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Post by tdeinvest on Jan 27, 2020 20:14:44 GMT
Has there been any clarification that I may have missed on potential payouts of recovered loans that have been credited to our accounts. I have what are termed as "Available funds" reflected on my dashboard, but am also told that "Deposits and Withdrawals are unavailable at this time" if I try to access them.
Has anybody contacted the Administrators in this regard?
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Post by mrclondon on Jan 27, 2020 20:42:09 GMT
The administrators will be unable to provide any specific answer to this question as it depends in part on when they will receive legal opinion on the trust issues (i.e. who is entitled to what based on the records that exist) and more importantly on the clarity of that opinion. It may needed to be tested in court (timescale many months to years) if there is any doubt. Also in the background there seems to be a workflow currently in progress of checking everyone's AML status, and requesting updated docs where there are question marks. They won't be able to restart withdrawals (as against FCA rules) until they are satisified the AML checks are valid (although once the majority are confirmed thay may do as the Lendy administrators have done and enable withdrawals for those that are confirmed and block the rest).
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bugs4me
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Post by bugs4me on Jan 28, 2020 10:20:21 GMT
'....timescale many months to years....' This timescale is of course not just limited to FS but also Col, LY, etc - in fact, in just about any instance where Administrators/Liquidators become involved. You could be forgiven that when a loan repays then the original participants would be settled financially - be it on a positive or negative basis - that is the simplest and easiest course of action. But in my (limited) experience in dealing with Administrators, whatever ‘spin’ they may put on their responsibilities towards lenders/investors/creditors, their prime obligation is towards their own financial well-being. Whilst there exists potential funds still available which they can legally make a claim on via costs/expenses, then there is no urgency on their part to close the case. Of course in the meantime, arguments will (conveniently) be allowed to continue as to the virtues of a waterfall arrangement or what have you. It’s in the Administrators interest’s for these discussions to continue. Remember, every query, from whoever, is chargeable with the lenders/investors/creditors picking up the tab. Also worth bearing in mind is that with these Vultures Administrators picking over a dead carcass, they are top of the food chain. It’s a sad state of affairs especially those that invested beyond their means and it will have a serious impact on many folk’s financial futures. Nonetheless I believe the above to be the facts.
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taffy
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Post by taffy on Jan 28, 2020 10:26:28 GMT
Has there been any clarification that I may have missed on potential payouts of recovered loans that have been credited to our accounts. I have what are termed as "Available funds" reflected on my dashboard, but am also told that "Deposits and Withdrawals are unavailable at this time" if I try to access them. Has anybody contacted the Administrators in this regard? I`m sure you have nothing to be concerned about as the whole process is "Approved and Regulated" by the Financial Conduct Authority. No doubt your frozen capital will be earning market rates of interest as well. I really should take those tablets the doctor gave me!!
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bugs4me
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Post by bugs4me on Jan 28, 2020 10:41:14 GMT
Has there been any clarification that I may have missed on potential payouts of recovered loans that have been credited to our accounts. I have what are termed as "Available funds" reflected on my dashboard, but am also told that "Deposits and Withdrawals are unavailable at this time" if I try to access them. Has anybody contacted the Administrators in this regard? I`m sure you have nothing to be concerned about as the whole process is "Approved and Regulated" by the Financial Conduct Authority. No doubt your frozen capital will be earning market rates of interest as well. I really should take those tablets the doctor gave me!! About the only thing that's approved and regulated by the incompetent FCA is their own fee structure which is designed to ensure they can live a comfortable existence in their shiny offices. Once you've paid your fee to them then any con-man, chancer, charlatan, etc can then use the 'Authorised and Regulated' by the FCA banner with minimal background checks - if any. It's basically a self certification process in my experience.
The best thing that could happen is simply close the existing FCA down.
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taffy
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Post by taffy on Jan 28, 2020 11:30:22 GMT
While I do agree with what you say, the irony here is that "Authorised and Regulated by the FCA" was used to promote these investments. I for one, and I suspect many others, would not have invested if this "guarantee" was not in place.
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pip
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Post by pip on Jan 28, 2020 11:37:15 GMT
I personally wouldn't spend any of the money in your 'available funds'. After lenders agreed to be treated as creditors all I suspect this means is that you are a creditor of FundingSecure to the amount in your account. As with any administration the amount you actually receive from the administration process may be a fraction of the amount you are owed. As per previous posters I suspect once people realise the reality of the situation the whole mess may well be subject to legal challenge and a lot of pressure will be put on the FCA to explain why supposedly ring-fenced customer deposits are subject to haircuts due to administrator fees. This is a good question but suspect there will be no easy answers. From some of the posts on this forum I still feel there are many posters who are still living with false hope and who have not grasped how bad the situation is. For clarity I can assure everybody that no legal challenge will be coming from me as don't need that sort of stress and expense in my life and due to me only have a few thousand invested in the site.
All I would say is that if people think 'available funds' means that the total amount of this will be 'released when the green light is given', then I fear many may be in for an unpleasant surprise. As I have warned people many times, I have dealt with administrators many times and always the outcome has been worse than I feared and left me with a bitter sense of injustice with nobody wanting to hear my pain. Clearly this is a bit different as never dealt with an administration of a p2p company before, and at least there is the useless FCA who can be subject to a lot of political pressure on this, but suspect the outcome will be similar, bitterly disappointing.
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criston
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Post by criston on Jan 28, 2020 12:03:38 GMT
From FSAG on Facebook as follows.
'FSAG's position was only ever to be accepted as creditors for POTENTIAL LOSSES, in ADDITION to our rights as beneficiary of the trust assets. This was done to facilitate our mission of gaining control of the CC and was made perfectly clear, several times, in earlier threads on the subject. It was also made perfectly clear that, only the courts could ultimately decide whether or not the lenders are beneficiaries or the loan trusts. Most people seemed to understand this and supported FSAG's position, which ultimately led to a CC with 4 lender/investor seats vs 1 creditor.'
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pip
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Post by pip on Jan 28, 2020 12:17:56 GMT
From FSAG on Facebook as follows. 'FSAG's position was only ever to be accepted as creditors for POTENTIAL LOSSES, in ADDITION to our rights as beneficiary of the trust assets. This was done to facilitate our mission of gaining control of the CC and was made perfectly clear, several times, in earlier threads on the subject. It was also made perfectly clear that, only the courts could ultimately decide whether or not the lenders are beneficiaries or the loan trusts. Most people seemed to understand this and supported FSAG's position, which ultimately led to a CC with 4 lender/investor seats vs 1 creditor.'Criston, I understand from the documents from the administrators that legally lenders are not the beneficiaries of the trusts or loans (apart from last 4 issued by FS) so can't really see that lenders will get any 'rights' as beneficiaries of trust assets. I also understood that the vote by the administrators to treat lenders as creditors allowed administrators access to pay their fees (and other costs) from the proceeds of assets held in trust. I am not saying that FSAG was wrong to do this, personally I would have liked to refuse and put the pressure on the FCA by saying that lenders have no access to their loans at all as held in a ring-fence that you insisted with no exit mechanism....what are you going to do. Lenders chose against this as ceded to the Administrators request for a mechanism to allow their fees to be paid. I opposed this at the time, I lost, and accept we are where we are. In any case whatever lenders decided to do the situation was dire. The situation is still dire. And...to answer the above quotation, I don't think lenders have any rights relating to the trust assets, yes I think a legal challenge is very possible if somebody has the legal desire to do so but still I hold that at present 'available funds' are really just creditor balances of FS. As FS is in administration then the likely returns are uncertain at best. I actually see one of the potential legal challenges coming from preferential creditors (who may well be ex-directors) who under the administration laws are likely to have a claim to be repaid in full from assets held in trust before other lenders receive a penny. Remember Administration is not about what is fair it is about applying legislation correctly, which I am sure the administrators will do even if it leaves lenders with a bitter taste. Please don't take this as a criticism of anybody in FSAG or any of the great work being done. Yes, I disagree with some decisions but I accept them and realise that whatever way was turned the outcome was always going to be dire.
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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 Jan 28, 2020 15:55:53 GMT
From FSAG on Facebook as follows. 'FSAG's position was only ever to be accepted as creditors for POTENTIAL LOSSES, in ADDITION to our rights as beneficiary of the trust assets. This was done to facilitate our mission of gaining control of the CC and was made perfectly clear, several times, in earlier threads on the subject. It was also made perfectly clear that, only the courts could ultimately decide whether or not the lenders are beneficiaries or the loan trusts. Most people seemed to understand this and supported FSAG's position, which ultimately led to a CC with 4 lender/investor seats vs 1 creditor.'Criston, I understand from the documents from the administrators that legally lenders are not the beneficiaries of the trusts or loans (apart from last 4 issued by FS) so can't really see that lenders will get any 'rights' as beneficiaries of trust assets. I also understood that the vote by the administrators to treat lenders as creditors allowed administrators access to pay their fees (and other costs) from the proceeds of assets held in trust. I am not saying that FSAG was wrong to do this, personally I would have liked to refuse and put the pressure on the FCA by saying that lenders have no access to their loans at all as held in a ring-fence that you insisted with no exit mechanism....what are you going to do. Lenders chose against this as ceded to the Administrators request for a mechanism to allow their fees to be paid. I opposed this at the time, I lost, and accept we are where we are. In any case whatever lenders decided to do the situation was dire. The situation is still dire. And...to answer the above quotation, I don't think lenders have any rights relating to the trust assets, yes I think a legal challenge is very possible if somebody has the legal desire to do so but still I hold that at present 'available funds' are really just creditor balances of FS. As FS is in administration then the likely returns are uncertain at best. I actually see one of the potential legal challenges coming from preferential creditors (who may well be ex-directors) who under the administration laws are likely to have a claim to be repaid in full from assets held in trust before other lenders receive a penny. Remember Administration is not about what is fair it is about applying legislation correctly, which I am sure the administrators will do even if it leaves lenders with a bitter taste. Please don't take this as a criticism of anybody in FSAG or any of the great work being done. Yes, I disagree with some decisions but I accept them and realise that whatever way was turned the outcome was always going to be dire. Sorry where was there a vote by the administrators to treat lenders as creditors? Administrators dont vote to treat lenders as creditors, lenders claim to be creditors and the administrators accept that, based on proof, or it goes to court for the claim to be proved (eg loss from negliegence). Lenders have not been accepted as creditors, except for the specific purpose of voting on the proposals at the creditors meeting, they have not been accepted as creditors for the purpose of receiving distributions from FS assets.
Entitlement to trust assets is still to be determined, the administrators havent said who is legally entitled to what or not.
Prefential creditors have no entitlement to trust assets (thats the point of a trust it is protected from creditors), only from the assets of FS and rank behind secured creditors. SOA indicated £22k owed.
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pip
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Post by pip on Jan 28, 2020 17:25:31 GMT
Criston, I understand from the documents from the administrators that legally lenders are not the beneficiaries of the trusts or loans (apart from last 4 issued by FS) so can't really see that lenders will get any 'rights' as beneficiaries of trust assets. I also understood that the vote by the administrators to treat lenders as creditors allowed administrators access to pay their fees (and other costs) from the proceeds of assets held in trust. I am not saying that FSAG was wrong to do this, personally I would have liked to refuse and put the pressure on the FCA by saying that lenders have no access to their loans at all as held in a ring-fence that you insisted with no exit mechanism....what are you going to do. Lenders chose against this as ceded to the Administrators request for a mechanism to allow their fees to be paid. I opposed this at the time, I lost, and accept we are where we are. In any case whatever lenders decided to do the situation was dire. The situation is still dire. And...to answer the above quotation, I don't think lenders have any rights relating to the trust assets, yes I think a legal challenge is very possible if somebody has the legal desire to do so but still I hold that at present 'available funds' are really just creditor balances of FS. As FS is in administration then the likely returns are uncertain at best. I actually see one of the potential legal challenges coming from preferential creditors (who may well be ex-directors) who under the administration laws are likely to have a claim to be repaid in full from assets held in trust before other lenders receive a penny. Remember Administration is not about what is fair it is about applying legislation correctly, which I am sure the administrators will do even if it leaves lenders with a bitter taste. Please don't take this as a criticism of anybody in FSAG or any of the great work being done. Yes, I disagree with some decisions but I accept them and realise that whatever way was turned the outcome was always going to be dire. Sorry where was there a vote by the administrators to treat lenders as creditors? Administrators dont vote to treat lenders as creditors, lenders claim to be creditors and the administrators accept that, based on proof, or it goes to court for the claim to be proved (eg loss from negliegence). Lenders have not been accepted as creditors, except for the specific purpose of voting on the proposals at the creditors meeting, they have not been accepted as creditors for the purpose of receiving distributions from FS assets.
Entitlement to trust assets is still to be determined, the administrators havent said who is legally entitled to what or not.
Prefential creditors have no entitlement to trust assets (thats the point of a trust it is protected from creditors), only from the assets of FS and rank behind secured creditors. SOA indicated £22k owed.
I think we are talking about two different things here: - Lenders agreed that in their status as lenders they agreed that recoveries from loans they are to be treated as creditors for the purpose of selecting the creditors committee. As part of this lenders also agreed that the administrators could take their fees from the proceeds of loans. As lenders are not the beneficiaries of any loans or trusts (potentially apart from last four loans in 2019) then I am not sure what other status lenders would have rather than unsecured creditors? Administration law does not have any special category for P2P lender. - Some lenders claimed that they were entitled to compensation from FS due to negligence, or had outstanding FOS complaints. The law in this area is clear, a firm is free from legal action and FOS rulings in administration. You may be an unsecured creditor if you have a unsettled court judgement or FOS ruling, but if you case is ongoing then one of the annoying things about administration is that nice little watertight legal action is now not worth the paper it is written on. Are you 100% sure that preferential creditors have no entitlement to trust assets, you may be right but the administration report indicated that the beneficiaries of loans are not lenders....so who are they? Agree that entitlement to trust assets is still to be determined, but I can't really see how poor lenders will be anything but unsecured creditors of FS and that any preferential creditors and other unsecured creditors will have first or equal entitlement.
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ilmoro
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'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 Jan 28, 2020 19:14:08 GMT
Sorry where was there a vote by the administrators to treat lenders as creditors? Administrators dont vote to treat lenders as creditors, lenders claim to be creditors and the administrators accept that, based on proof, or it goes to court for the claim to be proved (eg loss from negliegence). Lenders have not been accepted as creditors, except for the specific purpose of voting on the proposals at the creditors meeting, they have not been accepted as creditors for the purpose of receiving distributions from FS assets.
Entitlement to trust assets is still to be determined, the administrators havent said who is legally entitled to what or not.
Prefential creditors have no entitlement to trust assets (thats the point of a trust it is protected from creditors), only from the assets of FS and rank behind secured creditors. SOA indicated £22k owed.
I think we are talking about two different things here: - Lenders agreed that in their status as lenders they agreed that recoveries from loans they are to be treated as creditors for the purpose of selecting the creditors committee. As part of this lenders also agreed that the administrators could take their fees from the proceeds of loans. As lenders are not the beneficiaries of any loans or trusts (potentially apart from last four loans in 2019) then I am not sure what other status lenders would have rather than unsecured creditors? Administration law does not have any special category for P2P lender. - Some lenders claimed that they were entitled to compensation from FS due to negligence, or had outstanding FOS complaints. The law in this area is clear, a firm is free from legal action and FOS rulings in administration. You may be an unsecured creditor if you have a unsettled court judgement or FOS ruling, but if you case is ongoing then one of the annoying things about administration is that nice little watertight legal action is now not worth the paper it is written on. Are you 100% sure that preferential creditors have no entitlement to trust assets, you may be right but the administration report indicated that the beneficiaries of loans are not lenders....so who are they? Agree that entitlement to trust assets is still to be determined, but I can't really see how poor lenders will be anything but unsecured creditors of FS and that any preferential creditors and other unsecured creditors will have first or equal entitlement. I think we are talking about the same thing but you seem to be putting a certain spin on it that IMO isnt there. Investors didnt agree to be treated as creditors for the purpose of the vote on a CC & proposals, the administrations allowed them to be treated as such if they filed a POD ie the decision was the administrators (14i they would treat investors like creditors not as creditors) though investors could elect to participate or not.
Nowhere does the report say that investors are not the beneficiaries of the trusts, they have merely stated the position is unclear as they were clearly supposed to be under the t&cs but this may not have been the case in practice. It is quite possible that Counsel/courts would look at the unperfected intent rather than reality when reaching their conclusions.
It is not competely true that companies in administration cant be subject to legal action, you would need permisison of the administrators (unlikely) or the court. There are no restrictions on claims against companies under a CVL which is the proposed exit route
AIUI the only way trust assets can be utitilised for purposes other than to the benefit of the trust beneficiaries is payment of admin fees under a Berkeley Applegate order. Again the assumption is that investors are not beneficiaries but the report doesnt make that assumption. Obviously, if the trust protection is removed via court direction then the assets are avaliable to pay all creditors
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