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Post by Deleted on Jun 22, 2019 13:11:16 GMT
Loan repayments owed to investors are taken upfront as interest held in the client account and due to be repaid to investors on a monthly basis. Capital recovery following administration and the sale of the security isn't a loan repayment, the loan contract defaulted 12 months ago. RSM are referring to existing good loans currently owing loan repayments of funds already in the client account (Taken upfront) but unavailable for withdrawal until reconciliation allows the FCA to remove the restriction on dispersing those funds. HQ security has been sold, there's no reason to restrict information such as the sale price, yet that is exactly what is happening. Something isn't right. If LB knew the administration was on the cards he wouldn't have been sending out emails up to the day before administration stating some compromise had been reached and payment was imminent, it would have been a waste of time, which leads me to suspect that the administration was sudden, forced and HQ has played a part in LY becoming insolvent, possibly banking on taking particularly high fees to the detriment of investors and then refused by the FCA. Without the fees, LY couldn't pay expenses, and so was insolvent. Did they not seek permission to dispose of the security/freehold/leasehold? That would certainly lead to the FCA removing LB as he would have been in breach of the restriction. The FCA would also have had the authority to freeze bank accounts without notification to LY, so perhaps that is what took place and then LB used the usual smoke and mirrors to unfreeze them, only to be placed into administration a few days later. Sorry but no. Interest payments are not repayments because it doesnt diminish the sum outstanding. Capital recovered via realisation of a security asset is clearly a repayment.
Dictonary definition repayment - the action of paying back a loan.
There is no requirement for administrators to provide information to third parties which lenders are, they are responsible to the creditors/charge holder which in this case is SSSH & Lendy not individual lenders. It is up to Lendy/SSSH to determine if they will pass that info on to lenders. It may be revealed in the administration report but I dont believe it is required. Seen plenty of admin reports where it isnt.
I disagree. The funds received from the sale of HQ have nothing to do with SSSH. Normal loan repayments were in the client account before the administrators took over and have already been subject to upfront fees when arranging the loan, there's nothing further to deduct from them by any party and they are not subject to any legal action or fees by the administrators, they simply need to be allocated in their entirety back to the lenders. Whether the administrators will hand back those fees in one lump sum (instead of monthly for the rest of the loan term) remains to be seen, but they can't be allocated elsewhere as part of the wind down because they are in a segregated account. Recoveries however are subject to Lendy fees to realise the recoveries, particularly the recoveries so far on HQ as there will be administrators and lawyers to pay from whatever is sat in the client account (which is not part of SSSH). Once the security was sold there was no further involvement by SSSH. The funds from the sale should be sent to the segregated client account from which LB transfers out fees and disperses the remaining funds to lenders. He may have instead sent the funds to a Lendy Ltd account and then transferred the remaining to the client account for disbursement, but either way the asset previously held by SSSH (be it a charge, the freehold, leasehold or both) left SSSH when LB signed contracts as our agent. We've no information yet on what the compromise is that he mentioned as the "further information" promised never transpired. Those funds are going to be subject to all kinds of deductions to pay for the mess of HQ into administration if LB didn't have the sale proceeds transferred to the client account first. If however he did transfer all proceeds directly into the client account first, then it's likely the legal and 3rd party deductions won't be taken from it, and instead those lawyers and costs will be treated as creditors to be repaid from Lendy assets alone. In no reality should lenders be paying the creditors of Lendy Ltd in administration from funds held in the segregated client account beyond the reasonable fees Lendy should have taken acting as agent. I'd put money on it (if I had any) that the first opportunity the FCA had to review the transactions was when LB submitted figures in order to authorise payment to investors, and at the same time emailing us to expect payment imminently, but that he hadn't sought permission to sell the security in the first place, hence he would have been in breach of the restriction causing all assets frozen until a reconciliation can take place. With all assets frozen creditors such as lawyers or even the electricity bill can't be paid, and so Lendy Ltd became insolvent. Loan repayments already in the client account from day one of their respective loans are going to be treated differently to everything else in that account because there can be no question that Lendy had already taken their fees upfront, and so they can not be subject to any further deductions. They are just sat there, in advance, waiting to be allocated to investors over the course of the loan's term on a monthly basis. With the company winding down those funds should theoretically be payable to lenders in one lump sum once the reconciliation is complete, the administrator's wind down will address the capital recovery which is not yet in the client account.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 22, 2019 13:46:01 GMT
Sorry but no. Interest payments are not repayments because it doesnt diminish the sum outstanding. Capital recovered via realisation of a security asset is clearly a repayment.
Dictonary definition repayment - the action of paying back a loan.
There is no requirement for administrators to provide information to third parties which lenders are, they are responsible to the creditors/charge holder which in this case is SSSH & Lendy not individual lenders. It is up to Lendy/SSSH to determine if they will pass that info on to lenders. It may be revealed in the administration report but I dont believe it is required. Seen plenty of admin reports where it isnt.
I disagree. The funds received from the sale of HQ have nothing to do with SSSH. Dont think I said they did. However, the charge is in favour of SSSH and they are the appointer of the administrators. Normal loan repayments were in the client account before the administrators took over and have already been subject to upfront fees when arranging the loan, there's nothing further to deduct from them by any party and they are not subject to any legal action or fees by the administrators, they simply need to be allocated in their entirety back to the lenders. Whether the administrators will hand back those fees in one lump sum (instead of monthly for the rest of the loan term) remains to be seen, but they can't be allocated elsewhere as part of the wind down because they are in a segregated account. There are no normal loan payments ie interest as the retained interest has run out. Upfront arrangement fees will have been taken at drawndown, but ongoing management fees are deducted monthly as interest is paid. As all funds retained for this purpose have been exhausted there is agian nothing to return. Fees & interest have been acrruing and are due in line with Lendy terms, current version of which states they will be paid ahead of capital.Recoveries however are subject to Lendy fees to realise the recoveries, particularly the recoveries so far on HQ as there will be administrators and lawyers to pay from whatever is sat in the client account (which is not part of SSSH). Once the security was sold there was no further involvement by SSSH. The administrators of the borrowing company will deduct fees due for the administration prior to returning the balance to SSSH/Lendy, subsequent deductions & payments will depend on t&Cs being applied. RSM may also deduct any fees incurred for directly resolving that specific situation subesquently (a point TBD) The funds from the sale should be sent to the segregated client account from which LB transfers out fees and disperses the remaining funds to lenders. He may have instead sent the funds to a Lendy Ltd account and then transferred the remaining to the client account for disbursement, but either way the asset previously held by SSSH (be it a charge, the freehold, leasehold or both) left SSSH when LB signed contracts as our agent. We've no information yet on what the compromise is that he mentioned as the "further information" promised never transpired. Those funds are going to be subject to all kinds of deductions to pay for the mess of HQ into administration if LB didn't have the sale proceeds transferred to the client account first. Yes, in a segregated client account, they should not be anywhere near Lendy's own accounts under FCA rules. Funds from leasehold only as freehold was owned by a company outside of administration & FCA regulation (Again may subsequently be pulled in but currently not relevant)If however he did transfer all proceeds directly into the client account first, then it's likely the legal and 3rd party deductions won't be taken from it, and instead those lawyers and costs will be treated as creditors to be repaid from Lendy assets alone. In no reality should lenders be paying the creditors of Lendy Ltd in administration from funds held in the segregated client account beyond the reasonable fees Lendy should have taken acting as agent. Agree, in regards fees due to Lendy & 3rd parties working for Lendy outside of the direct administration. As noted above RSM may be able to claim fees directly related to their management of the specific loan (Beaufort Securities court ruling) I'd put money on it (if I had any) that the first opportunity the FCA had to review the transactions was when LB submitted figures in order to authorise payment to investors, and at the same time emailing us to expect payment imminently, but that he hadn't sought permission to sell the security in the first place, hence he would have been in breach of the restriction causing all assets frozen until a reconciliation can take place. With all assets frozen creditors such as lawyers or even the electricity bill can't be paid, and so Lendy Ltd became insolvent. Sale of security is actually in the hands of HQ adminsitrators and Lendy would act on their advice. Lendy has been operating under FCA restrictions (VREQ) since Nov so it seems unlikely FCA would have had no knowledge of proceedings. The security property is not an asset of Lendy so could be argued that disposal was not subject to FCA restrictions only the distibution of the proceeds from client account. (Purely based on specific wording on register) Loan repayments already in the client account from day one of their respective loans are going to be treated differently to everything else in that account because there can be no question that Lendy had already taken their fees upfront, and so they can not be subject to any further deductions. They are just sat there, in advance, waiting to be allocated to investors over the course of the loan's term on a monthly basis. With the company winding down those funds should theoretically be payable to lenders in one lump sum once the reconciliation is complete, the administrator's wind down will address the capital recovery which is not yet in the client account. See above. There isnt much in the way of such funds as nearly all loan are accruing interest not interest on account. The funds retained to cover intererest/fees due actually belong to the borrower until due so any payment to lenders of such monies will be subject to what happens with any loan redemptions of in term loans. Any loans redeeming ahead of term (unlikely) undue interest will be returned to borrower (assuming no minimum interest term)
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thedog
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Post by thedog on Jun 22, 2019 15:44:02 GMT
I'm hesitant to stick my nose into this very detailed debate, expecially as I've no particular knowledge of this loan and only a modest exposure to Lendy but a more general point about the timing of the release of funds occurs to me.....
In principle under the P2P model we are not "Creditors" of Platforms. We are customers, "Investors" (the terminology used so far by the Administrators) in specific loans. I've seen some comment on here however that the model might not hold true especially for loans made under earlier versions of T&Cs and in those cases we might be Creditors of Lendy itself. I have no idea if that is correct or not but consider the possible consequences if it is. If for some / all loans we are Creditors of Lendy (rather than Investors in those specific loans) it seems to me very possible / logical that the recoveries from those loans are not ring-fenced to Investors in those loans but are part of the Lendy estate and would therefore be available to all Creditors.
If there is any legal doubt whatsoever about this I would therefore expect the Administrators not to release any funds until that is resolved. Just think about the mess they get in if they release funds to P2P Investors and then it turns out that those Investors were Creditors of Lendy not Investors and the money should have gone to all Creditors. Some have had over-recovery, some under-recovery, what if there are not enought future recoveries to correct that, how do they compensate for the delay in catching up etc etc.....
And now consider what the "known" Creditors of Lendy are doing. I've not looked into how Lendy itself was funded but I assume Banks, PE and shareholder / founder loans. They will be relatively small in number (so easier to organise than tens of thousands of P2P investors) and legally advised (at least initially for little or no cost from internal legal resources or from law firms "reading in to the case" for free for client-relationship reasons). If whatever initial decision the Administrators arrive at does not maximise recoveries for those Creditors (they would want to find a way to make as many good recovery loans as possible Creditors and bad recovery loans Investors) they may well challenge that decision in the Courts. Investors (LAG) might also seek to challenge any decision in the opposite diection. If either of those happens distributions may be limited until the legal position is clarified.
There may be no question about our status and it all runs smoothly but I'm just saying there is scope for considerable delay while who gets a share of what is argued over and potentially litigated.
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Post by Deleted on Jun 22, 2019 15:53:05 GMT
I disagree. The funds received from the sale of HQ have nothing to do with SSSH. Dont think I said they did. However, the charge is in favour of SSSH and they are the appointer of the administrators. What charge are you talking about? The freehold and leasehold have been sold.
Normal loan repayments were in the client account before the administrators took over and have already been subject to upfront fees when arranging the loan, there's nothing further to deduct from them by any party and they are not subject to any legal action or fees by the administrators, they simply need to be allocated in their entirety back to the lenders. Whether the administrators will hand back those fees in one lump sum (instead of monthly for the rest of the loan term) remains to be seen, but they can't be allocated elsewhere as part of the wind down because they are in a segregated account. There are no normal loan payments ie interest as the retained interest has run out. Upfront arrangement fees will have been taken at drawndown, but ongoing management fees are deducted monthly as interest is paid. As all funds retained for this purpose have been exhausted there is agian nothing to return. Fees & interest have been acrruing and are due in line with Lendy terms, current version of which states they will be paid ahead of capital. Again, funds held in the client account are not subject to any deductions by Lendy Ltd, that would contaminate Lendy fees with investor fees, effectively making the segregation null and void as it would no longer contain only investor funds. Recoveries however are subject to Lendy fees to realise the recoveries, particularly the recoveries so far on HQ as there will be administrators and lawyers to pay from whatever is sat in the client account (which is not part of SSSH). Once the security was sold there was no further involvement by SSSH. The administrators of the borrowing company will deduct fees due for the administration prior to returning the balance to SSSH/Lendy, subsequent deductions & payments will depend on t&Cs being applied. RSM may also deduct any fees incurred for directly resolving that specific situation subesquently (a point TBD) The funds from the sale should be sent to the segregated client account from which LB transfers out fees and disperses the remaining funds to lenders. He may have instead sent the funds to a Lendy Ltd account and then transferred the remaining to the client account for disbursement, but either way the asset previously held by SSSH (be it a charge, the freehold, leasehold or both) left SSSH when LB signed contracts as our agent. We've no information yet on what the compromise is that he mentioned as the "further information" promised never transpired. Those funds are going to be subject to all kinds of deductions to pay for the mess of HQ into administration if LB didn't have the sale proceeds transferred to the client account first. Yes, in a segregated client account, they should not be anywhere near Lendy's own accounts under FCA rules. Funds from leasehold only as freehold was owned by a company outside of administration & FCA regulation (Again may subsequently be pulled in but currently not relevant) Once again, the leasehold/freehold have been sold, the proceeds of which should be in the client account.If however he did transfer all proceeds directly into the client account first, then it's likely the legal and 3rd party deductions won't be taken from it, and instead those lawyers and costs will be treated as creditors to be repaid from Lendy assets alone. In no reality should lenders be paying the creditors of Lendy Ltd in administration from funds held in the segregated client account beyond the reasonable fees Lendy should have taken acting as agent. Agree, in regards fees due to Lendy & 3rd parties working for Lendy outside of the direct administration. As noted above RSM may be able to claim fees directly related to their management of the specific loan (Beaufort Securities court ruling) Almost a moot point, if they take a whopping £2m in fees that's still only 1%-2% of the loanbook, particularly when Lendy have numerous assets such as the building they work from in order to pay the administrators. I'd put money on it (if I had any) that the first opportunity the FCA had to review the transactions was when LB submitted figures in order to authorise payment to investors, and at the same time emailing us to expect payment imminently, but that he hadn't sought permission to sell the security in the first place, hence he would have been in breach of the restriction causing all assets frozen until a reconciliation can take place. With all assets frozen creditors such as lawyers or even the electricity bill can't be paid, and so Lendy Ltd became insolvent. Sale of security is actually in the hands of HQ adminsitrators and Lendy would act on their advice. Lendy has been operating under FCA restrictions (VREQ) since Nov so it seems unlikely FCA would have had no knowledge of proceedings. The security property is not an asset of Lendy so could be argued that disposal was not subject to FCA restrictions only the distibution of the proceeds from client account. (Purely based on specific wording on register) Regardless of who sold the freehold/leasehold, it had the effect of diminishing investor capital and interest, precisely what the FCA were acting to avoid. I can not envisage the FCA authorising a transaction to release the freehold/leasehold which placed unsecured investors at a 96% recovery, while Lendy under their regulation secure far less than that in a compromise, and then go on to put the company into administration anyway. This is the figure we need to know and no one is telling us some 6 weeks after the sale.
Loan repayments already in the client account from day one of their respective loans are going to be treated differently to everything else in that account because there can be no question that Lendy had already taken their fees upfront, and so they can not be subject to any further deductions. They are just sat there, in advance, waiting to be allocated to investors over the course of the loan's term on a monthly basis. With the company winding down those funds should theoretically be payable to lenders in one lump sum once the reconciliation is complete, the administrator's wind down will address the capital recovery which is not yet in the client account. See above. There isnt much in the way of such funds as nearly all loan are accruing interest not interest on account. The funds retained to cover intererest/fees due actually belong to the borrower until due so any payment to lenders of such monies will be subject to what happens with any loan redemptions of in term loans. Any loans redeeming ahead of term (unlikely) undue interest will be returned to borrower (assuming no minimum interest term) Again I'm speaking of the remaining loans which are, hence those funds have a special status.
Edit - unsure why some words are appearing in a larger font, they aren't in the text editor.
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Post by Deleted on Jun 22, 2019 15:59:56 GMT
I'm hesitant to stick my nose into this very detailed debate, expecially as I've no particular knowledge of this loan and only a modest exposure to Lendy but a more general point about the timing of the release of funds occurs to me.....
In principle under the P2P model we are not "Creditors" of Platforms. We are customers, "Investors" (the terminology used so far by the Administrators) in specific loans. I've seen some comment on here however that the model might not hold true especially for loans made under earlier versions of T&Cs and in those cases we might be Creditors of Lendy itself. I have no idea if that is correct or not but consider the possible consequences if it is. If for some / all loans we are Creditors of Lendy (rather than Investors in those specific loans) it seems to me very possible / logical that the recoveries from those loans are not ring-fenced to Investors in those loans but are part of the Lendy estate and would therefore be available to all Creditors.
If there is any legal doubt whatsoever about this I would therefore expect the Administrators not to release any funds until that is resolved. Just think about the mess they get in if they release funds to P2P Investors and then it turns out that those Investors were Creditors of Lendy not Investors and the money should have gone to all Creditors. Some have had over-recovery, some under-recovery, what if there are not enought future recoveries to correct that, how do they compensate for the delay in catching up etc etc.....
And now consider what the "known" Creditors of Lendy are doing. I've not looked into how Lendy itself was funded but I assume Banks, PE and shareholder / founder loans. They will be relatively small in number (so easier to organise than tens of thousands of P2P investors) and legally advised (at least initially for little or no cost from internal legal resources or from law firms "reading in to the case" for free for client-relationship reasons). If whatever initial decision the Administrators arrive at does not maximise recoveries for those Creditors (they would want to find a way to make as many good recovery loans as possible Creditors and bad recovery loans Investors) they may well challenge that decision in the Courts. Investors (LAG) might also seek to challenge any decision in the opposite diection. If either of those happens distributions may be limited until the legal position is clarified.
There may be no question about our status and it all runs smoothly but I'm just saying there is scope for considerable delay while who gets a share of what is argued over and potentially litigated.
We're customers so far as we are paying a fee to Lendy for their services as agent, however we are beneficiaries to the capital and interest they hold for us on trust. Lendy has changed their terms multiple times without notice which (as per the most recent terms) puts them in first place to take unlimited fees before the rest is forwarded to us. This is highly likely to be seen as an unfair contractual term not least because it diminishes investor power over their capital, but also by way of never notifying anyone of the multiple significant changes it has made over the past 18 months and giving no one the opportunity to reject them and exit the platform. On the pre-FCA terms there was no p2p relationship at all, investors lent to saving stream and saving stream made loans to customers. Those investors may well find that they are unsecured creditors of Lendy and not beneficiaries of funds held in trust.
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thedog
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Post by thedog on Jun 22, 2019 18:09:54 GMT
I'll bow to the superior knowledge of others about the history and therefore possible outcome - my point is that until who is a Creditor and who is an Investor is entirely resolved, and there is no further risk of legal challenge, the Administrators may well be reluctant to distribute much cash.
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Post by Deleted on Jun 22, 2019 18:49:07 GMT
I'll bow to the superior knowledge of others about the history and therefore possible outcome - my point is that until who is a Creditor and who is an Investor is entirely resolved, and there is no further risk of legal challenge, the Administrators may well be reluctant to distribute much cash. Under insolvency law they have eight weeks to resolve it as part of their comprehensive report. Four weeks and one day have passed since the company went into administration, so three weeks and six days remaining, if not before.
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thedog
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Post by thedog on Jun 22, 2019 20:45:37 GMT
My point is that can be challenged in the Courts.
The 8 week report is just a set of proposals which are then voted on by Creditors.
BUT if there is a dispute over who is a Creditor I would expect that to have to be decided in the Courts. (Maybe the Administrators can practively seek a judgement if they think it's unclear, I don't know).
Of course it's possible no-one will dispute this, we will see, but whatever proposal the Administrators make there will be parties who would benefit from a different interpretation so, if they can organise themselves and it looks worth the cost, a challenge looks possible to me. If they are challenged (and as I say they might not be) I think it very unlikely the Administrators will make distributions of disputed amounts - indeed I'd expect an injunction against them doing so. Mihgt be sorted in a few weeks but definitely legal risk it isn't I'm afraid....
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iRobot
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Post by iRobot on Jun 22, 2019 21:07:08 GMT
I'll bow to the superior knowledge of others about the history and therefore possible outcome - my point is that until who is a Creditor and who is an Investor is entirely resolved, and there is no further risk of legal challenge, the Administrators may well be reluctant to distribute much cash. Under insolvency law they have eight weeks to resolve it as part of their comprehensive report. Four weeks and one day have passed since the company went into administration, so three weeks and six days remaining, if not before. Or they ask the courts for an extension?
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iRobot
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Post by iRobot on Jun 22, 2019 21:15:22 GMT
We're customers so far as we are paying a fee to Lendy for their services as agent, however we are beneficiaries to the capital and interest they hold for us on trust. Lendy has changed their terms multiple times without notice which (as per the most recent terms) puts them in first place to take unlimited fees before the rest is forwarded to us. This is highly likely to be seen as an unfair contractual term not least because it diminishes investor power over their capital, but also by way of never notifying anyone of the multiple significant changes it has made over the past 18 months and giving no one the opportunity to reject them and exit the platform. On the pre-FCA terms there was no p2p relationship at all, investors lent to saving stream and saving stream made loans to customers. Those investors may well find that they are unsecured creditors of Lendy and not beneficiaries of funds held in trust. But do we? Lendy derive a fee as a function of being an intermediary in a transaction between lender and borrower, but do lenders actually pay Lendy for the service? For example our deposits to the platform go into the segregated client account, and every £100 allocated to a loan, is wholly attributed to the capital amount owed to the lender by the borrower. So they aren't used for fees. Lendy retain their fees and interest (along with lenders' interest) from the funds forwarded to the borrower. But that in the agreement with the borrower. The way I see it, it's the borrower paying those fees, not the lender. May sound trivial, but if it became a point of law ...
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Post by Deleted on Jun 22, 2019 22:09:54 GMT
We're customers so far as we are paying a fee to Lendy for their services as agent, however we are beneficiaries to the capital and interest they hold for us on trust. Lendy has changed their terms multiple times without notice which (as per the most recent terms) puts them in first place to take unlimited fees before the rest is forwarded to us. This is highly likely to be seen as an unfair contractual term not least because it diminishes investor power over their capital, but also by way of never notifying anyone of the multiple significant changes it has made over the past 18 months and giving no one the opportunity to reject them and exit the platform. On the pre-FCA terms there was no p2p relationship at all, investors lent to saving stream and saving stream made loans to customers. Those investors may well find that they are unsecured creditors of Lendy and not beneficiaries of funds held in trust. But do we? Lendy derive a fee as a function of being an intermediary in a transaction between lender and borrower, but do lenders actually pay Lendy for the service? For example our deposits to the platform go into the segregated client account, and every £100 allocated to a loan, is wholly attributed to the capital amount owed to the lender by the borrower. So they aren't used for fees. Lendy retain their fees and interest (along with lenders' interest) from the funds forwarded to the borrower. But that in the agreement with the borrower. The way I see it, it's the borrower paying those fees, not the lender. May sound trivial, but if it became a point of law ... Lendy aren't an intermediary and we should not be paying them a fee, but they altered their terms to allow that without consent. They should obtain their fees from the other side. They are merely managing our investments and did not have authorisation to take unlimited fees from our funds held in trust, it's not a pot to be dipped in and out of to pay their staff and meet their overheads, as well as outrageously high legal fees. Toward the end it was in lendy's interest to get as many bad loans and draw them out for as long as possible as that would give them the highest return than simply managing good loans. Quite a conflict of interests, no pun intended. By taking their fees upfront they could get a 25% capital return, take out all of their fees as if they had achieved a 100% capital return, and then have little motivation to do anything about the other 75% left in perpetual recovery. Now we see why monthly updates never seemed to go anywhere. Acting as agent they service the loans we would otherwise do ourselves. To facilitate that Lendy charge fees to the borrower ranging from arrangement fees, legal fees, to management fees, late payment fees etc. Theoretically with a good loan book that should be more than sufficient to cover the operating costs on the basis that repayments are consistent, securities properly valued and a steady stream of new investors/investments. We now know the pyramid collapsed due to failure of all aspects I've just mentioned. That's quite different to being a customer whereby we are paying them for a service. Previous terms did not give them the power to take much more than basic recovery fees from our capital and interest before it was repaid to us in full. In later terms Lendy altered that to allow them to take unlimited fees from our capital and interest first, passing on the rest to us. As no lender ever agreed to or was notified of such a substantial material change to the terms diminishing our control greatly, or indeed offered the ability to refuse them, it's highly likely any court would see them as falling under the Unfair Contract Terms Act and award in favour of an investor. To that end the administrators will be looking at the same and presumably want to come to the same conclusion as a court would as part of their insolvency proceedings. Issues come into play when new investors came on to the platform on the basis of the newer terms as they can't possibly be expected to agree to the current terms but then be pushed back onto previous versions. Similarly what happens if a new investor on the newer terms buys an older loan from the secondary market? It's a real tangled mess LB has left and 95% is down to compliance, or lack thereof. Decisions have been made along the road to it's downfall with little regard to the consequences, as long as money keeps coming into the pyramid and everyone is getting paid. The FCA put a stop to that practice by restricting the movement of client (our) assets, needing FCA approval to take fees from capital and interest returns. A couple of months later it all collapsed a few days after a huge recovery came in (with equally huge fees to take from it) under some kind of compromise, and now it's forced into administration by the FCA with none other than LB as the biggest secured creditor the administrators are working to recover for, potentially putting some or perhaps even all lenders behind him as unsecured creditors. Time will tell, but 2nd hand info I've been passed suggests that some investors will see a portion of funds back from one investment in particular in the coming working week, so that part at least may have already been answered.
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Post by Deleted on Jun 23, 2019 0:21:31 GMT
My point is that can be challenged in the Courts.
Under insolvency law no legal action against the company to become a creditor can be undertaken without permission of the administrators now that the company has become insolvent. If you make a formal request but are refused and want to go above the heads of the the administrators themselves then this requires the permission of the Court before you can even begin such action, and would be quite foolish as the best case result from legal action would place you as an ultimately unpaid creditor of Lendy Ltd's limited assets, it won't help with funds you are already a beneficiary of in the client account. The court would need to see evidence that you can recover both extensive legal fees and judgement from Lendy assets before allowing a case. Additionally I think you would be very rich and very foolish if you instead wanted to sue the administrators for some kind of malpractice in miscategorising you and 22,000 other individuals in the insolvency process. If Lendy had assets available in excess of the £190m in the loan book then most if not all investors would seek that kind of action to try and recover what they had lost through (if you can prove it) mismanagement and negligence, but Lendy doesn't have anything close to that, it appears that LB has made a point of asset stripping the company into various dissociated companies before the FCA placed restrictions preventing any further movements. Essentially, if you want to sue Lendy what and where are the assets you are suing against to give the courts a reasonable expectation of being able to recover judgement and costs from them? If you can't answer that then the court won't give you permission to spend their time going above the administrators professional heads to access assets you want to prove should be spread among you and 22,000 others. £190m loan book, a few million at best in Lendy assets, you would be suing for two or three pence in the pound of whatever meat is left on the bones as an involuntary secured creditor. If instead you want to go to court just to prove a point with no regard for costs, offer the court up front to pay all fees in advance regardless of the outcome or recovery availability and they might allow it, at least you can frame the judgement should you win and hang it in the office safe in the knowledge that you technically won, but lost far more to do so.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 23, 2019 1:35:04 GMT
Liam isn't a secured creditor of any of the companies in administration. He did have a charge over Lendy but that was satisfied. He does have charges over other group companies but they are currently outside the scope of the administration & not subject to FCA regulation.
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Post by p2plender on Jun 23, 2019 7:55:24 GMT
Could maybe take a fishing rod to Brooke's nice carp pond as recompense..
I'm sure it's well stocked given how much appears to have left Lendy coffers pre administration.
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Post by pjt1 on Jun 23, 2019 11:14:44 GMT
I think much of this is completely arbitrary. The company is in administration. None of the previous terms and conditions apply anymore. Think of an example where a company signed contracts promising a 50% of a four bed house in central London for £20,000 and, unsurprisingly, went bust. Would anyone seriously expect the administrators to follow through on the company’s contract and promises? Perhaps some here think the administrators are going to work for free or give us some cash from their own pocket. No they wouldn’t. That would absurd and actually impossible. What are we owed? We are owed the money we transferred to the platform less the money we took off the platform. Doesn’t matter what account the cash was in, what terms and conditions we were given for it, what interest or bonus was promised, or what “loan” it was in, that’s all we are owed and a percentage of that is all we will ever get from the liquidation of this company. What we will get is the above subject to the current valuation (or what anyone will pay for a part completed project as we have seen previously), and that failing to provide funds to complete a project has a huge impact upon the value when it ceases to be funded. For example, A project which has had only a third of its funds required to complete the project likely to be worth less than 10% of the finished value. Remember we have numerous sites that are part finished, exposed to the elements, subject to vandalism and reducing in value on a weekly basis. Some of the borrowers will likely have large claims into Lendy / investors already, for breach of the loan agreements to part funded projects that Lendy committed legally to, to provide the funds. Some borrowers will have bought land understanding and more importantly been legally issued with loan documents to state that Lendy could provide funds to complete the projects. They wouldn’t have bought the land in the first place without having the development funds in place. The Lendy platform messed up for investors, some borrowers and all the creditors and all parties have lost out. There is only one place to point the finger here - all fingers point to Lendy in most instances
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