ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 30, 2019 11:19:40 GMT
Meanwhile, The Administrators meet to think up ever more inventive ways to grow fees.
All justifiable, very legal & above board, well within the "remit" of course!
The AML one is a doozy.
Lubbly Jubbly.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Nov 30, 2019 11:19:52 GMT
I think a lot of administrators and Lawyers are having a good Xmas. Not so much valuers and investors.
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sb
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Post by sb on Nov 30, 2019 11:37:47 GMT
Worth a go however I wouldn’t expect much from the FCA (who have apparently already reviewed the waterfall distributions and communication that you received yesterday). Rather than challenging their terms the FCA instead granted Lendy full authorisation in June 2019 . Liam Brooke, CEO of Lendy Ltd, said at the time: “We’re very pleased to have been given full authorisation by the FCA. It has been a long and sometimes challenging journey, which has involved a detailed review of our processes and policies and has helped us mature into a stronger and more robust business. Oh and then there was also the FCA ignoring the known cases of mis-selling of course... www.thetimes.co.uk/article/watchdog-cleared-lendy-despite-loans-mis-selling-qkzfkdqjn“Protecting consumers” as always... My guess is that "unfair contract terms" are handled by a different FCA department, which hopefully is more experienced and more sympathetic to investors. FCA could also be less defensive if all it has to do is make a decision that terms were unfair. It would be much harder to force them to admit an error and get them pay a compensation from their pocket. Will LAG submit a complain to FCA regarding unfair T&Cs?
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ilmoro
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'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 Nov 30, 2019 11:50:40 GMT
Worth a go however I wouldn’t expect much from the FCA (who have apparently already reviewed the waterfall distributions and communication that you received yesterday). Rather than challenging their terms the FCA instead granted Lendy full authorisation in June 2019 . Liam Brooke, CEO of Lendy Ltd, said at the time: “We’re very pleased to have been given full authorisation by the FCA. It has been a long and sometimes challenging journey, which has involved a detailed review of our processes and policies and has helped us mature into a stronger and more robust business. Oh and then there was also the FCA ignoring the known cases of mis-selling of course... www.thetimes.co.uk/article/watchdog-cleared-lendy-despite-loans-mis-selling-qkzfkdqjn“Protecting consumers” as always... My guess is that "unfair contract terms" are handled by a different FCA department, which hopefully is more experienced and more sympathetic to investors. FCA could also be less defensive if all it has to do is make a decision that terms were unfair. It would be much harder to force them to admit an error and get them pay a compensation from their pocket. Will LAG submit a complain to FCA regarding unfair T&Cs? Forget the t&cs, they arent relevant anymore, the waterfall isnt based on the t&cs because there is no priority of repayment after recovery costs, everything ranks equally. The loan contracts are the issue. Principally the fact that Lendy is entitled to a huge default interest payment which has a massive impact on their share of the recovery.
eg Lendy entitled to 23% of net recovery. No default interest 2% entitlement, or 3% pa increase as per AC, 5% entitlement
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rocky1
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Post by rocky1 on Nov 30, 2019 12:00:00 GMT
I think monetus is on the case with this and the FCA should find it easier for themselves to put past wrongs to right by firstly null and voiding these unfair T@Cs and showing that they are going to protect consumers rather than a few scheming individuals who set up platforms with only one intention in mind and fooling them into giving them the FCA seal of approval to basically scam thousands of decent people out of savings/pensions. COLL,LY and FS directors knew exactly what they were doing and should not be allowed to just it back and wait for even more of our money to flow their way
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susan
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Post by susan on Nov 30, 2019 12:23:27 GMT
'However, Lendy may, and Saving Stream Security Holding may, vary this order in their discretion'
Now that the company is in administration, who controls this 'discretion'?
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Monetus
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Post by Monetus on Nov 30, 2019 12:24:24 GMT
'However, Lendy may, and Saving Stream Security Holding may, vary this order in their discretion'
Now that the company is in administration, who controls this 'discretion'?
Take a wild guess... The firm who are obligated under the Insolvency Act to maximise returns for the creditors of Lendy Ltd.
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one21
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Post by one21 on Nov 30, 2019 12:30:45 GMT
My guess is that "unfair contract terms" are handled by a different FCA department, which hopefully is more experienced and more sympathetic to investors. FCA could also be less defensive if all it has to do is make a decision that terms were unfair. It would be much harder to force them to admit an error and get them pay a compensation from their pocket. Will LAG submit a complain to FCA regarding unfair T&Cs? Forget the t&cs, they arent relevant anymore, the waterfall isnt based on the t&cs because there is no priority of repayment after recovery costs, everything ranks equally. The loan contracts are the issue. Principally the fact that Lendy is entitled to a huge default interest payment which has a massive impact on their share of the recovery.
eg Lendy entitled to 23% of net recovery. No default interest 2% entitlement, or 3% pa increase as per AC, 5% entitlement
Ok so for an equitable solution what would you suggest? Considering that Lendy are no longer trading surely this should have some bearing on their entitlement - especially as it was due to their incompetence or engineered decline. Plus the fact that none of us had a chance to object to the loan contracts as we did not have access to them.
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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 Nov 30, 2019 12:36:05 GMT
'However, Lendy may, and Saving Stream Security Holding may, vary this order in their discretion'
Now that the company is in administration, who controls this 'discretion'?
The lawyers. As per the update, there is no discretion, its all based on the legal loan & security agreements which are currently inviolable
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quidco
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Post by quidco on Nov 30, 2019 13:10:06 GMT
I believe this is the form. I've assumed we have plenty of time to do this as they won't distirbute funds to the creditors until the end of the admninstration?
Yes no payment would be made until the very end of the admin and you’d also need to be able to quantify the true value of your claim so it’s too early to know the full extent of losses you may have suffered. From my previous experience of such matters I think we would also be able to claim the interest we are owed as well as the principal.
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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 Nov 30, 2019 13:11:06 GMT
Forget the t&cs, they arent relevant anymore, the waterfall isnt based on the t&cs because there is no priority of repayment after recovery costs, everything ranks equally. The loan contracts are the issue. Principally the fact that Lendy is entitled to a huge default interest payment which has a massive impact on their share of the recovery.
eg Lendy entitled to 23% of net recovery. No default interest 2% entitlement, or 3% pa increase as per AC, 5% entitlement
Ok so for an equitable solution what would you suggest? Considering that Lendy are no longer trading surely this should have some bearing on their entitlement - especially as it was due to their incompetence or engineered decline. Plus the fact that none of us had a chance to object to the loan contracts as we did not have access to them. Unfortunately, the fact that Lendy isnt trading is irrelevant, they are still entitled to the money under the existing contracts. That is the issue. Reasonable would be something more in line with interest norms, ie not 24-36% per year, AC charge 3%, Ablrate about 6%, unfortunately current legal advice is that reasonable isnt on the table. I suspect even if the loan contracts had been viewable, most investors wouldnt have done more than raise an eyebrow at the default rate (it was known on the forums that Lendy charged default interest for its own benefit), or even read them, as the default rate wasnt relevant & had no apparent impact on the recovery of capital.
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quidco
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Post by quidco on Nov 30, 2019 13:11:23 GMT
'However, Lendy may, and Saving Stream Security Holding may, vary this order in their discretion'
Now that the company is in administration, who controls this 'discretion'?
The lawyers. As per the update, there is no discretion, its all based on the legal loan & security agreements which are currently inviolable
Nothing is inviolable, if it was we wouldn't need lawyers!
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rocky1
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Post by rocky1 on Nov 30, 2019 13:13:26 GMT
good word ilmoro had to google its meaning. LB must have spent more time covering his arse and I'll gotten gains and future income than he ever did running his companies.
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Post by samford71 on Nov 30, 2019 13:51:15 GMT
No it means the administrators are attempting to enforce fees owed to Lendy Ltd that were allegedly written directly into the loan security documents/debentures by Lendy when the loans were originated. Essentially the loan/borrower agreements have apparently superseded the platform terms. "The security documents set out an order of priority of payment"This has nothing to do with the platform terms and conditions or any variation of them. The real relevant parts of the terms are: "9.1 The Loan Contract governs the terms of repayment of principal and payment of interest by the borrower."
"9.11 Details of the fees which Lendy charges borrowers are set out in the relevant Loan Contract, and these are, typically, an arrangement fee, an exit fee, and a loan monitoring fee."
Investors have never seen these security documents so won't have had any idea what fees would be contractually due to Lendy Ltd or indeed what their priority would be in the waterfall in this type of scenario although I do believe that one loan agreement may be out there in the public domain somewhere due to a well-publicised court battle to give you an idea. From the way I'm reading it the 3% "fixed" SLA will only be enforced if RSM run out of money from the Lendy Ltd pot to fund the administration having burnt through all the waterfall distributions cash. Are you certain about that? In an example 2017 security loan agreement it states
Interest 6.3. "In addition to the interest payable under clause 6.1, if the Borrower fails to make payment due under this agreement on the due date for payment, interest on the unpaid amount shall accrue daily, from the date of non-payment to the date of the actual payment (both before and after judgment), at 3% per month above the aggregate Interest rate". So yes there is a 3%/month accrual. Nonetheless, it's not clear to me from the loan docs that Lendy Ltd is entitled to this accrual. They are clearly the agent but the loan docs are not clear in terms of the distributions of accruals with the exception of the basic interest payable which is defined separately for both lenders and Saving Stream (which is the trading name for Lendy Ltd) in the term sheet. The term sheet notes precisely nothing about default accruals.
The relationship between the borrower and SSSH Ltd, with Lendy Ltd acting as agent, is defined by the loan agreement. I can't imagine any other view being upheld. Whether the loan agreement can be upheld as an efforceable SLA between the lender and the agent is opaque to me. The security loan docs used are fairly poorly drafted and say little or nothing about that.
Where is the loan docs do you see them setting out an order of priority of payment? I'm not seeing in the loan doc I've got but to be fair they are not all the same and evolved somewhat over the years.
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one21
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Post by one21 on Nov 30, 2019 13:52:08 GMT
Ok so for an equitable solution what would you suggest? Considering that Lendy are no longer trading surely this should have some bearing on their entitlement - especially as it was due to their incompetence or engineered decline. Plus the fact that none of us had a chance to object to the loan contracts as we did not have access to them. Unfortunately, the fact that Lendy isnt trading is irrelevant, they are still entitled to the money under the existing contracts. That is the issue. Reasonable would be something more in line with interest norms, ie not 24-36% per year, AC charge 3%, Ablrate about 6%, unfortunately current legal advice is that reasonable isnt on the table. I suspect even if the loan contracts had been viewable, most investors wouldnt have done more than raise an eyebrow at the default rate (it was known on the forums that Lendy charged default interest for its own benefit), or even read them, as the default rate wasnt relevant & had no apparent impact on the recovery of capital. Hmm.. maybe it wouldn't have had any impact on the recovery of our capital before Model 2 T&Cs were changed in their favour. (BTW to my detriment I didn't discover this forum until the London Loan debacle. I suppose there are a few thousand other passive investors in the same Lendy boat)
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