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Post by samford71 on Jul 15, 2019 21:10:21 GMT
Must admit, I'm rather surprised at the very small spread between the recovery estimates for PBLs vs. DFLs. We have to wonder what sort of error bounds exists on those estimates. Given the range for both is 7% to 100%, I'd say the error bounds are quite large. Moreover, this is only for the 29 'live' PBLs and 25 'live' DFLs, not the 15 loans where security has already been realized. If the DFLs realize anything like 57%, pre costs, it will be quite a good result. That would be close to the historical norms which given the low quality of the loan book is a surprise.
What is not a surprise to me is that Lendy had no formal SLA with SSSH. Think about that: the agent had no formal recharging agreement with the trustee. 'Light touch" regulation strikes again. Instead just a 'make it up as you go along" waterfall calculation based on investor T&Cs. Any risk of poor corporate governance or conflict of interest? Don't worry .... we're Lendy! Lawyers for the investors and for the creditors could spends in years in court arguing over that. Someone could argue that there was no basis for the recharges between the two entities for the whole lifetime Lendy existed.
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Post by brummiefred on Jul 15, 2019 21:10:53 GMT
Knowing that they had creditor liabilities to Model 1 lenders it seems a mite imprudent to have a £1.8m dividend !!!
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nsinvestor
Member of DD Central
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Post by nsinvestor on Jul 15, 2019 21:12:41 GMT
I'm amazed that a dividend of £1.8m was paid out in Oct 2018 (which included Branksmere House at £800k+), which was a month after the FCA started taking a much closer interest and one month before the VREQ. Of even more interest is the fact that in Sep 18, loans for £1m from Metro Bank and £800k from LB were required to boost working capital, and one month later almost the same amount gets paid out of the Company to Lendy Group. I can understand that the office was not ready liquidity so exchanging the building for cash may have been sensible, but taking a £1m loan and then paying a £1m dividend?  |
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Post by steve11 on Jul 15, 2019 21:46:12 GMT
Can someone please clarify if we need to make a creditor claim as investors and also back up their answer by pointing us to where they gleaned the information from. Thanks in advance.
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KoR_Wraith
Member of DD Central
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Post by KoR_Wraith on Jul 15, 2019 21:48:46 GMT
Anyone else surprised that there was over £2 million sitting uninvested in lender accounts?
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bugs4me
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Post by bugs4me on Jul 15, 2019 21:53:23 GMT
I'm amazed that a dividend of £1.8m was paid out in Oct 2018 (which included Branksmere House at £800k+), which was a month after the FCA started taking a much closer interest and one month before the VREQ. Of even more interest is the fact that in Sep 18, loans for £1m from Metro Bank and £800k from LB were required to boost working capital, and one month later almost the same amount gets paid out of the Company to Lendy Group. I can understand that the office was not ready liquidity so exchanging the building for cash may have been sensible, but taking a £1m loan and then paying a £1m dividend? It's becoming more obvious (by the day almost) that the owners/directors were pretty certain in the direction that the business was heading - down and out. So milk it (no doubt legally) for as much as possible. Then call in the administrators just before the you know what hit the fan.
And don't mention the FCA. As per usual, as much use as a chocolate teapot. I really do wish they would start recruiting some staff with meaningful experience regarding the financial businesses they are meant to be monitoring - whether it be light touch or not. Often written about platforms being out of their depth regarding loan monitoring and recovery. Think it's fair to extend that ineptitude to the FCA.
Fortunately I was in the process of exiting the platform anyway so am 'ahead of the game' even with a 100% wipe out. Many folks though are or will not be so fortunate having invested under the misapprehension of FCA authorisation. Think it's long overdue that the supposed regulators could do with some regulating themselves. They do seem to operate off the back of a fag packet after the horse has bolted in my view.
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pence
Posts: 46
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Post by pence on Jul 15, 2019 21:54:33 GMT
What stood out to me from the downloadable document on rsm's website:
9.2 Since appointment, the Joint Administrators have incurred time costs of £493,775.
Appendix E: Partner Rate per hour: £625
Incredible. Partners can basically retire as multi millionaires after a single case like Lendy while others suffer high losses.
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cwah
Member of DD Central
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Post by cwah on Jul 15, 2019 21:57:54 GMT
Who received this £1 million in dividends?
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cwah
Member of DD Central
Posts: 949
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Post by cwah on Jul 15, 2019 22:01:57 GMT
What stood out to me from the downloadable document on rsm's website:
9.2 Since appointment, the Joint Administrators have incurred time costs of £493,775.
Appendix E: Partner Rate per hour: £625
Incredible. Partners can basically retire as multi millionaires after a single case like Lendy while others suffer high losses.
Their rate are pretty much crazy.
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adrianc
Member of DD Central
Posts: 10,026
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Post by adrianc on Jul 15, 2019 22:12:06 GMT
What stood out to me from the downloadable document on rsm's website:
9.2 Since appointment, the Joint Administrators have incurred time costs of £493,775.
Appendix E: Partner Rate per hour: £625
Incredible. Partners can basically retire as multi millionaires after a single case like Lendy while others suffer high losses.
Do you think the mechanic at your local franchised premium-brand car dealership gets paid the £100+/hr that's being charged for labour...?
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tombraider
Member of DD Central
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Post by tombraider on Jul 15, 2019 22:50:40 GMT
Which loan would only fetch 7p in the pound? Head of the list of usual suspects has to be Hastings, followed rapidly by the legal twins, with some of our friend Mr D's Bury-d treasure in with a chance. Who are the legal twins?
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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
Posts: 11,331
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Post by ilmoro on Jul 15, 2019 23:00:11 GMT
Head of the list of usual suspects has to be Hastings, followed rapidly by the legal twins, with some of our friend Mr D's Bury-d treasure in with a chance. Who are the legal twins? The two loans that were subject to legal action against Lendy - HR & MR
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withnell
Member of DD Central
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Post by withnell on Jul 16, 2019 7:55:31 GMT
What stood out to me from the downloadable document on rsm's website:
9.2 Since appointment, the Joint Administrators have incurred time costs of £493,775.
Appendix E: Partner Rate per hour: £625
Incredible. Partners can basically retire as multi millionaires after a single case like Lendy while others suffer high losses.
Do you think the mechanic at your local franchised premium-brand car dealership gets paid the £100+/hr that's being charged for labour...? The mechanic would if he were also an owner of the business, as a partner is!
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sl75
Posts: 2,092
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Post by sl75 on Jul 16, 2019 8:15:54 GMT
That's not how I'm reading it at all. 2.1 - "Background" simply documents the timeline, and has clearly been drawn up from concrete information, not just word-of-mouth. I presume that's the section you're referring to? Look into that in more detail... 2.1.7 shows the first hint of negativity - too much reliance on retail investment, and an inability of the directors to source institutional money. 2.1.8 seems very clear that the "underperforming loans" were the cause of the problem, leading to the loss of confidence and reduction in incoming investment. 2.1.9 seems very clear that the reduction in investment volume was what led to problems with developments, and an increase in non-performing loans. 2.1.11 seems very clear that the "public comment" was a demonstration of how investor confidence was being eroded, not the cause. 2.1.12-13 seems very clear that the continued reduction in investment was what killed the business's viability. It all reads to me as a very dispassionate and factual account that accords well with my recollections. ... what isn't directly addressed (but you need to read between the lines for it) was that the seeds of the downfall were planted earlier than any of these, when Lendy recklessly overcommitted to massive DFLs seemingly with no idea where the funds for the later tranches would come from.
2.1.7 shows they were already concerned about over-reliance on retail investment for this, and as I recall we were already seeing signs of loans not being fully funded as easily as before, yet despite not having secured the institutional funding they clearly knew was necessary to provide any certainty of funding, they still went ahead with committing to massive multi-million pound projects whilst the retail investors they were relying upon were clearly losing appetite for them.
Turning to another part of the report though - "B1 COMPANY C,REDITORS EXCLUDING EMPLOYEES AND CONSUMERS" includes significant sums to "Lendy Group Limited" - and one or two other group companies not in administration - they've got a bloody cheek! One would hope that any claims by group companies would at least be subordinated to claims from external parties...
Anyone got any idea why the entire group wasn't put into administration (e.g. making it easier to trace and/or claw back any funds that may have previously been siphoned off via the parent company), and what might be required if it were desirable to make that happen?
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jcb208
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Post by jcb208 on Jul 16, 2019 9:07:59 GMT
Will they be paying the interest owed on the loans they stopped paying on even though there was still interest on account such as PBL199
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