wuzimu
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Post by wuzimu on May 31, 2019 18:53:24 GMT
Re: administrators update email 31/5/19
I think the most important part of this is the 3rd paragraph: 'We understand that, for the purposes of the Insolvency Act 1986, certain Investors may also be creditors of Lendy, and we are assessing this position with our legal advisors. Further correspondence will be issued on this in due course. '
RSM will have been pondering if investors are creditors. This is important for many reasons , not least because the duty of the administrator is to Lendy's creditors.
FWIW this is my belief:
1. There are (at least) 3 categories of unredeemed Lendy loans - Model 1 (non-P2P loans), 'old P2P' (pre 5/0318 loans) and 'new P2P' (post 5/03/18 loans). The deductions from recoveries of defaulted loans due to investors vary greatly with each loan category.
2. Model 1 loans have the lenders providing funds to Lendy who then pass them on to a specified purpose. Returns are contingent on the recovery from the security , but there is no covenant from the borrower to the lenders.
In that case it seems clear that Model 1 lenders are creditors of Lendy.
3. 'Old' and 'New' P2P loans have the lenders in a direct contractual nexus with the borrower. Lendy is the Agent. In that case, in the first instance, lenders are not creditors of Lendy simply because they own a loan part in these loans. - There must be some additional reason for these lenders to become creditors.
4. However there is a great deal of prima facie evidence that lenders losses from the P2P loans will spring at least in part, from breaches in agency and trust by Lendy. In that case there is a high chance that Lendy owe a civil liability to lenders in many of the P2P loans.
I will be asking RSM / FCA to take the pragmatic view that ALL Lendy lenders be considered as creditors of Lendy to the extent capital and contracted interest remains outstanding.*
There are a number of salient reasons why it is important that lenders are considered creditors of Lendy as it will frame the course of the administration.
* This does not mean P2P loan lenders relinquish their direct claim on the security of each loan, the Loan Contracts are what they are. It means in addition to that they are creditors of Lendy to the extent that Lendy may likely be shown in future to be at fault for some or all of any shortfall in recovery from disposal of the security
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gc
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Post by gc on May 31, 2019 19:21:17 GMT
Does anyone know how to do this in Open Office please? Hi sirius. I don't personally use Open Office though have a few years ago. I imagine all steps are the same, except when you get to step 6, and from what I remember, Calc is quite straightforward in sorting/filtering data. Use my steps for the data part, but incorporate this simple guide into it and you will have your required results. www.youtube.com/watch?v=AN9ohO3nRn8
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Post by valueinvestor123 on Jun 1, 2019 2:49:49 GMT
That’s not good. Anyone knows an estimated recovery figure and likely timeframe?
Any precedents? What did Collateral investors receive in the end?
Is it more or less costly to run down/auction off the book by appointment of administrators than when Lendy did it?
Thanks and my commiserations. I still have quite a large sum stuck in there.
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Post by qdot on Jun 1, 2019 6:03:17 GMT
Re: administrators update email 31/5/19 I think the most important part of this is the 3rd paragraph: 'We understand that, for the purposes of the Insolvency Act 1986, certain Investors may also be creditors of Lendy, and we are assessing this position with our legal advisors. Further correspondence will be issued on this in due course. '
RSM will have been pondering if investors are creditors. This is important for many reasons , not least because the duty of the administrator is to Lendy's creditors.
FWIW this is my belief: 1. There are (at least) 3 categories of unredeemed Lendy loans - Model 1 (non-P2P loans), 'old P2P' (pre 5/0318 loans) and 'new P2P' (post 5/03/18 loans). The deductions from recoveries of defaulted loans due to investors vary greatly with each loan category.
2. Model 1 loans have the lenders providing funds to Lendy who then pass them on to a specified purpose. Returns are contingent on the recovery from the security , but there is no covenant from the borrower to the lenders.
In that case it seems clear that Model 1 lenders are creditors of Lendy.
3. 'Old' and 'New' P2P loans have the lenders in a direct contractual nexus with the borrower. Lendy is the Agent. In that case, in the first instance, lenders are not creditors of Lendy simply because they own a loan part in these loans. - There must be some additional reason for these lenders to become creditors.
4. However there is a great deal of prima facie evidence that lenders losses from the P2P loans will spring at least in part, from breaches in agency and trust by Lendy. In that case there is a high chance that Lendy owe a civil liability to lenders in many of the P2P loans. I will be asking RSM / FCA to take the pragmatic view that ALL Lendy lenders be considered as creditors of Lendy to the extent capital and contracted interest remains outstanding.*
There are a number of salient reasons why it is important that lenders are considered creditors of Lendy as it will frame the course of the administration. * This does not mean P2P loan lenders relinquish their direct claim on the security of each loan, the Loan Contracts are what they are. It means in addition to that they are creditors of Lendy to the extent that Lendy may likely be shown in future to be at fault for some or all of any shortfall in recovery from disposal of the security
Where do you think Lendy Wealth customers sit in this summary?
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duck
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Post by duck on Jun 1, 2019 6:09:43 GMT
...What did Collateral investors receive in the end? ..... A year and a bit in and whilst a few loans have been redeemed/refinanced there is still a long way to go. I don't expect so see anything back from Col for at least another year. assuming there is anything left in the pot.
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Post by rhea117 on Jun 1, 2019 7:01:24 GMT
Re: administrators update email 31/5/19
I think the most important part of this is the 3rd paragraph: 'We understand that, for the purposes of the Insolvency Act 1986, certain Investors may also be creditors of Lendy, and we are assessing this position with our legal advisors. Further correspondence will be issued on this in due course. '
RSM will have been pondering if investors are creditors. This is important for many reasons , not least because the duty of the administrator is to Lendy's creditors.
FWIW this is my belief:
1. There are (at least) 3 categories of unredeemed Lendy loans - Model 1 (non-P2P loans), 'old P2P' (pre 5/0318 loans) and 'new P2P' (post 5/03/18 loans). The deductions from recoveries of defaulted loans due to investors vary greatly with each loan category.
2. Model 1 loans have the lenders providing funds to Lendy who then pass them on to a specified purpose. Returns are contingent on the recovery from the security , but there is no covenant from the borrower to the lenders.
In that case it seems clear that Model 1 lenders are creditors of Lendy.
3. 'Old' and 'New' P2P loans have the lenders in a direct contractual nexus with the borrower. Lendy is the Agent. In that case, in the first instance, lenders are not creditors of Lendy simply because they own a loan part in these loans. - There must be some additional reason for these lenders to become creditors.
4. However there is a great deal of prima facie evidence that lenders losses from the P2P loans will spring at least in part, from breaches in agency and trust by Lendy. In that case there is a high chance that Lendy owe a civil liability to lenders in many of the P2P loans.
I will be asking RSM / FCA to take the pragmatic view that ALL Lendy lenders be considered as creditors of Lendy to the extent capital and contracted interest remains outstanding.*
There are a number of salient reasons why it is important that lenders are considered creditors of Lendy as it will frame the course of the administration.
* This does not mean P2P loan lenders relinquish their direct claim on the security of each loan, the Loan Contracts are what they are. It means in addition to that they are creditors of Lendy to the extent that Lendy may likely be shown in future to be at fault for some or all of any shortfall in recovery from disposal of the security
Sorry if this is a silly question. Surely an investor would get more back than a creditor? Creditors would get funds back from the company's assets. Say 10% to 50% Their cash flow at end was Terrible Investors would get funds back from the ring fenced secured loans. Say 50 to 100% IF WE TRUST RICS VALUATIONS
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cwah
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Post by cwah on Jun 1, 2019 7:11:20 GMT
...What did Collateral investors receive in the end? ..... A year and a bit in and whilst a few loans have been redeemed/refinanced there is still a long way to go. I don't expect so see anything back from Col for at least another year. assuming there is anything left in the pot. Collateral investors received after 1 years an administrator bill high enough to eat out 85% of the good loans who paid back 100%+interest. Surely after 2 years they'll receive another administrator bill eating the remaining amount recovered.
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Greenwood2
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Post by Greenwood2 on Jun 1, 2019 7:29:05 GMT
Re: administrators update email 31/5/19
I think the most important part of this is the 3rd paragraph: 'We understand that, for the purposes of the Insolvency Act 1986, certain Investors may also be creditors of Lendy, and we are assessing this position with our legal advisors. Further correspondence will be issued on this in due course. '
RSM will have been pondering if investors are creditors. This is important for many reasons , not least because the duty of the administrator is to Lendy's creditors.
FWIW this is my belief:
1. There are (at least) 3 categories of unredeemed Lendy loans - Model 1 (non-P2P loans), 'old P2P' (pre 5/0318 loans) and 'new P2P' (post 5/03/18 loans). The deductions from recoveries of defaulted loans due to investors vary greatly with each loan category.
2. Model 1 loans have the lenders providing funds to Lendy who then pass them on to a specified purpose. Returns are contingent on the recovery from the security , but there is no covenant from the borrower to the lenders.
In that case it seems clear that Model 1 lenders are creditors of Lendy.
3. 'Old' and 'New' P2P loans have the lenders in a direct contractual nexus with the borrower. Lendy is the Agent. In that case, in the first instance, lenders are not creditors of Lendy simply because they own a loan part in these loans. - There must be some additional reason for these lenders to become creditors.
4. However there is a great deal of prima facie evidence that lenders losses from the P2P loans will spring at least in part, from breaches in agency and trust by Lendy. In that case there is a high chance that Lendy owe a civil liability to lenders in many of the P2P loans.
I will be asking RSM / FCA to take the pragmatic view that ALL Lendy lenders be considered as creditors of Lendy to the extent capital and contracted interest remains outstanding.*
There are a number of salient reasons why it is important that lenders are considered creditors of Lendy as it will frame the course of the administration.
* This does not mean P2P loan lenders relinquish their direct claim on the security of each loan, the Loan Contracts are what they are. It means in addition to that they are creditors of Lendy to the extent that Lendy may likely be shown in future to be at fault for some or all of any shortfall in recovery from disposal of the security
Sorry if this is a silly question. Surely an investor would get more back than a creditor? Creditors would get funds back from the company's assets. Say 10% to 50% Their cash flow at end was Terrible Investors would get funds back from the ring fenced secured loans. Say 50 to 100% IF WE TRUST RICS VALUATIONS Do Lendy have any funds to pay back creditors? We will find out, but I doubt it, particularly after the administrators get paid. All the money is in the loans and the most important thing is that the administrators do not have access to those funds. Even suggesting that all lenders are creditors seems like a bad idea (even if the intention is that lenders are both creditors and investors).
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adrianc
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Post by adrianc on Jun 1, 2019 7:33:10 GMT
Sorry if this is a silly question. Surely an investor would get more back than a creditor? Creditors would get funds back from the company's assets. Say 10% to 50% Their cash flow at end was Terrible Investors would get funds back from the ring fenced secured loans. Say 50 to 100% IF WE TRUST RICS VALUATIONS Do Lendy have any funds to pay back creditors? We will find out, but I doubt it, particularly after the administrators get paid. All the money is in the loans and the most important thing is that the administrators do not have access to those funds. Even suggesting that all lenders are creditors seems like a bad idea (even if the intention is that lenders are both creditors and investors). The administrators have only said that certain lenders are creditors - and they're those of us in the "old terms" loans (PBL27/31/56/DFL1/2), where we lent to Lendy who lent to the borrower. We clearly are creditors there, rather than investors. But for every other loan, we're clearly investors rather than creditors.
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gon
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Post by gon on Jun 1, 2019 7:40:26 GMT
Have we got a legal beagle amongst us who could perhaps put our minds at ease (without any commitment of course!). Surely, IF Lendy have followed the FCA rules and the FCA have ensured they have done so, then the “loan book” will simply be managed by the company who steps in, effectively separate from the administration of Lendy (once things get moving)?
Investors funds should be ring fenced and each loan should have its own ring fenced security, as mentioned in previous posts (and set out on Lendys website). Therefore each loan will be dealt with individually and any recoveries will only be subject to any costs involved in each and distributions made to investors in each loan accordingly, totally separate to the Lendy administration?
Apologies if this has already been covered, or if got any of it wrong, but would be good to get a legal aspect rather than have such uncertainty or speculation.
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ian
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Post by ian on Jun 1, 2019 7:44:56 GMT
2 key aspects for me. Cash - “Any amounts, which are due to you from the proceeds of a sale of property (or any other security) will be held on trust for you and paid into the segregated client account. If Lendy were to become insolvent, an insolvency practitioner would be appointed and would distribute the funds in the segregated client account back to lenders. Lenders’ money in the segregated client account would not be distributed to our other creditors.” In terms of cash IF this has been adhered to cash lost in transit (post 20th) or on account should be repaid. In terms of my loans against property the Segregated Security Holding should ensure all security (i.e. the Legal Charge and any debentures) were held by a third party security trustee – Saving Stream Security Holding Ltd. This company exists solely to hold security for and on behalf of our lenders and this adds an additional layer of security to provide comfort to our lenders. Again if this has been adhered to the question is will each individual recovery be repatriated to investors in that particular investment rather than allocated to a recovery pool. Your views? Is it too much to hope the administrators will just be creditors too? How can the FCA allow this account to be raided? No - but there are 3 pots here. Cash which should be ring fenced and sent to investors (unless it’s been plundered - which would be a criminal act) Loans which recovered funds should go to investors - capital with recovered interest split between investors and lendy Recovered interest that is received by lending is its earning which would pay staff deliver profit - this should pay admistrators and pay lendy creditors.
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Mucho P2P
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Post by Mucho P2P on Jun 1, 2019 7:57:57 GMT
Re: administrators update email 31/5/19
I think the most important part of this is the 3rd paragraph: 'We understand that, for the purposes of the Insolvency Act 1986, certain Investors may also be creditors of Lendy, and we are assessing this position with our legal advisors. Further correspondence will be issued on this in due course. '
RSM will have been pondering if investors are creditors. This is important for many reasons , not least because the duty of the administrator is to Lendy's creditors.
FWIW this is my belief:
1. There are (at least) 3 categories of unredeemed Lendy loans - Model 1 (non-P2P loans), 'old P2P' (pre 5/0318 loans) and 'new P2P' (post 5/03/18 loans). The deductions from recoveries of defaulted loans due to investors vary greatly with each loan category.
2. Model 1 loans have the lenders providing funds to Lendy who then pass them on to a specified purpose. Returns are contingent on the recovery from the security , but there is no covenant from the borrower to the lenders.
In that case it seems clear that Model 1 lenders are creditors of Lendy.
3. 'Old' and 'New' P2P loans have the lenders in a direct contractual nexus with the borrower. Lendy is the Agent. In that case, in the first instance, lenders are not creditors of Lendy simply because they own a loan part in these loans. - There must be some additional reason for these lenders to become creditors.
4. However there is a great deal of prima facie evidence that lenders losses from the P2P loans will spring at least in part, from breaches in agency and trust by Lendy. In that case there is a high chance that Lendy owe a civil liability to lenders in many of the P2P loans.
I will be asking RSM / FCA to take the pragmatic view that ALL Lendy lenders be considered as creditors of Lendy to the extent capital and contracted interest remains outstanding.*
There are a number of salient reasons why it is important that lenders are considered creditors of Lendy as it will frame the course of the administration.
* This does not mean P2P loan lenders relinquish their direct claim on the security of each loan, the Loan Contracts are what they are. It means in addition to that they are creditors of Lendy to the extent that Lendy may likely be shown in future to be at fault for some or all of any shortfall in recovery from disposal of the security
Another point of considerable significance is RSM specific request “OTHER MATTERS”. This is a direct request to the lenders for assistance in supplying any material we have concerning the “dealings or conduct” of Lendy that we know about, but the administrators will not readily know about at this early stage. It will assist RSM in their “investigation”. The more information that RSM have, means: (a) the less their fees will be as they have to do less investigative work (b) the more chance they will have of obtaining a Court order for a clawback if needed. <- that is the important one to us. (c) enough info might lead RSM to discovering a legal slip-up by LB. I have already passed on my preliminary info to RSM. I have a lead on some further information that I will be researching in the coming weeks. Every piece of info is vital. Treat it like a puzzle, one piece does not amount to much, the more pieces that RSM have, the better the picture they can form of what really happened. My rough calculations arrive at circa £22m of interest that Lendy will have received for the company, before the extra fees that they were known for tacking on. This money went somewhere. It does not cost that much to run a P2P company of Lendy size!!
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Post by valueinvestor123 on Jun 1, 2019 9:01:46 GMT
A year and a bit in and whilst a few loans have been redeemed/refinanced there is still a long way to go. I don't expect so see anything back from Col for at least another year. assuming there is anything left in the pot. Collateral investors received after 1 years an administrator bill high enough to eat out 85% of the good loans who paid back 100%+interest. Surely after 2 years they'll receive another administrator bill eating the remaining amount recovered. Ok so I guess this is going to be a test whether these measures put in place in compliance with the FCA, in order to ensure an orderly wind down of loans in case of administration bla bla, are worth anything at all...Because if the admin costs wipe out everything, then this will potentially ruin the whole p2p sector for good as the remainder is only lining the pockets of administrators and solicitors. Oh well...it was fun while it lasted. Is this likely to have a shock/knock on effects on other platforms? Assetz Capital is my other big one. If people start pulling money out, I guess they all fall down pretty quickly, no?
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Post by valueinvestor123 on Jun 1, 2019 9:13:45 GMT
Is it too much to hope the administrators will just be creditors too? How can the FCA allow this account to be raided? No - but there are 3 pots here. Cash which should be ring fenced and sent to investors (unless it’s been plundered - which would be a criminal act) Loans which recovered funds should go to investors - capital with recovered interest split between investors and lendy Recovered interest that is received by lending is its earning which would pay staff deliver profit - this should pay admistrators and pay lendy creditors. But if there is no recoverable interest, how will the administrators (or whoever will be running down the pond) get paid? They won’t do it for free and I don’t think interest get be recovered, unless they sell the properties/projects above the valuations? Or will the administrators simply change the calculation methods? For example, 700k loan for a 1m valuation: recovered: 300k, recalculated interest for the period: 400k (if it drags on over a number of years). Or is this complete non-sense? Just curious how they will be calculating everything.
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averageguy
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Post by averageguy on Jun 1, 2019 9:59:05 GMT
....waits for update on bank reconciliation...the rest seems guesswork
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