j
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Penguins are very misunderstood!
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Post by j on Oct 24, 2014 16:21:57 GMT
In light of recent loan issues, is it appropriate for both lenders who either hold units or are actually owed interest still (be it monthly paid or as a bullet end of term payment) have an entitlement to vote on how AC pursue monies owed. It seems only unit holders have the privilege, yet those who have sold their units somewhere along the line but, are still owed a significant level of interest have absolutely no say on how their owed interest should be retrieved!
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tonyr
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Post by tonyr on Oct 24, 2014 16:40:15 GMT
Interest can now be fractions of a pence - it would be impractival and make no difference to the vote to include tiny interest holders. Anyone who wants to retain the right to vote can do so by retraining £10 of the loan - if you want to retain the right to vote then retain part of the loan.
I would be in favour of all loan part holders voting in proportion to their loan parts plus interest.
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pikestaff
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Post by pikestaff on Oct 24, 2014 16:41:36 GMT
There are loans (some of the bridges) where my only exposure is unpaid interest, so you might expect me to demand a vote.
I'm ambivalent about that. The Ts and Cs are specific that only current owners get to vote, so a change would require a change to Ts and Cs. Also, if past owners were to be included, then all votes would need to be weighted in proportion to individuals' total exposure. I don't know how easy it would be for AC to do this even if they wanted to. In addition, I think it would be very rare for the votes of past owners to make a difference.
By and large, therefore, I'm happy to leave things as they are.
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Oct 24, 2014 16:43:31 GMT
Interest can now be fractions of a pence - it would be impractival and make no difference to the vote to include tiny interest holders. Anyone who wants to retain the right to vote can do so by retraining £10 of the loan - if you want to retain the right to vote then retain part of the loan. I would be in favour of all loan part holders voting in proportion to their loan parts plus interest. Maybe a minimum level of interest should then be applied (say £10). Either way, with all this supposed technology floating about, it's probably (I'm assuming here as I'm no software programmer) fairly easy for AC to send emails & collate responses from those who are owed interest, not just unit holders.
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Post by Ton ⓉⓞⓃ on Oct 24, 2014 16:44:04 GMT
Normally every £1 is a vote.
It doesn't make any sense to say you can vote because it's £1 of principle owed, you can't vote because it £1 of interest owed to you.
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bigfoot12
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Post by bigfoot12 on Oct 24, 2014 16:49:42 GMT
If the Ts&Cs are consistent and state that only holders of principal get to vote then I am happy with that.
I don't particularly want to get lots of emails because I am owed a few pence in accrued interest. Also if I have managed to sell just before an event of default I will be breathing a huge sigh of relief!
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Post by batchoy on Oct 24, 2014 16:54:10 GMT
In light of recent loan issues, is it appropriate for both lenders who either hold units or are actually owed interest still (be it monthly paid or as a bullet end of term payment) have an entitlement to vote on how AC pursue monies owed. It seems only unit holders have the privilege, yet those who have sold their units somewhere along the line but, are still owed a significant level of interest have absolutely no say on how their owed interest should be retrieved! Unit holders only, people who divested themselves of the loan relinquished their their right to have a say when they sold their loan parts and did so with the knowledge that any the payment of accrued interest was dependent on the loan completing and being paid off. If you include those that have divested themselves of their loan parts but are owed accrued interest (who could have done so with insider or foreknowledge of the failure of the loan) and who in terms of number may well out number the current loans holder, how do you weight their vote against against that of the loan holders in term of what they held, if so when or in terms if accrued interest etc. Votes are currently weighted in terms of holding.
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j
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Penguins are very misunderstood!
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Post by j on Oct 24, 2014 17:11:22 GMT
In light of recent loan issues, is it appropriate for both lenders who either hold units or are actually owed interest still (be it monthly paid or as a bullet end of term payment) have an entitlement to vote on how AC pursue monies owed. It seems only unit holders have the privilege, yet those who have sold their units somewhere along the line but, are still owed a significant level of interest have absolutely no say on how their owed interest should be retrieved! Unit holders only, people who divested themselves of the loan relinquished their their right to have a say when they sold their loan parts and did so with the knowledge that any the payment of accrued interest was dependent on the loan completing and being paid off. If you include those that have divested themselves of their loan parts but are owed accrued interest (who could have done so with insider or foreknowledge of the failure of the loan) and who in terms of number may well out number the current loans holder, how do you weight their vote against against that of the loan holders in term of what they held, if so when or in terms if accrued interest etc. Votes are currently weighted in terms of holding. I take into consideration part of the point you make. I think a limit would be the most appropriate because if you flip your argument, one can retain/buy a tiny amount of a loan (not sure if pennies are doable with the new website, but probably a £1 holding can be), is it then appropriate for someone who might be owed, say, £1000+ in interest not to have a vote at all if they no longer hold units, when someone with £1 holding & pennies owed in interest can? Ts & Cs are respected of course & rightly so but, there is no reason not to alter them if a majority feels it appropriate
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sl75
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Post by sl75 on Oct 24, 2014 17:14:35 GMT
I'd think it depends on how the capital and interest recoveries rank when a partial recovery occurs (and I've not checked the T&Cs on this matter - maybe someone else has?)
1. If capital and interest rank equally - so that with a 50% recovery, 50% of the accrued interest and 50% of the capital would be paid, then they should also be ranking equally in terms of voting rights.
2. If a 50% recovery would be paid entirely to capital, this implies the interest is subordinated to the capital. As the recovery rights are different, there's no reason for the voting rights to be the same.
3. If a 50% recovery would be used to repay the accrued interest in full with the remainder going to capital, this implies that capital is subordinated to the interest - similarly the recovery rights are different, and there's no reason for the voting rights to be the same.
Broadly speaking, the latter two cases would be analogous to the relative voting power and recovery outcomes of first and second charge-holders.
In any case, due to the strong correlation between those holding rights to receive capital and those holding rights to receive interest (as a large portion of capital-holders will also be owed interest), voters from one category would certainly be taking potential voters in the other category's interests into account.
Next step: research what happens for partial recoveries on this platform, and what this implies for voting choices...
[Edit: actually, another point to be made is that those owed ONLY interest have, in effect, already had a partial recovery (of the entire capital amount, or almost all of it if they sold at a discount), paid for by those who purchased the loan parts from them]
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surby
Minor shareholder in Assetz Capital
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Post by surby on Oct 24, 2014 17:26:52 GMT
I favour only unit holders having a vote, as pre T&Cs. But I would like AC to get much better at posting information and responding when it says it will, even if that is only to revise the timeline and explain its own delay. I am hoping the UX person will address this sooner rather than later.
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andy2001
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Post by andy2001 on Oct 24, 2014 17:40:43 GMT
As someone who sold all my units of the loan that caused this thread to be started with only a day or two to spare, I still think only current holders should get to vote.
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Post by chris on Oct 24, 2014 17:52:56 GMT
Interest can now be fractions of a pence - it would be impractival and make no difference to the vote to include tiny interest holders. Anyone who wants to retain the right to vote can do so by retraining £10 of the loan - if you want to retain the right to vote then retain part of the loan. I would be in favour of all loan part holders voting in proportion to their loan parts plus interest. Maybe a minimum level of interest should then be applied (say £10). Either way, with all this supposed technology floating about, it's probably (I'm assuming here as I'm no software programmer) fairly easy for AC to send emails & collate responses from those who are owed interest, not just unit holders. I'm just the techie so don't really care either way on which methodology is adopted, that's for others in the business to comment on, but as a technical point was raised - the easiest solution would actually be an on-site vote rather than collating external responses. There's probably a few other scenarios where lender votes would be nice to be able to hold more easily so no doubt this will be implemented at some point.
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kermie
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Post by kermie on Oct 24, 2014 19:16:17 GMT
On-site voting will be the way to go chris in the future, but there's many more important things to focus on before that. It seems to me that AC is trying to make things simpler and easier to manage for lenders (which I support), and to me the biggest time-saver would be a notification system for updates/missed payments/other interesting events. Without that, lenders need to watch the forum and web-site like hawks (to paraphrase pikestaff I think). |
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mikes1531
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Post by mikes1531 on Oct 25, 2014 3:03:55 GMT
Those who who are still owed their capital are likely to be far more exposed than those just missing half a months interest. The above assumes that interest is paid monthly, but in many cases it isn't. Some development loans can last more than a year with no interest being paid until the end. When loans default and the monthly payments stop, interest accrues at the default rate until the matter is resolved -- and that can take a considerable time.
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