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Post by royevans586 on Oct 28, 2019 16:40:44 GMT
according to the terms and conditions. the loan book is ring fenced to prevent it being plundered in the event of FS going belly up. so the administrators cannot get their greasy mitts on it
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adrian77
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Post by adrian77 on Oct 28, 2019 17:09:56 GMT
agree with the above but how are the administrators going to get paid if the loan book does not cover their fees? I wonder just how much was left in the current account when the directors resigned!
Also as mentioned by others what is happening about the Barnsoldwich cottage - I have no idea how this ones stands legally. Also as I mentioned there (we were told) has been a deposit paid for the Newcastle student loan site and I wonder where we stand with that one?
Oh what a circus as the song says - sadly these directors ain't no Eva Peron!
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bg
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Post by bg on Oct 28, 2019 18:33:18 GMT
according to the terms and conditions. the loan book is ring fenced to prevent it being plundered in the event of FS going belly up. so the administrators cannot get their greasy mitts on it
I wouldn't necessarily agree with that. According to the T&C's net proceeds will be repaid to investors but net of what? Presumably that's net of expenses in selling the asset, which I am sure will include the administrators fees (as it would include any auction costs etc). What's the alternative? That the investors appoint their own representative to run the default process and pay them directly?
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pip
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Post by pip on Oct 28, 2019 18:50:23 GMT
according to the terms and conditions. the loan book is ring fenced to prevent it being plundered in the event of FS going belly up. so the administrators cannot get their greasy mitts on it
I wouldn't necessarily agree with that. According to the T&C's net proceeds will be repaid to investors but net of what? Presumably that's net of expenses in selling the asset, which I am sure will include the administrators fees (as it would include any auction costs etc). What's the alternative? That the investors appoint their own representative to run the default process and pay them directly? The FS FAQ’s did say the quote in paragraph below. Who will pay for the administrators if reality matches this who knows. Questions for the FCA. Imho without some significant funding to wind down the loan book, including legal and loan recovery costs, I can see the administrators turning round and saying not our problem. The FCA needs to step up here they signed off the plan when they gave FS regulatory approval: “In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions.“
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Post by emcg on Oct 28, 2019 18:55:59 GMT
This is an excerpt from the FAQ's page
"In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions."
This is reasonably clear, if true, that the administrators will only be able to claim payment via FS fees that are paid at the end of the loan period.
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arby
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Post by arby on Oct 28, 2019 20:02:00 GMT
It may be clear but its also unworkable in all cases. Administrators are not owners who take on the risk of profit or loss; they are paid to manage the run-off of the company and they will likely have necessitated some certainty of income or they wouldn't have taken on the role.
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Post by royevans586 on Oct 28, 2019 20:19:41 GMT
unworkable or not. they have to follow the rules like everyone else. no moving of the goalposts.
once the dust settles i am sure everything will become a lot clearer. as you say, they obviously ain't doing this for fun. once loans are repaid, i assume we as investors, as it was our money come first, then FS whose lump will be swallowed by the administrators and then if anything left returned to the asset owners. just my thoughts on how things may pan out. thoughts people.
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arby
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Post by arby on Oct 28, 2019 20:33:00 GMT
unworkable or not. they have to follow the rules like everyone else. no moving of the goalposts.
once the dust settles i am sure everything will become a lot clearer. as you say, they obviously ain't doing this for fun. once loans are repaid, i assume we as investors, as it was our money come first, then FS whose lump will be swallowed by the administrators and then if anything left returned to the asset owners. just my thoughts on how things may pan out. thoughts people.
They don't have to follow the rules set up by the previous owners though. The rules of the business have not worked and the business has failed. Administrators have to be free to act in the best interest of the creditors. Without them we get nothing back. I'm not arguing for them to take a massive cut, hopefully they can operate simply from the originally envisaged FS share of loan repayments, but if that's not enough then I'd rather they take a cut from my payment rather than just packing up and saying they're sorry but they can't do any more, then just writing off the debt so that I get nothing back.
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Post by royevans586 on Oct 28, 2019 21:04:12 GMT
i totally agree with your sentiments. something back if far better than the way FS did business. administration is 100% the best way forward to a good ending i can see a lot of the debtors settling up sharpish now that big boys are now involved. FS were far too easy to fob off, these guys wont be. it's gonna be a case of pay up or lose the lot........and some' they won't be taking any prisoners.
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iRobot
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Post by iRobot on Oct 28, 2019 21:43:28 GMT
I wouldn't necessarily agree with that. According to the T&C's net proceeds will be repaid to investors but net of what? Presumably that's net of expenses in selling the asset, which I am sure will include the administrators fees (as it would include any auction costs etc). What's the alternative? That the investors appoint their own representative to run the default process and pay them directly? The FS FAQ’s did say the quote in paragraph below. Who will pay for the administrators if reality matches this who knows. Questions for the FCA. Imho without some significant funding to wind down the loan book, including legal and loan recovery costs, I can see the administrators turning round and saying not our problem. The FCA needs to step up here they signed off the plan when they gave FS regulatory approval: “In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions.“ That's an accurate quote, but... (there's always a 'but'!) What's the payment waterfall as laid out in the Ts&Cs?? 6.2.5 Net proceeds of sale of Assets shall be used to settle amounts due in the following order:
- Principal amount of Loan which was funded by, and is repayable to, the Investors (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested);
- Direct costs incurred by FundingSecure through the setting up and the administration of the Loan including, but not limited to, storage costs, referral fees and valuation fees up to the date of sale;
- Interest due to the Investors up to the date of sale (allocated pro rata in accordance with the proportion of the Loan amount which each Investor invested);
- Administration fees due to FundingSecure not recovered through clause 6.2.5(ii) above;
- The balance (if any) will be returned to the Borrower.
(There is also 6.3 which is almost a copy and paste of 6.2.5 -- resulting in an erroneous link back to 6.2.5(ii) -- with the exception that point 5 see leftovers divvied up to lenders. Ha ha.) Does Administrator's fees become a 'direct cost' and paid ahead of any interest due? Answer: yes, according to an informative post from a former IP touching on the legalities as translated into practical terms. And it even makes the point that Administrators' payments will come ahead of secured creditors - ie ahead of your capital. A point backed up by global law firm DL Piper: " The holder of a fixed charge is entitled to the whole of the proceeds of sale of that asset without deductions other than the cost of realization." As for pawn loans... they ain't going to manage themselves and I doubt the redemption fees will cover and Administrators' rates. Still, may not be all doom and gloom. If there are any, then retained staff could keep some costs down. (For as long as FS/CG can keep them, of course. Staff will likely be looking for pastures new and I don't blame them - I'd be doing just that if I were in their shoes.) There could be some funds in the FS coffers to help cover Administrators fees, perhaps backed up by some fees due to FS realised from loans repaying in full. Won't know until the Administrators lay out their initial thoughts in the Proposal document due in seven or eight weeks time. TL;DRA) The administrators were appointed by the chargeholder and under legal precedent are entitled to remuneration when acting for the chargeholder on first charge securities. B) Platform Ts&Cs should not be relied upon. Ever. C) Speculation is futile (mine included!); await the Administrators proposal on (or before) the 18th December
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Mucho P2P
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Post by Mucho P2P on Oct 31, 2019 16:21:13 GMT
Update:
We (FundingSecure Action Group) now have opened channels of communications with the administrators C*&*o, the legal firm offering advice to C* (specialist in debt recovery) and the ex-Directors.
1. Any members who has any questions for either C*&*o or the law firm assisting in the administration, please forward them to me, by PM. The questions will be collated in a general group of questions to be sent to the administrators and their law firm at the start of next week. CG will then respond to the main set of queries in their next FAQ update.
Please note: They will not entertain individual questions/concerns at this time, however they will entertain “General queries” or queries on process that can be placed into the next FAQ.
2. C*&*o are seeking to provide their mandatory statement well within the 8 weeks’ time limit, hopefully within the next 2 weeks.
3. C*&*o have advised that the various trusts holding the ringfenced assets will need Court approval to be managed, liquidated and returned to lenders. An email will be sent out to all lenders regarding this matter in due course. A positive response will be required from the lenders to facilitate and expedite this matter. Please bear this in mind when reading their request.
MP2P
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pikestaff
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Post by pikestaff on Oct 31, 2019 17:59:40 GMT
This is an excerpt from the FAQ's page "In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions." This is reasonably clear, if true, that the administrators will only be able to claim payment via FS fees that are paid at the end of the loan period. That's not how I would read it. The words "cannot be used by the administrators to settle any debts due by FundingSecure" means, simply, cannot be used to pay FundingSecure's creditors. The administrators are not creditors of FundingSecure. If the adminstrators incur costs realising lenders' assets I think they are entitled to be paid out of the proceeds thereof, just as anyone else would be if they were employed for that purpose. They would not take the job on otherwise. What's not crystal clear from the quoted excerpt is whether the ring fencing applies to 100% of the interest (including FS's spread) or just the interest due to lenders. For example, if the borrower is paying 18% but lenders get 12%, does the difference stay inside the ring fence to offset realisation costs or does it flow out for the benefit of FS's creditors generally?
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Post by mrclondon on Oct 31, 2019 19:38:40 GMT
Ho hum .... the 'All active and past loans' page has now been disabled (just displays 'Page down for maintenance')
If any more updates are forthcoming, only visibility will be via the 'My Investments' page, unless the loan id is known.
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Post by brightspark on Oct 31, 2019 19:47:19 GMT
The concept of ring-fencing is misleading. It is used by the peer to peer industry to convince naive lenders that were a platform to fold, life would continue as normal other than that no new investments would be posted and that alternative lenders could step in to take things forward. The reality is different. The Administrators have practically carte blanche leaving investors completely exposed to their heavy predations. For them, Administration is a joy - practically an unlimited amount of cash to draw on - unlike most other businesses which when they fold hardly have the price of a decent meal still on the books.
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rogerthat
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Post by rogerthat on Oct 31, 2019 22:58:56 GMT
Ho hum .... the 'All active and past loans' page has now been disabled (just displays 'Page down for maintenance')
If any more updates are forthcoming, only visibility will be via the 'My Investments' page, unless the loan id is known.
As FS (before administration) used The FundingSecure Update thread..cant that be used by the Administrators or are you suggesting that there may well be no further updates ?
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