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Post by et on Oct 6, 2020 17:52:23 GMT
the only 'constructive' thing about the CVA is that included in the CVA documentation, they have had to disclose all of the shady and underhand things they have got up to, including the sale of the Loan Book at a knock down price to 'one of their own' and allowing Directors to write off their Loans from the company which were used to enable them to buy shares. When the CVA is 'defeated' and then an Administrator is appointed, he/she will then have all the ammunition they will need to challenge the Directors to 'correct' these malfeasances,,,yeh I hope you are right. I do fear that many small investors might not read the CVA in any detail and just vote on the claim that CVA is better than administration. I noted today that the CVA doesn't even allow for a creditors committee to be setup so we would be completely cut out if the CVA passes! anyone voting in favour is essentially saying they are okay with these "shady" goings on
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np
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Post by np on Oct 7, 2020 8:44:22 GMT
Seems to me that if the CVA is passed we have no further re-course? If the CVA is rejected then we face the risk of Administration; but I am not entirely convinced Wellesley would want to go down this road for the reasons 'et' has stated as in effect it would be a contrived Administration as they have not worked with their clients to overcome the transient liquidity issues and the whole matter would be thoroughly scrutinised?. I am still unclear in the event of Administration whether Cloverleaf gets to keep the loan book it bought for a massive discount or whether this would then be invalid and/or pursued by any 'independent' Administrator?
'Et' we need guidance from your insolvency expert as to the best course of action for the vote and then any advised subsequent actions. Ideally it would be best to get the vote suspended, but it is clear that Wellesley has purposefully orchestrated to allow as little time as possible for evaluation, particularly in light of the 220 page CVA document. I think improving the terms of this wretched CVA are impossible between now and the vote deadline; but it might be possible if the vote was suspended.
Wellesley is banking on fragmentation to get the CVA through but 75% is still a big hurdle for them to achieve to get it passed?
So many moving parts and unknowns in this whole stinking corrupt affair.
I am expecting to have call with legal advisor this afternoon so hopefully will have a concrete way forward soon. in respect of the loan book transfer to Cloverleaf, if this or any transaction is proven to be antecedent (dodgy) then the administrator has the power to reverse them. Did the Legal Advisor give any useful advice?
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Mucho P2P
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Post by Mucho P2P on Oct 7, 2020 10:30:06 GMT
the only 'constructive' thing about the CVA is that included in the CVA documentation, they have had to disclose all of the shady and underhand things they have got up to, including the sale of the Loan Book at a knock down price to 'one of their own' and allowing Directors to write off their Loans from the company which were used to enable them to buy shares. When the CVA is 'defeated' and then an Administrator is appointed, he/she will then have all the ammunition they will need to challenge the Directors to 'correct' these malfeasances,,,yeh Agree with you, just remember that GW appointed D&P, and from experience the administrators always tend to favour, or at least give the benefit of doubt to who appointed them unless there is gross malfeasance that cannot be reasonably covered up explained.
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mah
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Post by mah on Oct 7, 2020 10:48:28 GMT
Repeating my post from the Facebook Forum, for those who aren't yet members of that :
TBH, I don't trust D&P (Duff & Phelps) the slightest.
From D&P's response to Mr Fennel’s query "reviewed the CVA Proposal put forward by Wellesley and found it fit to be considered by creditors", I would expect D&P to know the basic classification of Investors.
But when I asked which class do I belong to, they redirected me to their bosses, Wellesley.
So, without knowing this basic classification, how would they oversee the Voting and Allocate Debts to the Creditors and Count the Votes ?
Looks to me that Wellesley will make all these decisions for them and they would merely rubber stamp them for Fees of £200K + £150K.
And anyone who read the CVA would have discovered that it repeatedly stresses the point that by voting for the CVA, Creditors/Investors would Waive Off / Compromise any Claims whatsoever against anyone including WFC, WACL, CloverLeaf, etc.
So, if the CVA gets passed, there will be no Legal Recourse at all.
Moreover, there will be No Creditors Committee (Clause 24, Page 80). Also, there are No Warranties (Clause 25, Page 80).
That’s the reason I am totally against it – think carefully and Vote wisely. Also, Not participating in the Vote indirectly means Voting in Favour of the CVA.
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Post by et on Oct 7, 2020 11:27:18 GMT
I am expecting to have call with legal advisor this afternoon so hopefully will have a concrete way forward soon. in respect of the loan book transfer to Cloverleaf, if this or any transaction is proven to be antecedent (dodgy) then the administrator has the power to reverse them. Did the Legal Advisor give any useful advice? I have spoken to legal advisor and it’s not good news I am afraid. Despite agreeing that some of the transactions mentioned in the proposal look questionable (meaning its unlikely Wellesley would want to go down administration route), the mere fact that they list the questionable transaction means they are legally covered i.e. it is up to the creditors to decide if they want to do anything about it. essentially, voting in favour of the CVA as proposed is tantamount so saying you are okay with what they have done to extract cash out of the company. As a reminder: 1. Movement of cash to SMB accounts (can’t say I fully understand this one but shortfall doesn’t sound good) 2. Making investments of ~£20m during Q4 2019 and throughout 2020 when clearly in insolvent 3. Intercompany sale of loan book at a significant discount– Wellesley retains all upside of any loan repayments post CVA 4. Change of terms in directors loan to reduce amounts owed 5. Pre funding expenses of other group companies If the CVA is voted for our only legal challenge would be to identify something omitted from the proposal that would have impacted the vote e.g. other dodgy transactions not disclosed or people voting that shouldn’t have. This seems remote to me. Therefore, our only real options to unite with as many creditors as possible and reject the CVA as written and enter into negotiations with Wellesley as one strong unit. I have found a company that would represent us if we got sufficient numbers. This is a Herculean ask given how many creditors there are and how little time we have to reach them so everyone needs to do their bit to try and find and unite creditors. A few of us have setup a Facebook page (https://www.facebook.com/groups/wellesleyp2pcreditorsactiongroup) so please sign up if you haven’t already. Other ideas I have had: · If you have spoken to the press ask them to mention the group in any follow up articles. · If you have a blog, twitter account, podcasts or webinars, make sure you promote the group. · If you speak to Wellesley inform the helpdesk that there is an action group on Facebook and ask them to notify other callers (long shot but worth a try)
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wh
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Post by wh on Oct 7, 2020 12:12:37 GMT
Thank you for your effort ET. I believe that if we want to make any modifications to the cva we would need 25% support. I don’t know whether we are able to just put forward modifications and then these are put to the vote, I assume this prob isn’t the case, or whether we need to harness and go forward with any proposed modifications with the 25% already identified? Does your advisor know what the steps are? There could be heavy legal costs which might negate the value of the effort for smaller investors. I don’t know whether we can publicise and call a creditors meeting ourselves, might be worth thinking about? The key thing we need is a creditors listing and I don’t think we have that. Are we allowed to instruct the company to circulate a modification proposal to all creditors?
We we would need to identify and agree any proposed modifications. i think most would want to ensure there was a possibility to participate in any loan book sale upside (this may be wildly optimistic). Does taking the preferred equity option not offer that or is it capped? I am also a bit concerned that the proposed business plan does not have any oversight or representation to protect creditors interests in terms of strategic decision making, in particular the business plan as proposed allows the directors to go to the market and borrow etc...
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mah
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Post by mah on Oct 7, 2020 14:34:30 GMT
Although I haven’t read the whole document thoroughly and DO NOT claim to have understood it all, here are few notable points that I feel need highlighting :
1) There is NO mention of the % Recovery / Payments for the P2P Investors in the entire CVA (in either CVA or Administration scenario)
2) The Claim of a Creditor who DOESN’T respond (aka VOTE) will NOT be taken into account for the purpose of requisite Majorities and CVA would be binding on those who DIDN’T VOTE (Page 3, Also see Clauses 1.3 & 1.4 on Page 43, Pages 44 & 45)
3) No Warranties / Undertakings that the CVA would be implemented or it would NOT be Altered / Revoked / Suspended. It is Forward looking (expects/anticipates/estimates, etc.) and NO Warranties to Accuracy of the Proposed Amounts. NO Litigation possible. (Page 4)
4) WACL was an Agent for P2P Investments (Page 19)
5) Company would still Service the Loan Book and Cloverleaf would pay 2% per Annum for this (Page 24)
6) WACL would go into a Solvent Winddown (Clause 4, Page 25)
7) Claims / Litigations possible (as Loanbook Sale was not done after obtaining prior consent of all investors) in case the CVA is Voted Against and it goes into Administration (Page 27 – Reviewable transactions). Directors want to Compromise / Waive any such Potential Claims by paying £1 – so NO Claims possible. (Pages 27, 28, 29, 37, 39, 40, 68, 69, 70)
8) So, P2P Creditors are Contingent Creditors ? (Clause 3.6, Page 39, Page 51)
9) The Loan Book was Sold (in an Emergency basis) in order to secure a Solvent Sale – so it wasn’t widely advertised / publicised ? M1, M2, M3 and PMB Creditors won’t receive anything from this Sale. (Page 36)
10) Allowed / Disputed – Notice of claim to be submitted to the Supervisors before the Claims Date ? – Anyone knows what this means or does this have to be done before the Voting ? (Clause 15, Page 71, 72 & 73) ?
11) NO CREDITORS’ COMMITTEE (Clause 24.1, Page 80)
12) NO WARRANTIES (Clause 25.1, Page 80)
13) Any Profits ONLY in excess of £5.5 Million (Hurdle) will be distributed @ 50% to Ordinary / Preferred Shareholders (Page 109)
14) The Term 9.13 of the P2P Lender Ts & Cs, under which they undertook to Sell the Loanbook to Cloverleaf, only states that Investors provide the authority to SUB-CONTRACT to a 3rd Party in case of a Default and in the Best Interest of the P2P Creditors. Point to Note that NOT all Loans have Defaulted, neither it is in the BEST Interest of the Investors nor a Sale is a Sub-Contract ? (Page 114, 115, 117)
15) Schedule 12 - Reviewable Transactions (Page 119)
16) Clause F – P2P Creditors are NOT Contractually due their Payments ? Was this at all the Case ? (Page 119)
17) DEED OF RELEASE – 1C) & 2) Creditors FULLY & ABSOLUTELY agree to WAIVE, RELEASE, TERMINATE & DISCHARGES the Parties from ANY Breaches or Defaults or Obligations (Page 130)
Could anyone with more understanding please Clarify the Points highlighted in BLUE please.
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Post by et on Oct 7, 2020 16:49:25 GMT
Although I haven’t read the whole document thoroughly and DO NOT claim to have understood it all, here are few notable points that I feel need highlighting :
1) There is NO mention of the % Recovery / Payments for the P2P Investors in the entire CVA (in either CVA or Administration scenario)
2) The Claim of a Creditor who DOESN’T respond (aka VOTE) will NOT be taken into account for the purpose of requisite Majorities and CVA would be binding on those who DIDN’T VOTE (Page 3, Also see Clauses 1.3 & 1.4 on Page 43, Pages 44 & 45)
3) No Warranties / Undertakings that the CVA would be implemented or it would NOT be Altered / Revoked / Suspended. It is Forward looking (expects/anticipates/estimates, etc.) and NO Warranties to Accuracy of the Proposed Amounts. NO Litigation possible. (Page 4)
4) WACL was an Agent for P2P Investments (Page 19)
5) Company would still Service the Loan Book and Cloverleaf would pay 2% per Annum for this (Page 24)
6) WACL would go into a Solvent Winddown (Clause 4, Page 25)
7) Claims / Litigations possible (as Loanbook Sale was not done after obtaining prior consent of all investors) in case the CVA is Voted Against and it goes into Administration (Page 27 – Reviewable transactions). Directors want to Compromise / Waive any such Potential Claims by paying £1 – so NO Claims possible. (Pages 27, 28, 29, 37, 39, 40, 68, 69, 70)
8) So, P2P Creditors are Contingent Creditors ? (Clause 3.6, Page 39, Page 51)
9) The Loan Book was Sold (in an Emergency basis) in order to secure a Solvent Sale – so it wasn’t widely advertised / publicised ? M1, M2, M3 and PMB Creditors won’t receive anything from this Sale. (Page 36)
10) Allowed / Disputed – Notice of claim to be submitted to the Supervisors before the Claims Date ? – Anyone knows what this means or does this have to be done before the Voting ? (Clause 15, Page 71, 72 & 73) ?
11) NO CREDITORS’ COMMITTEE (Clause 24.1, Page 80)
12) NO WARRANTIES (Clause 25.1, Page 80)
13) Any Profits ONLY in excess of £5.5 Million (Hurdle) will be distributed @ 50% to Ordinary / Preferred Shareholders (Page 109)
14) The Term 9.13 of the P2P Lender Ts & Cs, under which they undertook to Sell the Loanbook to Cloverleaf, only states that Investors provide the authority to SUB-CONTRACT to a 3rd Party in case of a Default and in the Best Interest of the P2P Creditors. Point to Note that NOT all Loans have Defaulted, neither it is in the BEST Interest of the Investors nor a Sale is a Sub-Contract ? (Page 114, 115, 117)
15) Schedule 12 - Reviewable Transactions (Page 119)
16) Clause F – P2P Creditors are NOT Contractually due their Payments ? Was this at all the Case ? (Page 119)
17) DEED OF RELEASE – 1C) & 2) Creditors FULLY & ABSOLUTELY agree to WAIVE, RELEASE, TERMINATE & DISCHARGES the Parties from ANY Breaches or Defaults or Obligations (Page 130)
Could anyone with more understanding please Clarify the Points highlighted in BLUE please.
Some interesting observations here and will give my views when I have a chance but want to focus on 5. I will say this now though, 3, 7, 11, 12 & 13 all show how their true interest are in covering their backs for the dodgy things they have done prior to CVA and are clearly not in our best interests as creditors. in respect of the loan book sale and I caveat this with the information isn't easy to follow (some might say deliberately so) so might be wrong. Essentially they are proposing that after the sale of the loan book Wellesley will continue to manage it for a fee. This fee is going to fund repayment to unsecured creditors. Do the maths on 2% of £45m and you will see how little this will generate whilst Cloverleaf (controlled by Wellesley group) will keep all repayments generated. Remember this is repayments based on >£110m of loans not the £45m to be paid for it. Pg. 140 shows this I think. Cloverleaf will make £5.6m from interest payments on the loan book of which only £960k goes to Wellesley. In fact, Cloverleaf is predicted to make so much cash it will lend it to Wellesley to pay us back. This is cash that if it wasn’t for the loan book sale would be due to us! Laughing all the way to the bank as another poster put it. there is mention of a dividend to Wellesley but its not clear where this is coming from as the figures don't show distributable profits but given its a new company it cant have historic profits and case studies don't show that much profit being generated.
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ventora
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Post by ventora on Oct 8, 2020 7:51:48 GMT
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mah
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Post by mah on Oct 8, 2020 10:05:20 GMT
Although I haven’t read the whole document thoroughly and DO NOT claim to have understood it all, here are few notable points that I feel need highlighting :
1) There is NO mention of the % Recovery / Payments for the P2P Investors in the entire CVA (in either CVA or Administration scenario)
2) The Claim of a Creditor who DOESN’T respond (aka VOTE) will NOT be taken into account for the purpose of requisite Majorities and CVA would be binding on those who DIDN’T VOTE (Page 3, Also see Clauses 1.3 & 1.4 on Page 43, Pages 44 & 45)
3) No Warranties / Undertakings that the CVA would be implemented or it would NOT be Altered / Revoked / Suspended. It is Forward looking (expects/anticipates/estimates, etc.) and NO Warranties to Accuracy of the Proposed Amounts. NO Litigation possible. (Page 4)
4) WACL was an Agent for P2P Investments (Page 19)
5) Company would still Service the Loan Book and Cloverleaf would pay 2% per Annum for this (Page 24)
6) WACL would go into a Solvent Winddown (Clause 4, Page 25)
7) Claims / Litigations possible (as Loanbook Sale was not done after obtaining prior consent of all investors) in case the CVA is Voted Against and it goes into Administration (Page 27 – Reviewable transactions). Directors want to Compromise / Waive any such Potential Claims by paying £1 – so NO Claims possible. (Pages 27, 28, 29, 37, 39, 40, 68, 69, 70)
8) So, P2P Creditors are Contingent Creditors ? (Clause 3.6, Page 39, Page 51)
9) The Loan Book was Sold (in an Emergency basis) in order to secure a Solvent Sale – so it wasn’t widely advertised / publicised ? M1, M2, M3 and PMB Creditors won’t receive anything from this Sale. (Page 36)
10) Allowed / Disputed – Notice of claim to be submitted to the Supervisors before the Claims Date ? – Anyone knows what this means or does this have to be done before the Voting ? (Clause 15, Page 71, 72 & 73) ?
11) NO CREDITORS’ COMMITTEE (Clause 24.1, Page 80)
12) NO WARRANTIES (Clause 25.1, Page 80)
13) Any Profits ONLY in excess of £5.5 Million (Hurdle) will be distributed @ 50% to Ordinary / Preferred Shareholders (Page 109)
14) The Term 9.13 of the P2P Lender Ts & Cs, under which they undertook to Sell the Loanbook to Cloverleaf, only states that Investors provide the authority to SUB-CONTRACT to a 3rd Party in case of a Default and in the Best Interest of the P2P Creditors. Point to Note that NOT all Loans have Defaulted, neither it is in the BEST Interest of the Investors nor a Sale is a Sub-Contract ? (Page 114, 115, 117)
15) Schedule 12 - Reviewable Transactions (Page 119)
16) Clause F – P2P Creditors are NOT Contractually due their Payments ? Was this at all the Case ? (Page 119)
17) DEED OF RELEASE – 1C) & 2) Creditors FULLY & ABSOLUTELY agree to WAIVE, RELEASE, TERMINATE & DISCHARGES the Parties from ANY Breaches or Defaults or Obligations (Page 130)
Could anyone with more understanding please Clarify the Points highlighted in BLUE please.
Some interesting observations here and will give my views when I have a chance but want to focus on 5. I will say this now though, 3, 7, 11, 12 & 13 all show how their true interest are in covering their backs for the dodgy things they have done prior to CVA and are clearly not in our best interests as creditors. in respect of the loan book sale and I caveat this with the information isn't easy to follow (some might say deliberately so) so might be wrong. Essentially they are proposing that after the sale of the loan book Wellesley will continue to manage it for a fee. This fee is going to fund repayment to unsecured creditors. Do the maths on 2% of £45m and you will see how little this will generate whilst Cloverleaf (controlled by Wellesley group) will keep all repayments generated. Remember this is repayments based on >£110m of loans not the £45m to be paid for it. Pg. 140 shows this I think. Cloverleaf will make £5.6m from interest payments on the loan book of which only £960k goes to Wellesley. In fact, Cloverleaf is predicted to make so much cash it will lend it to Wellesley to pay us back. This is cash that if it wasn’t for the loan book sale would be due to us! Laughing all the way to the bank as another poster put it. there is mention of a dividend to Wellesley but its not clear where this is coming from as the figures don't show distributable profits but given its a new company it cant have historic profits and case studies don't show that much profit being generated. The other immediate issue is that P2P Creditors Debt would be considered as £1 for the Voting Purposes - Page 13 explains it - "All and any Claims of the Contingent Creditors (which we are) will be credited for £1".
So, basically, the whole voting has been designed to boot the P2P Investors out.
In all likelihood, the CVA Proposal would be passed and binding on all including the P2P Investors.
So, the immediate need is to get a Legal Challenge to this in the same High Court. I am sure there are some solid points to mount a Legal Challenge and to cancel/postpone this Voting. We only have 2-3 days for this now.
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mogish
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Post by mogish on Oct 8, 2020 15:24:03 GMT
After voting a high court form registering your claim pops up. In section 6 there is box where you can insert disputed amount. Presume I wasted my time inserting the actual figure I am due?
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macq
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Post by macq on Oct 8, 2020 16:26:45 GMT
Repeating my post from the Facebook Forum, for those who aren't yet members of that :
TBH, I don't trust D&P (Duff & Phelps) the slightest.
From D&P's response to Mr Fennel’s query "reviewed the CVA Proposal put forward by Wellesley and found it fit to be considered by creditors", I would expect D&P to know the basic classification of Investors.
But when I asked which class do I belong to, they redirected me to their bosses, Wellesley.
So, without knowing this basic classification, how would they oversee the Voting and Allocate Debts to the Creditors and Count the Votes ?
Looks to me that Wellesley will make all these decisions for them and they would merely rubber stamp them for Fees of £200K + £150K.
And anyone who read the CVA would have discovered that it repeatedly stresses the point that by voting for the CVA, Creditors/Investors would Waive Off / Compromise any Claims whatsoever against anyone including WFC, WACL, CloverLeaf, etc.
So, if the CVA gets passed, there will be no Legal Recourse at all.
Moreover, there will be No Creditors Committee (Clause 24, Page 80). Also, there are No Warranties (Clause 25, Page 80).
That’s the reason I am totally against it – think carefully and Vote wisely. Also, Not participating in the Vote indirectly means Voting in Favour of the CVA.
Not an investor so not sure whats right or wrong but have you mentioned your Facebook group on a bigger forum such as MSE to cover more people and get feedback
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lac47
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Post by lac47 on Oct 8, 2020 16:37:15 GMT
Just been online and voted NO with a request that they reverse the sale of the Loan book to Cloverleaf and also reverse the write-off of the Directors Loans
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Post by mark2465 on Oct 9, 2020 9:50:04 GMT
Just been online and voted NO with a request that they reverse the sale of the Loan book to Cloverleaf and also reverse the write-off of the Directors Loans Just had this back from the SFO. I have replied updating them of the last evidence on here against Wellesley. Once the associated Facebook page goes private I will be moving over to that as there are many other investors on there. Thank you for contacting the Serious Fraud Office (SFO). Dear * The SFO investigates and, where appropriate, prosecutes cases of serious or complex fraud (including cases of domestic or overseas bribery and corruption) which, in the opinion of the Director of the SFO, call for the multi-disciplinary approach and legislative powers available to the SFO. In deciding what cases to adopt, the Director will take into account all the circumstances of the case and consider: cases which undermine UK commercial/financial PLC in general and the City of London in particular; cases where the actual or potential loss involved are high; cases where actual or potential harm is significant; cases where there is a very significant public interest element; and new species of fraud The information you have provided will be carefully evaluated. We will be in touch when we are in a position to advise you of the outcome. Kind regards, The Intelligence Unit sfointra02.sfonet.local/sfointra02/wp-content/uploads/2018/09/Email%20signature%20SFO%20logo.png
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mah
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Post by mah on Oct 9, 2020 10:39:41 GMT
After voting a high court form registering your claim pops up. In section 6 there is box where you can insert disputed amount. Presume I wasted my time inserting the actual figure I am due? Does this happen after you complete the Voting or as part of the Voting process ?
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