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 Dec 1, 2019 13:13:47 GMT
There were no documents but then unless you invested after March 18 those t&cs werent in force. The t&cs operating for most of the period merely asked you to accept the loan conditions for all ongoing lending the first time your lent by ticking a box. Loan conditions are not clearly defined, no reference to contract or finance docs, so could easily have meant the platform t&cs. Some of us did regularly chase visibility of loan contracts with Lendy but made little progress. Most lenders AFAICS didnt, they were getting 12% & didnt care/understand until things went smelly.
There seem to be two problems here
... some, presumably very expensive lawyers with full access to all relevant documentation, have concluded that the waterfall in the most recent t&cs should not be applied in full ... we know that because capital, non-recovery fees, and interest are being treated pari passu rather than interest ranking first. They seem to be basing this on the security documents (ie charges at CH) - application of proceeds clauses - this is actually to lenders benefit compared to the t&cs waterfall as capital is the major quotient of outstanding laibilities
... any claims regarding the t&cs I suspect would only result in a liability against Lendy for investors as unsecured creditors. There is no reference in any t&cs for model 2 loans prior to the March 18 version for priority of payment. There is no priority in the loan contracts (AFAICS). There is no priority in the security docs (AFIACS) There is no reference to default interest & the receipient in t&cs pre March 18, no reference to recipient in loan contract or security docs (AFAICS).
1) How did you get copies of Loan Agreements then? I was a sheep following a crowd assuming that if other people invest serious money they check legal docs. My exposure to Lendy is small, a few thousands. 2) I am aware that the previous T&Cs are more vague regarding what constituents a Loan Contract but I think that is even better for us as "fair contract rules" require the documents to be clear and any vague terms would be interpreted in our favour. Asking a customer to sign contract without showing it to him/her is definitely a deceptive tactic. 3) It is possible that the new T&Cs apply to the old contracts as they contain a relevant clause. Not sure what happens if there is a conflict between an existing Loan Contract and the new T&Cs. 4) I've noticed too that the Administrators rank interest/fees and capital equally. T&Cs gives Lendy a discretion to do this so this is not a breach of T&Cs. This discretion about waterfall rules is likely to be an unfair contract term as it allows Lendy to significantly change terms of the contract. 5) I disagree that voiding some unfair contract terms will make us unsecured creditors. This is possible true for loans which has been paid already but it is not true for the future distributions. Even if you are right it improves our position as it looks like there is going to be enough money to get at least a part of what should be ours. 6) I agree that the old T&C don't specify waterfall rules and who gets default interest. Voiding the new unfair T&Cs terms will definitely help with default interest, the biggest Lendy claim on recovered money. In the worst case default interest would be split between us and Lendy, in the best case would be payable to us. 7) what was Lendy standard interest in relation to investors interest? I haven't got any Loan Agreement to check myself. 8) The new T&Cs is a Finance Document itself: "These Terms constitute a Finance Document, as defined in the Loan Contract." 1) Provided as part of the London loans legal case. Obviously therefore only a snapshot. 3) I think there is a clause somewhere in the t&C's that state loan contracts take precedence in the event of a conflict. 4) Probably, though the t&C's have always given Lendy & SSSH discretion to vary terms & loan structure without lender consent 5)It depends on how it was challenged. We would be unsecured creditors because we would have to challenge unfair terms etc in the courts and any sums awarded against Lendy would be unsecured AIUI. If the challenge related to RSM application of the waterfall then any changes to that would be paid out as per the individual loans, not as a general claim against Lendy. (AFAIUI but on no legal basis) 7) Variable, 30-50% of lender rate. 8) In contract, finance docs defined as loan agreement security docs, any agreement between agent & borrower, anything designated as such by agent (so t&cs would fall under that) Lot of wriggle room there
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iRobot
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Post by iRobot on Dec 1, 2019 13:44:52 GMT
there was a video of a interview with LB and Tim posted on here a long time ago where LB said we are very good at it and it seems he was right. could somebody put that back up on here. i can't find it and don't know how to post pics/videos. FYI ... That's not Tim to Liam's right, that's Paul Riddell - erstwhile head of marketing / comms. Tim was out of the picture early to mid 2018 due to ill health and formally resigned July 2018. The original video(s) ( 1 | 2) were first aired mid August 2018.
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Post by supernumerary on Dec 1, 2019 14:59:38 GMT
Taking this one step further - if Lendy get to keep the lions share of the waterfall based on even say £50m recovery of the £165m loan book. There will still be £25m+ left over once the dust settles and then that would be set for distribution to the shareholders of lendy. Will Liam B be looking at a £20m payday? That’s what their legal advice of saying it seems if all this waterfall business is allowed to run as LB and his lawyers intended it seems that LY ltd in conjunction with sssh both in administration aka LB will have been a very profitable venture and one of the few P2P platforms to have made a profit.the returns that will come in if things stand as they are will make a company in administration millions of pounds of our funds to be distributed amongst shareholders of said failed companies namely LB.there was a video of a interview with LB and Tim posted on here a long time ago where LB said we are very good at it and it seems he was right. could somebody put that back up on here. i can't find it and don't know how to post pics/videos. , BOTH of your posts leave a bitter taste with me, because it confirms MY OWN thoughts after LOOKING at the example presented. There is a Lendy Service fee, then following that, a dividend apportionment of; 77% to lenders 23% to Lendy. This will PROBABLY be after, there has been a reduced sale on the asset…  I am LOST for words, BUT I am glad you can BOTH articulate them for me instead.
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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 Dec 1, 2019 15:23:01 GMT
Taking this one step further - if Lendy get to keep the lions share of the waterfall based on even say £50m recovery of the £165m loan book. There will still be £25m+ left over once the dust settles and then that would be set for distribution to the shareholders of lendy. Will Liam B be looking at a £20m payday? That’s what their legal advice of saying it seems if all this waterfall business is allowed to run as LB and his lawyers intended it seems that LY ltd in conjunction with sssh both in administration aka LB will have been a very profitable venture and one of the few P2P platforms to have made a profit.the returns that will come in if things stand as they are will make a company in administration millions of pounds of our funds to be distributed amongst shareholders of said failed companies namely LB.there was a video of a interview with LB and Tim posted on here a long time ago where LB said we are very good at it and it seems he was right. could somebody put that back up on here. i can't find it and don't know how to post pics/videos. , BOTH of your posts leave a bitter taste with me, because it confirms MY OWN thoughts after LOOKING at the example presented. There is a Lendy Service fee, then following that, a dividend apportionment of; 77% to lenders 23% to Lendy. This will PROBABLY be after, there has been a reduced sale on the asset… I am LOST for words, BUT I am glad you can BOTH articulate them for me instead. Im sorry but both quoted post is rubbish AIUI. That £25m doesnt go to the shareholders, it goes to Lendy creditors after fees of which investors are about 9000. The £25m is also massively wrong, Lendy get 21% under the waterfall (example calcs are wrong!!), which is £10m on a £50m recovery. There are £12m of creditors already without considering any legal claims from the 9000.
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sb
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Post by sb on Dec 1, 2019 16:18:05 GMT
1) How did you get copies of Loan Agreements then? I was a sheep following a crowd assuming that if other people invest serious money they check legal docs. My exposure to Lendy is small, a few thousands. 2) I am aware that the previous T&Cs are more vague regarding what constituents a Loan Contract but I think that is even better for us as "fair contract rules" require the documents to be clear and any vague terms would be interpreted in our favour. Asking a customer to sign contract without showing it to him/her is definitely a deceptive tactic. 3) It is possible that the new T&Cs apply to the old contracts as they contain a relevant clause. Not sure what happens if there is a conflict between an existing Loan Contract and the new T&Cs. 4) I've noticed too that the Administrators rank interest/fees and capital equally. T&Cs gives Lendy a discretion to do this so this is not a breach of T&Cs. This discretion about waterfall rules is likely to be an unfair contract term as it allows Lendy to significantly change terms of the contract. 5) I disagree that voiding some unfair contract terms will make us unsecured creditors. This is possible true for loans which has been paid already but it is not true for the future distributions. Even if you are right it improves our position as it looks like there is going to be enough money to get at least a part of what should be ours. 6) I agree that the old T&C don't specify waterfall rules and who gets default interest. Voiding the new unfair T&Cs terms will definitely help with default interest, the biggest Lendy claim on recovered money. In the worst case default interest would be split between us and Lendy, in the best case would be payable to us. 7) what was Lendy standard interest in relation to investors interest? I haven't got any Loan Agreement to check myself. 8) The new T&Cs is a Finance Document itself: "These Terms constitute a Finance Document, as defined in the Loan Contract." 1) Provided as part of the London loans legal case. Obviously therefore only a snapshot. 3) I think there is a clause somewhere in the t&C's that state loan contracts take precedence in the event of a conflict. 4) Probably, though the t&C's have always given Lendy & SSSH discretion to vary terms & loan structure without lender consent 5)It depends on how it was challenged. We would be unsecured creditors because we would have to challenge unfair terms etc in the courts and any sums awarded against Lendy would be unsecured AIUI. If the challenge related to RSM application of the waterfall then any changes to that would be paid out as per the individual loans, not as a general claim against Lendy. (AFAIUI but on no legal basis) 7) Variable, 30-50% of lender rate. 8) In contract, finance docs defined as loan agreement security docs, any agreement between agent & borrower, anything designated as such by agent (so t&cs would fall under that) Lot of wriggle room there 3) there is one but it is badly written since T&Cs are part of Loan Contract. It doesn't say anything when the Loan Contract itself is inconsistent. 4) Yes, T&Cs give Lendy right to change Loan Contracts but this doesn't mean they can do whatever they want. Lendy is our agent and such it should act in our interest. 5) Sorry I don't understand you. "Unfair contracts terms" in T&Cs are voided by FCA as they have had never existed. That means default interest has wholly or partially accrued to investors. Lendy owns us money for the past distributions but for the future ones it should pay us default interest directly as it is held in trust, our asset. The same should happen when waterfall rules become void. I think we have a strong case against fairness of Lendy T&Cs, if this route is available to us. One important restriction is that it can only be used by consumers (individuals). What is an unfair term? 21. A term in a consumer contract is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. 22. Transparency is also fundamental to fairness. The Act requires that a written term in a consumer contract is expressed in plain and intelligible language and is legible. This sits alongside a more general requirement that consumers are given a real chance, before entering a contract, to see and understand all terms that could operate to their disadvantage (see paragraph 28 below). assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450410/Unfair_Terms_Explained.pdf
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Post by supernumerary on Dec 1, 2019 17:58:23 GMT
Im sorry but both quoted post is rubbish AIUI. That £25m doesnt go to the shareholders, it goes to Lendy creditors after fees of which investors are about 9000. The £25m is also massively wrong, Lendy get 21% under the waterfall (example calcs are wrong!!), which is £10m on a £50m recovery. There are £12m of creditors already without considering any legal claims from the 9000. I hope that you are right and it is NOT as bad, as I am thinking it could be...
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sl75
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Post by sl75 on Dec 2, 2019 16:40:37 GMT
I believe you are correct in that Lendy Ltd wouldn't be entitled to this accrual unless an SLA was agreed between Lendy Ltd and SSSH. What I meant regarding the 3% is that originally RSM/GT had worked out a plan to have a fixed 3% SLA between SSSH and Lendy Ltd in order to come to some kind of "fair and commercial agreement" and ensure there were adequate funds in Lendy Ltd in order to fund the administration. It was mentioned again in yesterday's update:
"In accordance with the terms of the service agreement, Lendy's fee for providing enforcement and recovery services to SSSHL is proposed to be 3% per annum of the gross realisations from the date of the default capped at a maximum of 10% of the gross realisations. This arrangement will replace any other fee arrangement that Lendy had in place prior with SSSHL and is considered by the Administrators to be reasonable, proportionate and market standard. It is subject to final approval by the conflict administrator."
However as Lendy Ltd is now apparently contractually entitled to significant fees, commission and penalty interest (ranking pari passu with investors) taken directly from loan recoveries as per the "security documents" as mentioned in yesterdays update, I'm not sure that any SLA would be necessary as Lendy Ltd would be awash with cash already.
Perhaps I'm mis-reading it, but as I understood that paragraph in the context of the wider document, the 3% per annum capped at 10% was intended to REPLACE the grossly unfair "waterfall", and that the current arrangements were illustrated for our convenience, so that if (or hopefully when!) the replacement is approved by the conflict administrator with appropriate consultation with the CLB, a new illustration can be given showing how much better off we are under the new arrangements?
Edit: ... and that as things currently stand the "Waterfall" as illustrated has been used to determine the worst case (for investors) in the event that the replacement is not approved by the conflict administrator, but that they don't expect this to be the final position.
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sam i am
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Post by sam i am on Dec 2, 2019 18:02:16 GMT
Following my email to Lendy/RSM last Friday: p2pindependentforum.com/post/358479 I have raised some further questions with them which I am posting for your reference. Some of the content has been drawn from the discussion on this thread and I thank everyone who has contributed here.
The purpose of my questions is to encourage RSM to look in detail at the contract terms and past processes at Lendy. I'm assuming that the administrators are professional people who would want to comply with (and be seen to comply with) all relevant laws. They should not take advantage of breaches committed by previous directors of Lendy to maximise returns to creditors. I'm hoping that they will do so and draw the same conclusions that many of us on this forum have and therefore avoid the need for other action.
Dear Lendy/RSM,
Thank you for your email [this is the one confirming they had received my initial questions]. I have now had an opportunity to undertake some further research and I have some additional questions. I reserve the right to ask further questions as and when they arise.
The basis of these questions is around legislation concerning unfair contract terms.
1. RSM is seeking legal advice regarding the dividend apportionment and enforcement of contract terms in favour of Lendy. Why do you feel the need to do this?
It is a legal requirement of companies to have clear and transparent terms of business with individuals. You should therefore be able to point to the terms and conditions and demonstrate to an average customer exactly what the terms are business are. You should be able to show clearly within the terms and conditions all fees which may impact the individual and exactly how the individual would be treated in different scenarios so they can determine the economic impact of them. If you are not able to do so and require legal opinion then the business terms are not clear and transparent.
Government guidance states: The CJEU [Court of Justice of the European Union] has explained that the requirement of plainness and intelligibility means that the term should not only make grammatical sense to the average consumer but must put the consumer into the position of being able 'to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it [the term]'.
2. RSM contends that payments due to Lendy (including but not limited to default interest) may be claimed from the realisation of assets. Please provide the documentation that has been made available to lenders specifically stating what payments Lendy would receive from borrowers and the levels of these payments.
Payments made by borrowers to Lendy directly impact the economic consequences to lenders in the case of default. In order for lenders to understand the contract they have entered it is necessary for Lendy to be transparent about their charges to borrowers. As far as I am aware contracts between Lendy and borrowers are confidential between these two parties and the charges have never been disclosed to lenders. If this is the case then these terms are not just unclear, they are hidden.
Government guidance states: It is a fundamental requirement of contractual fairness that consumers should always have a real opportunity to read and understand contracts before becoming bound by them. Terms whose purpose is to subject consumers to obligations of which they can have no knowledge at the time of contracting are open to serious objection.
3. The T&Cs of Lendy state: We may make such changes without your specific agreement and we may not always be able to give you advanced notice of such updates or amendments. Please confirm whether you believe this term is in compliance with law and the reasons for your view.
Government guidance states: A right for one party to alter the terms of the contract after it has been agreed, regardless of the consent of the other party, is under strong suspicion of unfairness and may well, in any case, be blacklisted for the purposes of Part 1 of the Act.
In particular relating to the last point, I can find no correspondence at all from Lendy regarding any changes to terms subsequent to the beginning of my membership in June 2015 although it appears that changes have been made. I would have expected clear communication from Lendy that a change is to be made; a statement showing what the changes are and how they would affect lenders; and a clear explanation of how lenders could end their contract with Lendy should they disagree with the new terms.
4. Relating to the above point. Please describe the process used by Lendy when making contract changes specifically including:
- copies of the communication sent to lenders advising of the changes
- details of how Lendy specifically pointed out what the changes are and the impact of them (rather than just expecting lenders to find them within the complete T&C text)
- details of how Lendy allowed lenders to end their contract if they were not happy with the new terms
Fundamentally, if this process cannot be clearly demonstrated then I content that lenders are only committed to the terms and conditions that applied at the date their membership started. This may significantly change the basis under which distributions are calculated.
5. Please confirm that the distributions made by RSM to lenders and creditors will comply fully with the law even if there were historic breaches in law and processes affecting lenders committed by previous directors of the business before the involvement of RSM.
6. I expect that RSM will do everything possible to operate Lendy in regard to applicable law and will critically review this not just in terms of current practices but also those that took place in the past. RSM undertook full diligence in ensuring that past practices by Lendy regarding AML checks were properly investigated and any breaches in process were rectified. I fully expect that RSM will undertake the same level of dilligence regarding past practices with contract terms and will similarly rectify the position where those terms and processes have been deficient. Please confirm that this is the case.
I recognise that the terms and conditions were written by previous directors of Lendy and not RSM. I also recognise that RSM have stated that they are seeking further advice on the matter of contract enforceability. I am therefore willing to allow RSM a reasonable time frame to resolve the issues above before considering other options.
Please provide full answers to my questions (both above and below) by 31 December 2019. I am happy for you to provide the answers as part of a publicly distributed set of FAQs (so long as the answers are specific to my questions and detailed in their response).
I will be publishing these questions on a public forum as I believe that many other lenders have similar concerns and will be very interested in your reply. However I hasten to add that all opinions expressed in this email are my own and I do not represent anyone else.
Best Regards Sam I Am
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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 Dec 2, 2019 20:42:25 GMT
I believe you are correct in that Lendy Ltd wouldn't be entitled to this accrual unless an SLA was agreed between Lendy Ltd and SSSH. What I meant regarding the 3% is that originally RSM/GT had worked out a plan to have a fixed 3% SLA between SSSH and Lendy Ltd in order to come to some kind of "fair and commercial agreement" and ensure there were adequate funds in Lendy Ltd in order to fund the administration. It was mentioned again in yesterday's update:
"In accordance with the terms of the service agreement, Lendy's fee for providing enforcement and recovery services to SSSHL is proposed to be 3% per annum of the gross realisations from the date of the default capped at a maximum of 10% of the gross realisations. This arrangement will replace any other fee arrangement that Lendy had in place prior with SSSHL and is considered by the Administrators to be reasonable, proportionate and market standard. It is subject to final approval by the conflict administrator."
However as Lendy Ltd is now apparently contractually entitled to significant fees, commission and penalty interest (ranking pari passu with investors) taken directly from loan recoveries as per the "security documents" as mentioned in yesterdays update, I'm not sure that any SLA would be necessary as Lendy Ltd would be awash with cash already.
Perhaps I'm mis-reading it, but as I understood that paragraph in the context of the wider document, the 3% per annum capped at 10% was intended to REPLACE the grossly unfair "waterfall", and that the current arrangements were illustrated for our convenience, so that if (or hopefully when!) the replacement is approved by the conflict administrator with appropriate consultation with the CLB, a new illustration can be given showing how much better off we are under the new arrangements?
Edit: ... and that as things currently stand the "Waterfall" as illustrated has been used to determine the worst case (for investors) in the event that the replacement is not approved by the conflict administrator, but that they don't expect this to be the final position.
I think you are misreading it. The 3% capped at 10% is merely Lendy's fee for managing the recovery on behalf of the Trustee who holds the security for lenders (it doesnt replace the interest they are owed contractually). This cost is part of the recovery fees along with the costs in incurred by the loan specific IP in realising the security - it is part one of the new waterfall. The second part is the dividend apportionment which covers capital & interest due to both lenders & Lendy. Under the T&CS, there is a waterfall for this, all interest due to both parties, then capital due to lenders, then any fees due not directly related to the security realisation. Under RSM dividend apportionment there is no priority in this section anymore, everything ranks equally. This means that rather than Lendy getting all its default interest, monitoring interest and investors their interest everyone gets part of everying they are owed pro rata. Taking RSMs incorrect example as they cant do maths.
£2000000 loan £60,000 interest
500,000 default interest 30,000 monitoring interest 10,000 exit fee
Total £2600000 Lendy owed 21%, lenders 79% (rounded)
Recovery £1,500000 Lendy '3%' fee £30,000
IP costs £70,000
Net recovery available for dividend apportionment £1,400,000
Lenders get 79% £1,106,000, Lendy 21% £294,000
Under t&cs waterfall
Assuming net recovery the same
Lendy get £530,000 (38%), lenders get £855,000 (60,000 interest, £795,000 capital) (62%)
I assume exit fee would come under other fees and rank last.
We are therefore much better off under RSMs distribution than Lendy T&Cs but still worse off than the original t&Cs (Also repeated in the recoveries policy after the new t&Cs were introduced, directly contradicting them but subsequently erased)
Note the RSM example is a particularly benign one. I suspect if the original waterfall had been applied to DFL012 investers would have received last than 25% return
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Post by rhea117 on Dec 3, 2019 9:24:31 GMT
Following my email to Lendy/RSM last Friday: p2pindependentforum.com/post/358479 I have raised some further questions with them which I am posting for your reference. Some of the content has been drawn from the discussion on this thread and I thank everyone who has contributed here.
The purpose of my questions is to encourage RSM to look in detail at the contract terms and past processes at Lendy. I'm assuming that the administrators are professional people who would want to comply with (and be seen to comply with) all relevant laws. They should not take advantage of breaches committed by previous directors of Lendy to maximise returns to creditors. I'm hoping that they will do so and draw the same conclusions that many of us on this forum have and therefore avoid the need for other action.
Great post/letter (Sam i am)! At 0845 this morning on BBC breakfast news - Lendy was mentioned. It was stated: creditors will get paid first and investors will get less than expected. Just does not feel right. T&C aside - what is the right thing to do RSM?
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Post by billy169 on Dec 3, 2019 9:39:13 GMT
I may be wrong..but I believe we are now called creditors
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sl75
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Post by sl75 on Dec 3, 2019 10:53:04 GMT
Recovery £1,500000 Lendy 3% £45,000 (not £30,000 which is only 2%)!!!
Why not £30,000?
it's 3% annual, so if in the illustrative example, the fee was accrued for 8 months, it would be 2% wouldn't it?
There are so many gross misreadings of it that I can see (including this one), that I'm neither fully convinced I'd misread it, nor fully convinced others have misread it in various other critical areas, and I don't really have time to study it in detail.
The CC, CLB, conflict administrator, etc. need to make sure they DO understand the various propositions with absolute clarity, so that any relevant parts can be challenged.
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garfield
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Post by garfield on Dec 3, 2019 13:21:43 GMT
At 0845 this morning on BBC breakfast news - Lendy was mentioned. It was stated: creditors will get paid first and investors will get less than expected. Are you sure, I just had a look on i-Player? Did you get the time right? Thanks
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sam i am
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Post by sam i am on Dec 3, 2019 14:43:46 GMT
Following my email to Lendy/RSM last Friday: p2pindependentforum.com/post/358479 I have raised some further questions with them which I am posting for your reference. Some of the content has been drawn from the discussion on this thread and I thank everyone who has contributed here.
The purpose of my questions is to encourage RSM to look in detail at the contract terms and past processes at Lendy. I'm assuming that the administrators are professional people who would want to comply with (and be seen to comply with) all relevant laws. They should not take advantage of breaches committed by previous directors of Lendy to maximise returns to creditors. I'm hoping that they will do so and draw the same conclusions that many of us on this forum have and therefore avoid the need for other action.
Great post/letter (Sam i am)! At 0845 this morning on BBC breakfast news - Lendy was mentioned. It was stated: creditors will get paid first and investors will get less than expected. Just does not feel right. T&C aside - what is the right thing to do RSM?
I didn't see the news item on the BBC although unless it was very specific I wouldn't read too much into it. There's a huge amount of detail involved and most discussion of the matter (including mine) is conjecture at this stage. I suspect the BBC will have picked up on a comment or opinion somewhere rather than having undertaken any original research of their own. Maybe they drew their statement from the latest update where RSM confirmed that they are obliged by law to maximise recoveries to creditors. And possibly journalists are reading this (public) forum and have seen posts here voicing the opinion that Lendy charges being part of the dividend distribution is not what was expected.
For what it's worth, this is my view:
I'm sure the administrators at RSM are intelligent, professional people who are fundamentally honest. You can't hold that kind of position and not take it seriously.
I'm also confident that the administrators are very aware that there were some questionable practices at Lendy before they got involved (they already questioned the AML procedures and are now asking for legal opinion about contract enforceability). I doubt that my email to them is saying much if anything they don't know already. What I'm aiming to do is get things out in the open.
I believe the administrators are caught between two legal positions: 1. The obligation to maximise returns to creditors (their statement)
2. The obligation to ensure that the business they are now running is (and was) operating in compliance with all relevant legislation (my assumption)
In regard to the second point it is my contention that if there were any breaches of legislation in the past, our rights as investors/consumers don't disappear because the company has gone into administration and now has different directors. In fact we may be in a better position because the current directors may have a better understanding of the law and have a greater desire to be seen to be complying with the law.
So I think the administrators are treading carefully. Any communications they make will be scrutinised not just by lenders but also by creditors, with both sides aiming to recover as much as possible. Both sides may well be left thinking that they might not get as much as they expected.
The administrators are clearly stating point 1 to lenders and not promising anything more but are also considering point 2 by stating that they are reviewing contract terms and there could be a further distribution. I doubt they would have held the door open to lenders in this way unless they genuinely believed there were questions to be answered on this point.
I suspect the administrators will continue to walk a fine line and not say too much until they are very confident of the full legal position. They will want to ensure that they can defend their position should it be challenged by either lenders or creditors.
All of the above is purely my opinion. I am not a lawyer.
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quidco
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Post by quidco on Dec 3, 2019 15:50:45 GMT
Given the loans are between lenders and borrowers we'd be better off arranging our own recoveries on defaults so the administrators can't snaffle hard earned cash but it's too late for that now really.
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