Proposals from administrators

Thank you for your reply.

I guess you meant you will vote yes for all three sections (accepting proposals,  expenses, formation of CC) during the meeting. If you become a member of CC, would you accept the Advice to treat investors as creditors?

I am personally against accepting the Administrators proposals and expenses.

The proposal opens a route for us investors to be treated as creditors. Nothing good for us can come out from accepting it.

The expenses decision is too vague and as far as I understand it, it allows Administrators to unlawfully charge investors as creditors. The administrators should propose exactly how they want to charge investors for their services without double charging ( FS now takes their fees from recovery, which the Administrators use to pay their fees). Any changes to fee structures should be reflected in our T&Cs and agreed by all investors.

As for FSAG I think it needs to be more transparent. Their decisions should be made by voting of all FSAG members, with votes weighted by a member contribution to the war chest. Any CC member voted in with help of FSAG should be bound by FSAG decisions and share information obtained in his role as a CC member with the FSAG members.        

sb.

You raise some excellent points and I feel very constrained by lack of diary hours available and by being overseas for the winter on 7 hour time shift. The question appears to be, do your proposals, which theoretically sound interesting, hold any water legally and practicably?

The FSAG group have already laid claim to the ground and it seems to me if you want to gain traction you need to get some relevant top lawyer input as to the chances of the success of your proposals v FSAGs current ones.

I would happily chip in another 0.1% to test this, but with a proposed CC meeting on 28th and a lot of votes having already gone in, including mine, it doesn't feel to me that FSAG are very likely to change course given their past experience of handling P2P administration, without sight of very strong lawyer backed reasoning as to how this can be done.

Also in terms of decision making, voting according to percent funding sounds democratic but may not always be appropriate for the necessary decision making on grounds of being too slow/cumbersome.

adrian77. There are also loans such as Ash**** Avenue which are not yet defaulted and which may come good without receiver appointment.

If we want to best control legal cost it seems we need to somehow get control of receiver (or equivalent) appointment and try to inject some competition into the process. I suspect the professional bodies have this well thought through so it sounds as if we might be pioneering.

Income Categories Include

Loans repaid fully on time with interest.
Loans repaid late without receiver appointment.
Loans repaid after receiver appointment.


"does this money recovered go to the FS lenders or into a pot"

I suggest the First Priority is to maintain the Trust structure so that individual loan recoveries go to individual investors, net of costs related to that loan.  Then there is no pot. 
I gather our intended FSAG CC rep. has assured us that this is the main objective once appointed.

Very much the Second Priority is to limit professional costs which is beyond my knowledge and I've voted for our FASG rep to handle that given his experience at the coal face.
My view as above is to err on the side of over using lawyer advice at least until a pattern is established.

That is my opinion. I thought the legal advise FSAG is seeking would help us understand how to vote during a Creditor Meeting but it seems FSAG founders made their mind how they are going to vote before they asked lawyers. 

The voting hasn't happened yet. I don't think there should be a problem to send a new amended proxy form if you change your mind.

We don't we need to make an instant decision as FSAG. A day would be enough to use a forum poll and post-process results manually (or with a script) to take into account contributions to the war chest.   

 

Sorry about the formatting I can't handle the forum well from my phone.

SB said "As it stands now the money should get to the FS lenders and then FS should take its cut, from which the Administrators can deduct their fees."

This is fundamental, yes the first priority is to maintain the trust structures. BUT this is not a slam dunk.

There is the possibility that investors with a lot of bad loans would do better being treated as creditors. In that situation where all creditors may be pooled in a pot, recoveries may be shared pro rata so investors who had selected good loans may lose out relative to investors who selected loans that are bad.

I gather our intended CC rep is fully on board to maintaining the trust structures.

 The FSAG team have experience in the game, so they did know how they were going to vote before the lawyer was instructed, but the lawyer has since confirmed that they were on the right track.

With regard to voting on the decisions that FSAG take, I think you are over thinking what control the CC will actually get and how difficult those decisions will be to make.  First question that seems like it might come up is "Leading Counsel has advised that the loan trusts are written in favour of FS, do you vote in favour of accepting that advice or against?",  next thing to come up may be that the CC (hopefully controlled by investor biased seats) will suggest that  the administrator's 2.5% cut is first taken from FS's share of any recovered funds (if there is any), before it is taken from investor's recoveries, do you really think that FSAG need to refer those questions back to the membership?

Secondly, you are underestimating the amount of work that the FSAG team are having to put in to all this; on top of their day jobs!

Thirdly if, as we hope, the FSAG gets 3 seats on the CC, only 1 of those 3 will have been voted in by members from Facebook & the FSAG forum, so even if a vote was held via those forums any influence would be minimal.  The other 2 seats BTW would, all being well, be held by one investor voted in by the size of his own investment, the other with the support of a small number of HNW investors.

I'm not suggesting that a decision would never be put back to the membership for a vote if the best course of direction were every uncertain, but the basic decision you have to make at this point in time is do you want a CC controlled by Creditors or one controlled by the FSAG?

As for transparency, if you want more information, I suggest you come join us on either the FSAG Facebook page or the FSAG forum, where discussions are not as public.

It is meant as in your first case, the way other fees & expenses are are to be paid is detailed in the APs; decision 1 deals with accepting or rejecting those.