sl75
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Post by sl75 on Nov 11, 2019 13:53:33 GMT
Edit2: At the time of writing this post, I'd not fully taken on board that the CLB is specifically related to "Saving Stream Security Holding Limited", a rather more narrow focus. As such, and as highlighted by later posts, the particular "conflict of interest" I'd focussed on in this post may be entirely irrelevant to THIS discussion [I've not really had a further opportunity to reconsider in detail]If we accept the premise that the CLB's interests may diverge from the CC's interests [hence barring people from being members of both groups], which side of that divide will the LAG be on (presumably the CC side, given that the CC consists mostly of members of the LAG), and what equivalent group might need to exist for the other side? Is this even a real question? Trolling surely....  We welcome the creation of the CLB and look forward to working with its members to achieve the best result for investors. Admittedly an intentionally provocative question, but the comms about this new body clearly indicates that it's to allow divergent interests of "model 2" investors and "creditors" to be properly represented when they are in conflict. Given this acknowledgement that there is the potential for conflict and the existence of investors who hold exclusively "model 1" or "model 2" loans, but not both (and of those who hold various ratios of each being partly conflicted with themselves), their interests can never be fully aligned. In cases of potential conflict between the interests of "model 1" and "model 2" investors, the "CC" presumably needs to represent "model 1" investors (whose interests would also be mostly aligned with "normal" creditors), whilst the "CLB" is explicitly there to represent "model 2" investors. One specific point that the CC and the CLB would presumably differ on would be the deductions being made from recovered loans. CLB would presumably argue that Lendy's latest T&Cs allowing them to deduct very large amounts of fees before those who invested in that loan get any of the recovery were imposed in bad faith and should be struck out, replacing them instead with deductions only to cover the actual costs of recovery with no profit for Lendy. CC, however, would presumably rationally be in favour of anything that adds to Lendy's balance sheet making more available for distribution to creditors, including the large deductions authorised by the latest T&Cs which the "model 2" investors agreed to. This would also be the rational position of anyone who invested solely in "model 1" loans. Does LAG have a single consistent position on this, or would individual members be advised as to how to best take action to push for the outcome that favours them over other investors? Edit: My own portfolio has a mix of both types; I have not, and don't really intend to, calculate exactly which side I "should" rationally come on. I'd see the "best" solution as whatever minimises the additional administrative expenses so that more can be distributed to investors. It remains unclear to me how setting up yet another administrative body (which will undoubtedly have its own expenses that need paying) aids in this. However, if it helps to increase the proportion returned to "investors" at the expense of "general creditors of Lendy" I'd naturally be for it.
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garfield
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Post by garfield on Nov 11, 2019 15:03:29 GMT
The purpose of the additional committee is to oversee the assets held in SSSH which are all associated with model 2 loans. End of! It's Remembrance Day. No-one wants to start another war. We're all allies!!
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wuzimu
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Post by wuzimu on Nov 11, 2019 15:15:36 GMT
The reason for the CLB is nothing to do with diverging of interests of Lendy Creditors Committee from Model 2 investors. I believe the CC are all substantial M2 lenders. The issue revolves around the conflict issues RSM face which can be read about in the briefing docs RSM have posted on the Lendy website. In practise where there was 5 of us, there will soon be 10! More the merrier.
Having read the points SL75 has raised in a post above, they are entirely spurious and I'm only bothering to respond in case any Lendy lenders read that post and are concerned. Yes, there are issues in play. But they are not the issues SL75 has purported
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Greenwood2
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Post by Greenwood2 on Nov 11, 2019 15:27:03 GMT
I would imagine there are very few lenders only in model 1 loans, as there seem to be very few left. I believe LAG is trying to get all lenders to be acknowledged as creditors to allow claims against Lendy and others for mis-selling etc. But an extra layer of bureaucracy always adds to the fun, more meetings, more discussion, more delays, less money left.  |
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sl75
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Post by sl75 on Nov 11, 2019 15:47:26 GMT
The purpose of the additional committee is to oversee the assets held in SSSH which are all associated with model 2 loans. End of! I think the specific reference to SSSH was what I'd missed. [Edit: I'd also perhaps given too much weight to the requirement that members of this new body could not be members of the CC - which I took to imply the two groups would be potentially in conflict and thus sought a logical explanation] The issue revolves around the conflict issues RSM face which can be read about in the briefing docs RSM have posted on the Lendy website. [...]
Besides the most recent update, the only mention of "conflict" I found was in the main FAQs link doc "We have taken legal advice on the existing relationship and are comfortable that adequate safeguards have been put in place to manage any potential conflict issues."
Searching for "briefing" brought up a complete blank.
Can you provide a more specific pointer to the "briefing docs" you're referring to? So far I can't see any specific conflict issue other than the one I'd (presumably erroneously) highlighted in my earlier posts...
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Monetus
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Post by Monetus on Nov 11, 2019 16:27:49 GMT
The conflict arises as RSM are administrators of both companies and the interests of both platform and investors were fundamentally conflicted when the platform was up and running (so it’s not any different in administration)
RSM as administrators have a statutory obligation to maximise returns for creditors of Lendy Ltd (including Lendy Group Ltd and Liam Brooke for example) under the insolvency act. i.e charging all contractually-owed fees etc.
However RSM are also administrators of SSSH which holds all of the Model 2 security on trust for the benefit of both investors and Lendy Ltd. Clearly investors want as much of their money back as possible which means the lowest possible fees charged by Lendy Ltd (their agent).
Hence Grant Thornton are acting as “conflicts administrator” for SSSH to review the business relationship and fee structure between the two entities and in carrying out their work have suggested the creation of the CLB to assist them with this role.
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wuzimu
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Post by wuzimu on Nov 14, 2019 13:07:07 GMT
If you are a Lendy lender in M2 loans (most will be....) you are aware of the creation on the CLB, a 5 person board to help the Conflicts administrator..
LAG asks that all LAG members vote for one of the nominated people on the list on the LAG website / FB group.
So please beetle over there to see the template vote form and how to spread the votes around to get those 5 great lenders on the CLB!
Thanks
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Post by mrclondon on Nov 14, 2019 14:08:35 GMT
If you are a Lendy lender in M2 loans (most will be....) you are aware of the creation on the CLB, a 5 person board to help the Conflicts administrator..
LAG asks that all LAG members vote for one of the nominated people on the list on the LAG website / FB group.
So please beetle over there to see the template vote form and how to spread the votes around to get those 5 great lenders on the CLB!
Thanks
I thought it was going to be the five largest lenders who are nominated, and has nothing to with LAG.
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sl75
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Post by sl75 on Nov 14, 2019 14:36:18 GMT
I thought it was going to be the five largest lenders who are nominated, and has nothing to with LAG. Indeed: "If more than five nominations are received, the five investors with the largest investment will be invited to form the CLB."
The wording seemed to suggest that members were invited to nominate themselves to stand on the CLB rather than initiating any kind of vote that LAG would undoubtedly try to fix!
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ianj
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Post by ianj on Nov 14, 2019 16:45:06 GMT
I thought it was going to be the five largest lenders who are nominated, and has nothing to with LAG. The wording seemed to suggest that members were invited to nominate themselves to stand on the CLB rather than initiating any kind of vote that LAG would undoubtedly try to fix!
The email wording is apparently open to interpretation.
My initial reading of was that the nominees with the five highest aggregates of (Model 2) nominators funds would be invited to form the CLB, but perhaps that view was induced by the Collateral CC formation requirements.
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sl75
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Post by sl75 on Nov 14, 2019 16:50:13 GMT
The email wording is apparently open to interpretation.
My initial reading of was that the nominees with the five highest aggregates of (Model 2) nominators funds would be invited to form the CLB, but perhaps that view was induced by the Collateral CC formation requirements.
I don't see how "five investors with the largest investment" leaves itself open to that interpretation at all.
However, all that LAG's proposed actions of getting large numbers of investors to send in "nomination forms" naming LAG's "chosen 5" seems to acheive is to use up more of RSM's valuable time in processing those nominations...
Based on the selection criteria, an investor who has (say) £1M in model 2 loans, and no affiliation to this board or to LAG would beat almost anyone that we or they chose in the event of more than 5 nominations being received.
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ianj
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Post by ianj on Nov 14, 2019 17:11:54 GMT
The email wording is apparently open to interpretation.
My initial reading of was that the nominees with the five highest aggregates of (Model 2) nominators funds would be invited to form the CLB, but perhaps that view was induced by the Collateral CC formation requirements.
I don't see how "five investors with the largest investment" leaves itself open to that interpretation at all. That's why I qualified my thoughts with an appropriate adjective, and offered some reasoning. However, given the lax standard of written English we receive from those whose watchword we should reasonably expect to be 'precision', that original interpretraion could still be valid.
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Post by mrclondon on Nov 14, 2019 17:54:51 GMT
Only if there are more than five people putting themselves forward will holdings, and holdings of people who vote for them, be taken into account, at which point the people with the least accumulated holding value will be eliminated until there are just five remaining. At least this time, LB won’t be able to stick his oar in. It’s in LAG’s interest that those successful five be taken from those who share LAG aims. Where are you getting this info from ? Is this LAG (wishful) thinking, or has RSM done a U turn on the info sent out to lenders but not bothered telling us ?
As per my earlier post, my understanding is it will the five lenders who themselves have the largest investment in model 2 loans. No voting, just the 5 largest investors.
The cynic might wonder whether this concept of voting is being raised simply to put other HNW lenders off from nominating themselves , as is their right, totally independent of LAG.
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Post by Admin on Nov 14, 2019 18:14:38 GMT
{Post intentionally blank to force page break}
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Post by Admin on Nov 14, 2019 18:49:20 GMT
Its perhaps worth posting (on the final page of this thread) a reminder that nominations have to be received by 5pm TOMORROW (Friday 15th Nov).
Something that all HNW lenders should consider doing ....
from the email sent on the 8th:
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If we accept the premise that the CLB's interests may diverge from the CC's interests [hence barring people from being members of both groups], which side of that divide will the LAG be on (presumably the CC side, given that the CC consists mostly of members of the LAG), and what equivalent group might need to exist for the other side?
