Mousey
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Post by Mousey on May 10, 2022 10:16:01 GMT
Failed P2P platform FundingSecure faces a new threat of litigation over an allegation of a ‘secret commission’ payment.
The ‘secret commission’ allegation is expected to be added as a counterclaim in on-going legal action listed for trial this Autumn. Click here for a link to the article on my blog
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Post by overthehill on May 10, 2022 13:55:32 GMT
Failed P2P platform FundingSecure faces a new threat of litigation over an allegation of a ‘secret commission’ payment.
The ‘secret commission’ allegation is expected to be added as a counterclaim in on-going legal action listed for trial this Autumn. Click here for a link to the article on my blog
The problem with P2P insolvencies is the law hasn't caught up yet and Administrators work for the creditors. In translation, the unprotected and unrepresented investors get screwed over.
It's time the Administrators and the Courts came to some agreement about releasing investor's money that is sitting in ringfenced client bank accounts. Client money has nothing to do with the constantly growing list of litigation claims. These grievances and claims are against Fundingsecure and its directors and creditors.
They have already paid out on several recovered loans since the start of administration so any deviation in payouts now would mean individual investors being treated differently and unfairly, opening up the floodgates of more counter claims.
Has this fiasco not caused investors enough stress and financial loss ? Are the Administrators and Courts going to freeze investor's money indefinitely while more vultures keep appearing sensing an easy feast.
Do these claimants think ringfenced clients money is within the grabs of litigation or has FS got an undisclosed pile of cash somewhere which make these claims worthwhile ?
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michaelc
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Post by michaelc on May 10, 2022 15:37:12 GMT
Am I to understand that if I take out a mortgage and there is something not "right" or legal or not disclosed to me that not only can I cancel the mortgage but that I don't have to repay any of it ?
Is that what the borrower is attempting to happen or have I got all that wrong?
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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 May 10, 2022 21:44:54 GMT
Failed P2P platform FundingSecure faces a new threat of litigation over an allegation of a ‘secret commission’ payment.
The ‘secret commission’ allegation is expected to be added as a counterclaim in on-going legal action listed for trial this Autumn. Click here for a link to the article on my blog
The problem with P2P insolvencies is the law hasn't caught up yet and Administrators work for the creditors. In translation, the unprotected and unrepresented investors get screwed over.
It's time the Administrators and the Courts came to some agreement about releasing investor's money that is sitting in ringfenced client bank accounts. Client money has nothing to do with the constantly growing list of litigation claims. These grievances and claims are against Fundingsecure and its directors and creditors.
They have already paid out on several recovered loans since the start of administration so any deviation in payouts now would mean individual investors being treated differently and unfairly, opening up the floodgates of more counter claims.
Has this fiasco not caused investors enough stress and financial loss ? Are the Administrators and Courts going to freeze investor's money indefinitely while more vultures keep appearing sensing an easy feast.
Do these claimants think ringfenced clients money is within the grabs of litigation or has FS got an undisclosed pile of cash somewhere which make these claims worthwhile ?
There are multiple different issues here. The current legal action would appear to be a counterclaim against the recovery of the specific loan. Therefore it will impact the specific lenders in that loan as the claim will be against the validity of the loan contract and FS conduct as the lenders agent not FS itself or its creditors. Litigation claims that relate to trust assets ie loan security are not to do with client money. I doubt the claimants think ringfenced client money is within the grabs of litigation, nor are they targeting it. Quistclose specifically relates to client money. Client money is pooled so if there is a question about any of it that affects all of it. Unfortunately there is nothing they can do about distributions made before the Quistclose claim (assuming they arent going to claw money back), unlikely to be any comeback and any claims would be unsecured creditors. There is as you say a wider problem with P2P Insolvency but it isnt specifically one of the law but more one of structure and terms. The fundamental issue is that creditors are not the beneficiaries of any work to recover loans for lenders so why should they bear the cost of that work being done by the platform (and the administrators) The right to recovery loans lies with the security trustee but they have no resources & no income so they have to get the platform to do it and pay them, fees & costs. The only source of money to pay them are trust assets. If the terms are correctly written then the cost will be factored in, fees & recovery costs will take priority and therefore there will be income to pay the platform (or potentially a third party) to do the work. The problem is that the platform dont have terms to allow the costs of recovery to be taken so the Courts have to give them permission. Ultimately thats Berkeley Applegate, which is law that allows protection of trust assets to be penetrated.
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huxs
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Post by huxs on May 11, 2022 7:15:59 GMT
The problem with P2P insolvencies is the law hasn't caught up yet and Administrators work for the creditors. In translation, the unprotected and unrepresented investors get screwed over.
It's time the Administrators and the Courts came to some agreement about releasing investor's money that is sitting in ringfenced client bank accounts. Client money has nothing to do with the constantly growing list of litigation claims. These grievances and claims are against Fundingsecure and its directors and creditors.
They have already paid out on several recovered loans since the start of administration so any deviation in payouts now would mean individual investors being treated differently and unfairly, opening up the floodgates of more counter claims.
Has this fiasco not caused investors enough stress and financial loss ? Are the Administrators and Courts going to freeze investor's money indefinitely while more vultures keep appearing sensing an easy feast.
Do these claimants think ringfenced clients money is within the grabs of litigation or has FS got an undisclosed pile of cash somewhere which make these claims worthwhile ?
There are multiple different issues here. The current legal action would appear to be a counterclaim against the recovery of the specific loan. Therefore it will impact the specific lenders in that loan as the claim will be against the validity of the loan contract and FS conduct as the lenders agent not FS itself or its creditors. Litigation claims that relate to trust assets ie loan security are not to do with client money. I doubt the claimants think ringfenced client money is within the grabs of litigation, nor are they targeting it. Quistclose specifically relates to client money. Client money is pooled so if there is a question about any of it that affects all of it. Unfortunately there is nothing they can do about distributions made before the Quistclose claim (assuming they arent going to claw money back), unlikely to be any comeback and any claims would be unsecured creditors. There is as you say a wider problem with P2P Insolvency but it isnt specifically one of the law but more one of structure and terms. The fundamental issue is that creditors are not the beneficiaries of any work to recover loans for lenders so why should they bear the cost of that work being done by the platform (and the administrators) The right to recovery loans lies with the security trustee but they have no resources & no income so they have to get the platform to do it and pay them, fees & costs. The only source of money to pay them are trust assets. If the terms are correctly written then the cost will be factored in, fees & recovery costs will take priority and therefore there will be income to pay the platform (or potentially a third party) to do the work. The problem is that the platform dont have terms to allow the costs of recovery to be taken so the Courts have to give them permission. Ultimately thats Berkeley Applegate, which is law that allows protection of trust assets to be penetrated. So are you suggesting that platforms should set-up a specific recovery fund which is held within the trust to cover the cost of recovery should they go into administration, if so that does sound very sensible ? I assume there are no platforms out there with this ?
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Post by overthehill on May 11, 2022 8:42:05 GMT
The problem with P2P insolvencies is the law hasn't caught up yet and Administrators work for the creditors. In translation, the unprotected and unrepresented investors get screwed over.
It's time the Administrators and the Courts came to some agreement about releasing investor's money that is sitting in ringfenced client bank accounts. Client money has nothing to do with the constantly growing list of litigation claims. These grievances and claims are against Fundingsecure and its directors and creditors.
They have already paid out on several recovered loans since the start of administration so any deviation in payouts now would mean individual investors being treated differently and unfairly, opening up the floodgates of more counter claims.
Has this fiasco not caused investors enough stress and financial loss ? Are the Administrators and Courts going to freeze investor's money indefinitely while more vultures keep appearing sensing an easy feast.
Do these claimants think ringfenced clients money is within the grabs of litigation or has FS got an undisclosed pile of cash somewhere which make these claims worthwhile ?
There are multiple different issues here. The current legal action would appear to be a counterclaim against the recovery of the specific loan. Therefore it will impact the specific lenders in that loan as the claim will be against the validity of the loan contract and FS conduct as the lenders agent not FS itself or its creditors. Litigation claims that relate to trust assets ie loan security are not to do with client money. I doubt the claimants think ringfenced client money is within the grabs of litigation, nor are they targeting it. Quistclose specifically relates to client money. Client money is pooled so if there is a question about any of it that affects all of it. Unfortunately there is nothing they can do about distributions made before the Quistclose claim (assuming they arent going to claw money back), unlikely to be any comeback and any claims would be unsecured creditors. There is as you say a wider problem with P2P Insolvency but it isnt specifically one of the law but more one of structure and terms. The fundamental issue is that creditors are not the beneficiaries of any work to recover loans for lenders so why should they bear the cost of that work being done by the platform (and the administrators) The right to recovery loans lies with the security trustee but they have no resources & no income so they have to get the platform to do it and pay them, fees & costs. The only source of money to pay them are trust assets. If the terms are correctly written then the cost will be factored in, fees & recovery costs will take priority and therefore there will be income to pay the platform (or potentially a third party) to do the work. The problem is that the platform dont have terms to allow the costs of recovery to be taken so the Courts have to give them permission. Ultimately thats Berkeley Applegate, which is law that allows protection of trust assets to be penetrated.
I'm using client and investor synonymously. For example, are you saying that an investor's frozen 50k in a current or future recovered loan can be taken or seized by a successful Quistclose claim because FS or any company has dubiously spent or wasted a claimant's previous investment in the company. That's what I'm reading.
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iRobot
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Post by iRobot on May 11, 2022 18:02:27 GMT
Am I to understand that if I take out a mortgage and there is something not "right" or legal or not disclosed to me that not only can I cancel the mortgage but that I don't have to repay any of it ? Is that what the borrower is attempting to happen or have I got all that wrong? covers an awfully broad scope - no doubt significantly widened by the time lawyers get involved - that I doubt there's a single 'yes' or 'no' answer to that question. The question of secret (and 'half-secret') commissions has come up before - see p2pindependentforum.com/post/440871/thread and subsequent posts - and I think the consensus on this aspect was that where a contract was rescinded on the basis of a (half-)secret commission, it might be possible to overturn fees / interest / etc associated with the loan but that the capital would still need to be repaid.
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Mousey
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Post by Mousey on May 12, 2022 8:52:47 GMT
Something to add to the Coventry case, which was settled prior to trial, this small spanner that could have been added to the works:  |
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adrian77
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Post by adrian77 on May 14, 2022 8:10:11 GMT
this is my understanding - as yet we do not know just what was going on - unless I missed it we do not know how this commission was paid for - if it was added to the borrower's fees then I can quite understand them being a tad annoyed! Whatever how the hell did FS get into this mess - people use their service in good faith and now we wonder if there has been criminal activity here which was not spotted by FS (at best!)
To be honest if this were me in this situation I would realise I had a very strong hand and would play for time whilst I decided on a final payment below the original loan value and bought a claim for compensation - if London flat prices go up over the next 6 months then quids in!
Just when you thought FS could not get any worse we get this nonsense - I hope people do time over this...
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zuluwarrior
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chap from Newcastle, dabbling here and there. Long-time lurker of the forums
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Post by zuluwarrior on May 18, 2022 23:36:45 GMT
Surely it's completely standard for a broker to earn a fee for.bringing new business to a lender? I lend people money for property deals, I pay the introducer a bit of cash to thank them. Surely there is nothing wrong with that.
Sounds a bit to me like the borrower knows FS is in trouble and is taking the peas.
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adrian77
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Post by adrian77 on May 19, 2022 2:47:31 GMT
yet another interesting FS horlicks
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merlin99
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Post by merlin99 on May 19, 2022 8:45:46 GMT
I bet the receivers are rubbing their hands with glee. Anything that complicates things further is certain to be more grist to their mill and effectively more of the remains of FS cash in their bank!
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zuluwarrior
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chap from Newcastle, dabbling here and there. Long-time lurker of the forums
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Post by zuluwarrior on May 19, 2022 16:57:11 GMT
yet another interesting FS horlicks Just seems a bit steep for a loan to be cancelled because a broker was paid a fee but suppose we can leave it to the courts to decide
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adrian77
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Post by adrian77 on May 20, 2022 0:37:12 GMT
I don't think that is on the table but cancelling all interest certainly is? I guess it is very important as to whether this fee was added to the borrowers interest without him being informed which I would describe as "proper naughty" to use the technical legal language - maybe this borrower is hoping the administrators won't pursue him for the debt as too much trouble for the administrators....
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