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Post by GSV3MIaC on Feb 5, 2019 9:54:04 GMT
I think anyone with one scintilla of a brain cell. Would agree with you. Anyone who disagrees has no clue of what a catastrophic mistake it would be to do anything but let Lendy sort this out. Unless they were likely to benefit from any legal action .. i.e. two set of lawyers, at the very least, and possibly some administrators too. Sharks have NO interest in rescuing floundering swimmers, unlike dolphins who are rumoured to ..
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bugs4me
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Post by bugs4me on Feb 5, 2019 10:09:18 GMT
To answer the PM I've just received publicly, yes, I should have indeed disclosed my own involvement in these loans before commenting on this thread.
So, to summarise my position
1. I have c. 10% of my currrent Lendy balance in total in some of these four loans
2. I believe Lendy is in a real mess, and is fighting to try to survive. They could have given up already, but they haven't, and are spending a small fortune attempting to find solutions to the many problems.
3. I believe the outcome across all loans on the loanbook will be significantly better if Lendy remains an operational business
4. I think, given where we are today, it is perhaps best to consider the balance in these four loans to be a quasi equity stake in the survival of the business
5. I am in the larger of the two "London Loans"
6. I do not want to see Lendy forced into administration any time soon
7. I do not want to call in the loans made to Lendy (under the guise of DFL001,DFL002,PBL027,PBL056) any time soon.
8. I see no evidence that these four loans are being treated any differently to any of the other distressed loans on the loanbook. It will take 2 to 5 years to work through the various loans from this point.
Fully understand your position but personally I also have sympathy with investors, that lent in good faith based upon numerous but possibly deliberate erroneous assurances made by LY. I cannot see how, especially with the amount of hostility towards the platform, they can survive in the long term. A great deal of the hostility towards LY has in all fairness been brought on by themselves. I believe everyone involved (or at least most) in P2P expect losses at some stage with the odd loan here and there, However the contempt that LY has shown towards lenders especially in the loan ‘updates’ section is frankly beyond belief. Always promising jam tomorrow which I do not necessarily believe was promised in good faith. I expect many LY investors would just like to exit the platform even if it does result in a loss here and there. The problem is whether you believe the current management can achieve this result and the facts are it has to be on a sooner rather than later basis. We’ve long past the ‘later’ stage. On the other hand, I ask myself what incentive there is for LY not to simply lock the doors and walk away. It’s not that long ago that they were ‘croaking’ about record profits whilst many loans were at the same time in the distressed column - not exactly good PR and certainly annoyed many a lender I suspect. The possible legal action regarding the four loans in question has been brought about by sheer frustration. Of course LY cannot afford a negative result in the event that legal action was successful against them. On the other hand, there is the argument that LY are simply running down the clock until those doors are closed anyway. Whether they are prepared to devote the necessary 2-5 years as you mention is a moot point in my book and is based upon the hopeful assumption that time frame is within their plans. I have no wish to see the demise of LY (or indeed any P2P platform). They are though really at the last chance saloon and if the threat of legal action wakes them up then that can only be positive. Hopefully, and that’s all that can be said after so many ‘false dawns’, the new/revised/revamped enhanced recovery team will yield results.
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zlb
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Post by zlb on Feb 5, 2019 10:09:55 GMT
I wonder whether it's actually possible to be sure enough - i.e. if there is a point which is open to interpretation. Good question. The problem with the old T&C's is that they were written long before the concept of property lending became a gleam in SavingStream's eye. Property loans aren't even mentioned, just vehicles, boats and aircraft. Hence why the T&Cs received a comprehensive rewrite soon after property lending kicked off. However, taking a helicopter view of the overall intention of the T&Cs (rather than picking over contradictory clauses in isolation) it seems pretty clear. "Investors" are presented with the opportunity to invest in loans, which in turn are secured on the borrowers' assets. If the borrowers keep up payments then the investors receive a fixed rate of interest during the term and their capital back at the end. If the borrowers don't, then the asset is to be sold and resulting funds distributed (capital first, then SavingStream fees, then interest). SavingStream's liability "on any basis whatsoever shall not exceed the total amount of revenue earned by Saving Stream in respect of transactions entered into" (the second half of clause 12.3 is redundant since no "Specified Tolerance" was ever defined for property). But the bigger question in my mind is, even if a court could be persuaded that lenders instead were actually lending money to SavingStream themselves, and that SavingStream (now Lendy) themselves are therefore liable for repayment of these sums in full (regardless of the status of the underlying loans that were funded), what would this actually achieve? Surely lenders would have succeeded in proving they are in fact unsecured creditors of Lendy, not secured creditors of the borrowers. But does this make it more or less likely that lenders will be repaid their money? If Lendy ends up in administration / receivership, I rather suspect the prospects for unsecured creditors would be poor.Seems clear/nicely put. I wonder how much 'intent' comes into it, and on the other major issue atm. i.e. the T&C says x, Ly did y, but the obvious intent was z (your 'helicopter view'?).
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michaelc
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Post by michaelc on Feb 5, 2019 14:45:15 GMT
Interesting. I’m not going to name any names but there are people here who have registered their interest yet are voicing their disapproval. Looks like it’s every man for himself.The questions I asked myself were- What progress has been made in the last 600 days? Based on this, what progress can be forecast in the next 600 days without turning up the heat? I'm not sure if you mean me Jeepers? I initially posted a message around page 1 or 2 of this thread because I'd PMed you to ask what it was about thus showing my "interest". I'd asked to be kept informed but am a long way from committing myself to anything. I've now read some of the other posters' comments and am even less convinced than I was of this being the right course of action - hence my more recent post. We also don't know what this action would be, so I wanted to be kept informed before making my final decision.
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izigor
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Post by izigor on Feb 5, 2019 17:12:46 GMT
Interesting. I’m not going to name any names but there are people here who have registered their interest yet are voicing their disapproval. Looks like it’s every man for himself. The questions I asked myself were- What progress has been made in the last 600 days? Based on this, what progress can be forecast in the next 600 days without turning up the heat? Hi Jeepers, I have significant investment in DFL001 & DFL002 and I appreciate your effort on this matter. I also have significant investment in other non-performing loans and for this reason, I can also fully appreciate as well as concur with Mrclondon's post. You have asked what progress has been made in the last two years. The answer to that is indeed frustrating. However, right now, Lendy is showing some resilience and more importantly they seem to be making a lot of effort in trying to turn things around. THIS is what we wanted and there's finally a glimpse of it happening. So tripping them up at this point in time would be counter productive in my opinion. I don't believe it's 'every man for himself' we are all lenders and would happily help each other (when the timing is right).. but the different man/woman here have different concerns. Some would be in the above four loans only and would be prepared to sink the ship and get on the rescue boat, others have children in the hull and sinking the ship is not an option, some believe in the ship (not every ship is the titanic) .. and would like to continue sailing in it after the storm ... Timing is everything, after their first burst of energy, they are likely to become complacent at some point, so if progress stalls, I suggest we 'turn up the heat' once this happens..
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SteveT
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Post by SteveT on Feb 5, 2019 18:40:23 GMT
1. It wasn’t aimed at you michaelc as you said you were unsure at the time. Perhaps your side-swipe was aimed at me. I did PM you to ask for details of the legal action you're pursuing and how the lawyers propose to be remunerated (as an indication of how they view its prospects). Aside from sharing an email address where lenders can register their interest, you answered neither question. I certainly have no intention of registering.
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Post by GSV3MIaC on Feb 5, 2019 19:42:32 GMT
I also inquired as to what the plan was, but currently don't see it (as i understand it) as my best option. The old style t&c s always seemed to indicate to me that we'd only get paid if ss got paid ... however i'm quite willing to lean on them a bit to get some sort of acceptable outcome, rather than more can kicking. A mutiny may be in order, even some plank walking, but scuttling the ship seems premature.
I am sure Ly has learned plenty about hiding assets and avoiding payouts, from some of the more creative borrowers on the books, so even if you sue them and win, I doubt you'll get much joy. The cash is probably in a family trust in the BVI by then.
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averageguy
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Post by averageguy on Feb 5, 2019 20:22:13 GMT
Sits on hands and observes
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Post by Badly Drawn Stickman on Feb 5, 2019 20:42:07 GMT
Sits on hands and observes How will you eat your popcorn?
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Post by samford71 on Feb 5, 2019 21:09:04 GMT
Lendy/SS actually being the counterparty for the lending syndicate is perfectly reasonable scenario. The loans were originated when SS faced the lending syndicate and it's not clear than any changes in the T&Cs can over-rule that situation. It would have to be tested in court, a rather long and expensive process. But honestly why would you ever want to do this? You're currently a secured creditor, with senior access to the security. If you instead become a counterparty of Lendy you are instantly an unsecured creditor. An unsecured creditor of a small SME. You are going to ask that SME for what £12mm+interest, a number way beyond their cashflow and balance sheet capacity. If you call that debt in, they default with a probability close to 100%. If you then accelerate to recover you are then left in a pool of other unsecured creditors. The company will be in administration. This will take a long time, cost a lot of money, and further impair any recovery when the security (to which you have given up senior access to) is finally realized.
You would be asking to be subordinated in the capital structure. This makes no financial sense.
Before anyone says "but it will be fine, the FCA has an wind-up process and the insolvency practioners/whoever etc would do a better job": that is the financial equivalent of believing that fairies live at the bottom of the garden.
Edit: the only option that would actually make sense is to remove the agent (Lendy) to allow the lending syndicate to directly face the borrowers (or appoint a new agent). This keeps the security position intact. That clearly also requires the syndicate to go to court to remove Lendy and if (big if) successful make a better job of the recovery at a lower cost.
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zlb
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Post by zlb on Feb 6, 2019 9:17:58 GMT
Jeepers I think you've created a valuable thread here. There are more in-depth thinking on outcomes, and more detailed analysis of the scenario than on other threads (i.e. the london loan). That's what this forum is for - a sort of DD of all view points, not just DD of the specific loan or platform structure, or platform owners. Well, that's my view anyway. People probably help me more than I help other people here. I think anyone who's been involved in a legal claim/defence situation, will want to think carefully about entering such a contract because one can't leave, once started, AFAIK. And will also be aware that things are never as straightforward as signing the claim in the first instance.
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michaelc
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Post by michaelc on Feb 6, 2019 17:10:00 GMT
<snip> But honestly why would you ever want to do this? You're currently a secured creditor, with senior access to the security. If you instead become a counterparty of Lendy you are instantly an unsecured creditor.
<snip>
Why instead? Wouldn't it be in addition to ?
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Mousey
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Post by Mousey on Feb 6, 2019 17:37:45 GMT
I am sure Ly has learned plenty about hiding assets and avoiding payouts, from some of the more creative borrowers on the books, so even if you sue them and win, I doubt you'll get much joy. The cash is probably in a family trust in the BVI by then.
Look at the 2016/17 accounts - the sum of £1,000,000 was sent to a "Wealth Protection Remuneration trust" owned by the two directors at the time.
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wuzimu
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Post by wuzimu on Feb 6, 2019 22:41:52 GMT
I can imagine at the end of the Lendy story, an FCA fine equalling the profit extracted from the business, plus life bans from FS.
Seen it before.
Shame FCA keep the fines rather than channelling back to victims / lenders
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dApps
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Post by dApps on Feb 6, 2019 23:10:52 GMT
I can imagine at the end of the Lendy story, an FCA fine equalling the profit extracted from the business, plus life bans from FS.
Seen it before.
Shame FCA keep the fines rather than channelling back to victims / lenders
Maybe, but can't see that happening anytime soon. In the same month as writing their last new loan, Lendy received the FCA's blessing following, according to the press release, a: " detailed end to end assessment of its business and operating model". I can see the FCA wanting to put some distance between itself and that decision if it ever came to the point of censure. On the other hand, a fine in the FCAs coffers would come in handy for whatever they'l eventually have to cough up for failing in their legal duties and mismanaging the public record in the COL situation 
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