borrow £100k instead. Before the year is out, Alice gets a bit poorly and is no longer able to fulfil her commitments to Clare. She calls in someone called Dave to manage her affairs. Dave is weighing the options when Eve - always the opportunist - turns around and says to Dave: "I'll buy the debt for £5k." Given there are no other considerations, would Dave be wise to take the offer? In that scenario, I see Eve taking over the role of Alice and paying part of would have been Alice's 'profits' for the privilege. Eve's outlay is £5k on a loan of £100k, and plenty of security supporting it. Seems like a reasonable deal and not a bad way to double her money. Now that someone is running the loan again, Clare should see her money back. If that's correct, how low an offer would Eve have to make for it to be worthwhile to Dave? He has to cover his costs and there'll undoubtedly be some other aspect to cover, but he could, for a quick win (and for arguments sake), take £2k and still be in pocket. So, when it's said that someone has made and offer of "100p in the £" what sort of sum are they talking about? Presumably not the entire value of the loans, but is it instead the projected profit? And would that be, in this case, just Alice's profit or both Alice's and Clare's? Or is it something else?
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Greenwood2
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Post by Greenwood2 on May 5, 2018 5:48:54 GMT
Bondmason charge about 1%-1.5% of the interest earned on the loan book to run the platform (and make a profit), so I would expect anyone taking over running this loan book might want that order of income plus a sum to get it all re-set up. Whether those funds exist in Col or would have to come from lenders I don't know.
But I thought the 100p in the £1 was the hoped for return of lenders funds declared by RR, but now disputed.
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pikestaff
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Post by pikestaff on May 5, 2018 7:53:23 GMT
There seems to be some confusion between a sale of the loan book (covered in the FAQ) and a sale of the right to run the loan book (which was not mentioned in the FAQ, but should have been). Two very different things.
SALE OF RIGHT TO RUN THE LOAN BOOK
I think the spread on most platforms that run loan books is 2% and up, excluding any initial arrangement fees. Bondmason's is smaller but they don't run a loan book at all, they invest in other peoples loans.
If Col is in line with this it should be sufficient, on an ongoing basis, for someone already in the business to take over the running of the loan book. However, this assumes the loan book is in decent shape and not expected to generate an abnormal level of defaults (which would reduce their income and add costs). An incoming manager would look to do some DD; might not want the whole book; and might want extra income to cover the risk - which could take the form of an ongoing lender fee on the loans they take on.
SALE OF THE LOAN BOOK ITSELF
The same issues apply in spades for a prospective purchaser of the loan book itself, who might well want a discount on principal.
In the FAQ the adminstrators say they will "explore the feasibility and appropriateness of such a sale (should there be expressions of interest)". This slightly tentative tone may reflect the fact that they won't yet have got their heads round the legalities of such a sale. If the loans have been documented correctly, they don't belong to Col but to the lenders. So they would need to find a way to bind all lenders into a sale. Not being a lawyer I'm not sure exactly how they would do that...
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greenslime
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Post by greenslime on May 5, 2018 11:17:35 GMT
In the FAQ the adminstrators say they will "explore the feasibility and appropriateness of such a sale (should there be expressions of interest)". This slightly tentative tone may reflect the fact that they won't yet have got their heads round the legalities of such a sale. If the loans have been documented correctly, they don't belong to Col but to the lenders. So they would need to find a way to bind all lenders into a sale. Not being a lawyer I'm not sure exactly how they would do that... Yup. I think folk just have to accept that even the steeliest insolvency ninja may need a bit of time to get their head round what's involved in such a rather 'non-traditional' case - and that's without allowing for any other 'issues' that may emerge.
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Post by mrclondon on May 5, 2018 11:34:24 GMT
SALE OF RIGHT TO RUN THE LOAN BOOK I think the spread on most platforms that run loan books is 2% and up, excluding any initial arrangement fees. Bondmason's is smaller but they don't run a loan book at all, they invest in other peoples loans. If Col is in line with this it should be sufficient, on an ongoing basis, for someone already in the business to take over the running of the loan book. However, this assumes the loan book is in decent shape and not expected to generate an abnormal level of defaults (which would reduce their income and add costs). The majority, possibly all, of COL's loans were on the retained interest (and margin) model. However, where we are today, the majority of COL's loans have already reached their notional maturity date, and without an extension (believed to be impossible as the business is not regulated) there is no incoming interest+margin, unless/until the loans refinance in full covering accrued interest + margin since the notional maturity date. By the end of May 90% of my COL loans (by value) will have reached their maturity date, and by the end of July 100%. There is no evidence at CH that any of the property loans have refinanced in the last 2 months, although its possible some of the smaller ones may have on a cash basis. "Running the loan book" is, in this case, primarily an activity of facilitating the refinance / redemption of overdue loans.
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blender
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Post by blender on May 5, 2018 12:56:28 GMT
To expand on mrc's last sentence. Presumably 'running the loan book' also involves managing the security, both physical items and charges on property. A borrower is not going to repay their principal without the release of their security, and there is no-one to do that, unless that can continue under administration. At present, lending continues past term without any obligation to pay extra interest. If the loans are short, then perhaps the winding down of loans is best done under administration.
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