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Post by lostsheep on Mar 5, 2021 6:44:11 GMT
Yes, Seedrs, and previous EIS scheme investments - were in THC platform itself and likely completely lost. With limited details, I suspect the investments are all fine and independent while THC itsself ran into cash flow issues so were suddenly unable to pay salaries and rent etc. I don't see how THC its self would have had significantly large creditors as it was purely a platform to take investments and distribute them to properties/developments/loans. The risk of each was with the investor and not THC.
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Post by ed40 on Mar 5, 2021 10:06:44 GMT
I'm not sure if some of the FAQs on THC website have been updated or if I just didn't read them before: I assume we aren't creditors and so don't need to contact the administrator, as we would fall into the categories of investors? Or is it sensible to contact the administrator anyway? Hi jonathan24, I'm sure you've probably read this, but the FAQs has an item further down for investors, stating we shouldn't need to do anything. I have money in 3 of the IF-ISA products, so the money is spread across multiple developments and loans. Is there anyway of knowing where this money was invested, or if it was invested at all? One of the other FAQs mentions we can request to withdraw uninvested funds.
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Post by superowls1 on Mar 5, 2021 14:35:21 GMT
I'm not sure if some of the FAQs on THC website have been updated or if I just didn't read them before: I assume we aren't creditors and so don't need to contact the administrator, as we would fall into the categories of investors? Or is it sensible to contact the administrator anyway? Hi jonathan24, I'm sure you've probably read this, but the FAQs has an item further down for investors, stating we shouldn't need to do anything. I have money in 3 of the IF-ISA products, so the money is spread across multiple developments and loans. Is there anyway of knowing where this money was invested, or if it was invested at all? One of the other FAQs mentions we can request to withdraw uninvested funds. I'd be interested to know if my IF-ISA funds were invested too, I only added them in January, so if they were as diverse as they say the were, I am hopeful that they may still be sat in a client account somewhere, which I believe would mean they are out of reach of the administrators etc
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adrianc
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Post by adrianc on Mar 5, 2021 18:12:35 GMT
I've got outstanding investments in a few HCPs, HCD15 and HCBC1.
I rather suspect the writing's been on the wall for a while...
HCD15 started in autumn 2017, and was originally estimated to complete in Q4 2018 to Q1 2019.
HCBC1 hasn't paid out the dividend due in April 2020.
The original HCPs haven't done badly, for the most part. They seem to be in the throes of being wrapped up - I've had a few voted to sell in the last few months.
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Post by lisao on Mar 5, 2021 21:07:50 GMT
I've got outstanding investments in a few HCPs, HCD15 and HCBC1. I rather suspect the writing's been on the wall for a while... HCD15 started in autumn 2017, and was originally estimated to complete in Q4 2018 to Q1 2019. HCBC1 hasn't paid out the dividend due in April 2020. The original HCPs haven't done badly, for the most part. They seem to be in the throes of being wrapped up - I've had a few voted to sell in the last few months. adrianc - I also have HCD15 and HCBC1 + HCPs. Interestingly, although they didn't pay out the dividend for HCBC1 in April 2020, as you mentioned, I have investments in many of their Auto-invest products (same principle as HCBC1, with interest that pays in April and October each year) and they did pay out full rates of interest for all those investments in October 2020. Perhaps that's a reflection on where funds have been invested. HCBC1 was their very first venture into lending for non-specific loans, perhaps those funds were used to finance some of the projects that are still languishing?.
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Post by cp4321 on Mar 9, 2021 14:48:11 GMT
I am an investor in a number of HCP properties. The administration notification e-mail said "The House Crowd Property (“HCP”) special investment vehicles are also not in administration and will continue to operate as normal." I have not received my dividend payment for HCP157 that was expected by 3rd March 2021.
Has everyone else noticed that their HCP dividends have stopped?
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ilmoro
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Post by ilmoro on Mar 9, 2021 15:54:16 GMT
I am an investor in a number of HCP properties. The administration notification e-mail said "The House Crowd Property (“HCP”) special investment vehicles are also not in administration and will continue to operate as normal." I have not received my dividend payment for HCP157 that was expected by 3rd March 2021. Has everyone else noticed that their HCP dividends have stopped? This is probably to be expected. While the HCP arent in administration I would assume that the dividend payments are made to investors via the HC platform, possibly via the Property Management Co. As both these entitles are in administration the administrators will be required to reconcile all bank accounts, particularly the client accounts and any payments will be paused while they do so. This is covered in the FAQ in reference to investor withdrawals though without specific reference to other payments.
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mancman
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Post by mancman on Mar 10, 2021 9:29:07 GMT
Sad for the investors as it is a decent product if managed correctly and costs are calculated. One of the problems come when you have a large pot of money and promise certain % rates. Greed, stupidity, blindness to risk and just looking at the pot of gold. All work has stopped on the HC developments. Administrators hold the purse strings to the account and will not release until they have untangled it. An earlier post broke down what percentages investors would probably back but apologies I could not copy and paste it here. I would guess you will get 70% of your money back. Tip for future P2P investors. Try and do as must research as you can into the people holding, dispersing your money. www.manchestereveningnews.co.uk/news/local-news/director-ban-for-failed-12m-flats-881804 |
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mancman
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Post by mancman on Mar 10, 2021 9:58:42 GMT
I am a small lender. £3k invested in HCP137 (Stockport) which is 'a large combination retail and residential unit in an excellent location in Stockport consisting of 4 x 2-bed flats, 6 x 1-bed flats and 2 retail units in a lovely building in a conservation area. The property is now fully let and the barbershop has asked for a 10-year lease on his unit. We will be looking to increase rentals as tenants leave and new ones arrive.' Purchased 6 years ago. Dividends received to date are just under £360 so 12% over 6 years. The explanation for poor earnings, I think, is that management and maintenance costs were higher than expected. Valued at £1m in 2018 and offered for sale in 2019. According to THC there have been offers but none at an acceptable level. Revaluation in mid-2020 came out at £725-750k due to pandemic, apparently. You would expect something to be rescuable from this property especially if it remains fully let but I expect that any proceeds will go to the adminstrators, lawyers, agents, valuers etc rather than to lenders.I’m not in this investment nor any on THC. Hadn’t given THC an iota of thought before the last couple of days. 137, like presumably a lot of THC products, is an SPV, presumably holding the property portfolio mentioned. The SPV has 769 B shares,nominal £1,000 each, held by p2pers and 1 A share, nominal value £1, held by THC that, I believe, entitles THC to 25% of any excess on wind up after returning £1,000 per B share. With circa 100 or so SPVs under the THC banner I assume this is the common model for THC. Whether they all hold properties for rent or some also hold properties in development and possibly some hold bridging loans I couldn’t say as I’m an outsider. At a level above the SPVs are various THC trading cos. Eg at least one that raises capital from p2pers - presumably for a 5% fee - and at least, presumably, one that that oversees rental of various portfolios for some management fee. This should all become clearer to outsiders - and perhaps too many “insiders” - as the administration progresses. Presumably there’s been very little new investor capital raised recently and deployed to skim 5% fees upfront. And there’s been very few realisations at a profit to take 25% from. And presumably with rentals under stress even the management fees have been probably suffering. I’d shudder to contemplate further if there are any development projects in the mix as those would be nightmarish. If this quick overview is a fair summary then administration is easy to envisage. Coming back to 137, I’d imagine investors will get something back. Probably more than 50% but less than 100%. I’d see the two biggest haircuts coming from potentially poor property purchase price in the first place and the inevitable firesale discount if sold quickly. There shouldn’t need to be any administration of the SPV and if there is it’d be more likely to be a bit closer to an LPA type administration. If there’s any rent coming in you’d think that’d sufficiently cover any ongoing management-of-the-mess costs. So a 70% to 80% return isn’t inconceivable. Haven’t read the memoranda and articles but it might not be impossible that the p2pers as B shareholders could take control of their SPV, but the coordination and management would be time consuming and cumbersome and there’d need to be consensus and a willing leader with the right skillset. WELL THAT’S THE THEORY and little in P2P follows theory or logic. PLUS I’ve got no clue what the actual property portfolio is, so there is some scope for over optimism on my part. End of my two iota’s worth. This - From Deees is probably the best explanation of the outcome for the investors.
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Post by superowls1 on Mar 11, 2021 17:11:38 GMT
Email update from Administrator: Dear investor, Following our appointment as administrators of The House Crowd and other entities (referred to in this update as “THC”) we want to update you on the progress of the administration to date. First we think that you will find it useful to understand more about the circumstance leading to our appointment and the main statutory objectives that we are bound to address. As previously advised, THC’s board resolved to place the Company into administration on 22 February 2021 and proposed for administrators to be appointed. This resolution was passed mainly at the behest of the non-executive directors on the board although THC’s Chief Executive also voted for the resolution. Notwithstanding that we were proposed administrators by THC’s board, after obtaining consent from the FCA our appointment was only effective following confirmation by the High Court and we act as officers of the Court. This means that we are bound to conduct the administration with objectivity, integrity and independence with our primary duty being to maximise realisations for and act in the best interest of THC’s unsecured creditors. To be able to meet this primary duty one of our main objectives is to, as far as possible, ensure that the wind down of THC’s business is undertaken in an orderly manner. Key to this is to pursue every avenue to return investors’ capital (including accrued interest if possible) as expediently as we can. We are still very early in the administration to be able to advise investors whether this can be achieved. Any client account funds will be repaid when a reconciliation of total funds held by THC is complete (assuming no issues are identified). In addition to the above priorities, we have a statutory duty to investigate the reasons for the failure of THC, including considering and reporting to the Secretary of State on the conduct of all directors within 3 years of our appointment. Should you have any information that may assist us in this regard please contact us at thehousecrowd@quantuma.com. We have established that the majority of THC’s bridging loan book was already in default at the date of our appointment. There are four outstanding loans not in default and we intend to continue to manage them in the normal course of business. In relation to the development loan book administered by THC we confirm that all of the loans were already in default at the date of our appointment and remain so. Since our appointment we have been appraising each loan administered by THC and its associated collateral in order to evaluate recovery prospects for investors. Based on our initial assessment it is likely that we will continue to pursue the strategies that are currently in place to manage the wind down of the bridging loan book. However, this will generally be subject to continual review as any specific borrower circumstances change. This process is ongoing and we will update investors on progress regularly through THC’s website www.thehousecrowd.com. As you are aware, one of THC entities that we are appointed over is House Crowd Property Management (“HCPM”). HCPM has a management agreement in place with c.61 individual special purpose vehicles denoted House Crowd Property 1, 2, etc. (“HCPs”) that own rental properties on behalf of retail investors. We are currently evaluating the nature of HCPM’s management services with the HCPs and whether it is commercially beneficial for the creditors of HCPM for this arrangement to continue. We hope to provide an update in this regard shortly. |
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Post by lisao on Mar 12, 2021 10:50:34 GMT
There is also an update to the FAQs on THC website: Frequently Asked Questions update – 11 March 2021
Based on additional questions received from investors and other stakeholders we have provided further FAQs below. Can I withdraw money in held in my online wallet?
Where an investor has made a deposit that has not been deployed by THC into an investment product, these funds will be returned by the administrators providing we can clearly demonstrate that these funds belong to the investor in question. What is a Special Purpose Vehicle?
A Special Purpose Vehicle (“SPV”) is the name given to a limited company that has been setup specifically for an investment or development project being managed by the company in question. What types of SPVs does THC currently have?
At the commencement of administration THC had two category of SPVs – House Crowd Development (“HCD”) and House Crowd Property (“HCP”). The HCD SPVs are “borrowers” that have been provided with loans by House Crowd Finance (Security Agent) Limited on behalf of individual investors (“the lenders”) to complete property developments projects. The lenders’ expected return from the development projects derive from capital and interest repayments. The HCP SPVs operate differently to HCD SPVs. HCP SPVs own properties which generate rental income from tenants. Retail investors own equity shares in individual HCP SPVs and receive dividend income from any available distributable reserves generated by the HCP SPVs. When will a decision be made on the status of loans and the level of potential capital and interest that may be returned to investors?
It is not possible at this stage for the administrators to be able to predict the potential levels of capital and any interest that may be paid to each investor. However, the administrators expect to be in a position by the time they issue their proposals to creditors within 8 weeks of their appointment, to provide further information on the likely outcome for THC’s investors and creditors. Will I still receive my initial capital and promised interest that I was expecting from THC’s development investments?
It is not currently possible to predict the outcome for investors from the developments. The administrators are working with the management of the development SPVs to evaluate each development in order to understand their funding requirements and likely profitability. What is the status of the development properties and the level of potential capital and interest that may be returned to investors?
In relation to the development loan book administered by THC we confirm that all of the loans were already in default at the date of our appointment and remain so. Since our appointment we have been appraising each loan and its associated collateral in order to evaluate recovery prospects for investors. This process is ongoing and we will update investors on progress regularly through THC’s website www.thehousecrowd.com. Investors making deposits shortly prior to the appointment of the administrators
Where an investor has made a deposit shortly prior to the appointment of the administrators and this has not been deployed by THC into an investment product, these funds will be returned by the administrators providing we can clearly demonstrate that these funds belong to the investor in question. Where this is the case, the administrators will contact the relevant affected investors. We have established that THC was holding a relatively small amount of funds in this regard at the date of the administrators’ appointment. I am a trade creditor of a House Crowd Developments site. What is the current status of funds owed to me?
None of the development SPV companies are in administration and remain under the control of their respective directors. If you are owed money by a development SPV you should continue to liaise with your usual House Crowd Developments contact accordingly. Do I need to use a third party to get my money back?
If you are approached by a company offering to help you recover your money, you should proceed with caution. For most investors, there will be no benefit in involving a third party in making a claim. If you have any questions about the administration process, please contact the administrators at thehousecrowd@quantuma.com. Being Alert to Scams
All customers should remain alert to the possibility of fraud. If you are cold called by someone claiming to be from The House Crowd, Quantuma Advisory Limited or the FCA, please end the call and contact them directly. Find out more about protecting yourself from scams: www.fca.org.uk/consumers/protect-yourself-scams |
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ilmoro
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Post by ilmoro on Mar 12, 2021 11:08:43 GMT
They seem a little muddled on the development loans
The HCD SPVs are “borrowers” that have been provided with loans by House Crowd Finance (Security Agent) Limited on behalf of individual investors (“the lenders”) to complete property developments projects. The lenders’ expected return from the development projects derive from capital and interest repayments.
I assume these are P2P loans in which case HCF(SA) merely holds the security on behalf of lenders, it hasnt provided loans, and Id be very surprised if it had any role in the finance & management of the projects beyond contracting the job to another HC company.
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Post by jonathan24 on Mar 12, 2021 21:14:26 GMT
I'm not sure if some of the FAQs on THC website have been updated or if I just didn't read them before: I assume we aren't creditors and so don't need to contact the administrator, as we would fall into the categories of investors? Or is it sensible to contact the administrator anyway? For other platforms in administration it has seemed sensible to register as a creditor in case the platform has been derelict in their duty and owes you money for current or later shortfalls in payments. I'm sure someone who knows more than me will be along. So in the end, I did get in touch with the administrators and they have confirmed that as investors are not creditors of The House Crowd Limited, we do not need to do anything at this stage. However, they also confirmed that if there is a shortfall in the repayment of any loans, we would have no recourse to The House Crowd Limited. In a way, this makes sense as it confirms my understanding that we did not lend money to The House House Limited but to the SPVs, albeit The House Crowd Limited may have collected the money and held it on trust. The web of companies and the various links between them though makes it difficult to confirm this and I'm not quite sure how that position would then stack up for anyone who invested in the collective funds (which I didn't), rather than in specific projects - who did they lend money to?
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ilmoro
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Post by ilmoro on Mar 12, 2021 23:16:56 GMT
For other platforms in administration it has seemed sensible to register as a creditor in case the platform has been derelict in their duty and owes you money for current or later shortfalls in payments. I'm sure someone who knows more than me will be along. So in the end, I did get in touch with the administrators and they have confirmed that as investors are not creditors of The House Crowd Limited, we do not need to do anything at this stage. However, they also confirmed that if there is a shortfall in the repayment of any loans, we would have no recourse to The House Crowd Limited. In a way, this makes sense as it confirms my understanding that we did not lend money to The House House Limited but to the SPVs, albeit The House Crowd Limited may have collected the money and held it on trust. The web of companies and the various links between them though makes it difficult to confirm this and I'm not quite sure how that position would then stack up for anyone who invested in the collective funds (which I didn't), rather than in specific projects - who did they lend money to? Guess they are assuming that everything the House Crowd has done is above board and that there will be nothing that results in contingent liabilities to lenders leading to them being creditors for shortfalls ... seems a little precipitous before they have had chance to check all the closets for skeletons ... the ghost of Lendy, Collateral, FS will always loom large over P2P insolvencies.
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Post by lisao on Mar 15, 2021 19:01:44 GMT
From The House Crowd Developments site: housecrowd-developments.com/the-house-crowd/The House Crowd
As widely reported, peer to peer investment platform, the House Crowd, was placed into administration on Wednesday 24th February 2021. House Crowd Developments and its associated development projects (SPV’s) are separate entities to the House Crowd. These companies are not in administration. The House Crowd was a major funding stream for House Crowd Developments and the administration process is expected to cause a short temporary delay to construction until funding is approved for release to assist with the completion of the remaining projects delivered for the platform. All projects are classed as assets by the House Crowd administrators. House Crowd Developments continues to be owned and operated by Frazer Fearnhead and Justin Molloy. Frazer co-founded the House Crowd in 2012. In December 2019, he stepped back from day to day operations of the House Crowd and appointed a new Chief Operating Officer to run the House Crowd so he could focus on the development businesses. |
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