adrian77
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Post by adrian77 on May 16, 2024 21:40:28 GMT
what an insightful. non-patronising and intelligent comment if only I had thought of that...
Maybe we will learn more AFTER these court hearings
From Mousey's web page very true - and I am very grateful for his posiitve input...
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mah
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Post by mah on May 18, 2024 10:03:01 GMT
The representative lender's (respondent's) Barrister's fees will be paid from the Funding Secure Client Money Funds. Now, it is not clear whether it'll be only from the Funds held under Quistclose Trust, the Disputed Money (or first from Quistclose Trust) or the WHOLE of the Client Money (including the 7.5% being held as Contingency for non-Quistclose Loans and any future Loan realisations). I suspect that it'd be from the entire FS Client Money including QC Trust, 7.5% Contingency Fund as well as any future Realisations. The worst bit is when FS sensibly (for once) suggested that the Barrister's Fees be capped to £500K (the total amount of the Claim), the Barrister got the Court to over-rule that - which means the Legal Fees to just defend £500K could easily be £750K (a potential amount, for eg.) or even more - it is now uncapped. Isn't it common sense to cap it at the Maximum amount of the Claim ? Who, in right frame of mind would be prepared to throw away more money than the claim itself, unless there is a vested interest ? Go Figure ! Spend £750K or even more to defend £500K. Whether you Win or Lose, you end up Losing. What could be a better example of throwing Good Money after Bad ? He is now “indemnified” by the investors – i.e. the investors are to pay his legal fees, whether they want this or not. And, this would affect every Investor across the board, whether or not their Loans are currently ring-fenced under QuistClose Claim. Even for those affected by the QT Loans, the chances of getting anything back are Zilch. For those whose Loans are not affected by QT Loans, they have to pay for those whose Loans are affected for No Fault of theirs (who carried out Investing even after it was clear that things at FS were not going in the right direction). It now appears that the whole fiasco of Silently (keeping the very Investors they were supposed to represent in the Dark) agreeing to the 5% and 7.5% Fees being kept from Recovered Loans was all part of this larger game. And if he loses (god forbid), then the Investors, apart from losing the £500K under QT Claim, will also have to pay, probably an equal or more amount just towards the Legal Fees. On top of it, the Claimant can Claim and Win their Legal Fees to also be paid from the FS Funds (that is us). So, the worst case scenario is we having to foot a bill of £15- £20K £1.5M - £2M and the best case is to foot a bill of, may be, £2.5K £750K (-£500K win). £53K has already been clocked (more than 10%) and @ £22K/month, it won't take long to drain down the entire Fund. With this episode, any remaining chance of seeing any further money just disappeared !
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Post by Gisele on May 21, 2024 9:28:26 GMT
In tribute to my ignorance, may I ask ...
If the Quistclose Trust ruling goes against the claimant (and therefore in the favour of the investors), would we really still have to pay the legal fees? Why would the judge not rule that all legal fees are to be covered by the claimant should it be ruled that his case was without merit?
If a "dishonest" character were able to bring about a "dodgy" case that the "victims" were liable to have to pay through the nose to defend, is that not tantamount to a swindle ... "offer me a huge sum of money to settle my dodgy case out of court or I'll bankrupt you with legal fees" ... is this what is called justice these days?
I'm left speechless and dumbstruck at how the world has come to this.
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adrian77
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Post by adrian77 on May 21, 2024 10:46:44 GMT
In tribute to my ignorance, may I ask ...damn good questions
If the Quistclose Trust ruling goes against the claimant (and therefore in the favour of the investors), would we really still have to pay the legal fees? Why would the judge not rule that all legal fees are to be covered by the claimant should it be ruled that his case was without merit?
Personally I have re-read the excellent Mousey notes but I am still puzzled as to what enables this character to bring such an action in the first place - I suspect we are not getting the full story here - if it were that easy then surely all creditors worried about their loans would simply cry "Quistclose" ? Maybe there was a clause in the lending agreement to cover this but we can't even see the money in the accounts let alone the legal agreement
As I have said before this strikes me as "interesting" (choosing my words carefully!) and I strongly suspect linked to the Manchester land deal but somebody got wise to it and hence we are in this mess
If a "dishonest" character were able to bring about a "dodgy" case that the "victims" were liable to have to pay through the nose to defend, is that not tantamount to a swindle ... "offer me a huge sum of money to settle my dodgy case out of court or I'll bankrupt you with legal fees" ... is this what is called justice these days?
Sadly this despicable tactic is commonplace within the building industry where the "big boys" bully the small ones
As Mr M said “I am nevertheless engaging with the Proceedings with a view to being appointed as a representative of the General Investors. I am doing so as I believe it is unfair for the Quistclose Claim to be unopposed, and for the interests of General Investors not to be represented, simply because the circumstances of the case prevent individuals from engaging in the Proceedings.“
I think the word UNFAIR says it all - personally I think it is right to engage Mr M despite the incredible legal costs e.g. £53K for a 2 hour legal hearing !
In short I agree with you - it strikes me as a totally bogus action design to bully us into not doing anything about it - the ownder of the litigant company calls himself an "entrepreneur" who supports Bitcoin etc - not what I would call him!
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mah
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Post by mah on May 25, 2024 9:16:15 GMT
I suppose if the QT Claimant loses the case, and that's a very big assumption without knowing all the details, the Winning Party could ask his Legal Fees to be paid for by the Losing Party. As to what the Judge would decide is another question.
What happened in the case of the 5% Fee ? Despite winning the Case, the Creditors' Committee agreed for the Admins to Charge the 5% Fee as Expense Contribution on all Loans anyway (the logic was that otherwise the Admins would go bust - well, shouldn't one have thought about that before going down costly Litigation Route ?). So, what was achieved by that fight (I agree it's morally right, but is it practically the sensible thing to do) ? I think the Lenders ended up Paying for the Legal Fees of both the Parties (please correct me if I am wrong, as I failed to obtain that detail despite numerous emails, etc.). The Losing Party's Fees definitely came from the pot. Not sure if the Winning Party claimed their Fees from the Losing Party (indirectly us) or not. But in either scenario, Lenders ended up Paying for the 5% (that was contested) and at least one set of Legal Fees, if not Both. What is the Guarantee that something similar won't happen in this case too ?
I think that every Investor who doesn't agree to be a Part of this Claim should have the Right to Disassociate himself/herself from this Claim (diagree to be Represented) and also Disagree to Indemnify to Pay the Legal Fees.
Now I'm not sure how exactly to do this ?
Any Suggestions / Pointers please ?
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agent69
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Post by agent69 on May 25, 2024 14:11:12 GMT
Fortunately I'm not in this loan for big money. However, can I see if I've got this right:
J C Starr entered into a written agreement with FS to pay £500k onto the platform. The money was to be retained in a seperate account, and was to be used to underwrite new loans on the platform (before these loans were offered to retail lenders). FS had sole discretion on which loans would be funded. However, the money was never used for the specified purpose, instead the money was:
- used to cover general platform running costs, and / or
- transfered into the client account to make good shortfalls in payments to investors, and / or
- used to fund off platform loans
I am struggling to understand why you can't have a simple (and cheap) legal case to look at the written agreement to get a decision on whether a QT exists or not. Incurring significant legal expense in arguing whether JCS can take money from the client account seems a bit like putting the cart before the horse. From my perspective if a QT exists then it would be fair that any part of the £500k:
- used to pay platform running costs should be recovered from the assetts of FS (assuming they have some)
- paid into the client account should be repaid by investors that incorrectly received that money
- used to fund off platform loans, should be returned to JCS based on whatever was recovered from these borrowers.
I can't see that it could be legally allowed for JCS to plunder the contents of the client account, irrespective of where that mony came from.
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mah
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Post by mah on May 25, 2024 17:02:06 GMT
Exactly. In any case, the Judge would firstly have to establish this - that whether or not a QT exists. If it exists, only then it could be argued / contested ?
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ilmoro
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Post by ilmoro on May 25, 2024 17:27:25 GMT
Fortunately I'm not in this loan for big money. However, can I see if I've got this right:
J C Starr entered into a written agreement with FS to pay £500k onto the platform. The money was to be retained in a seperate account, and was to be used to underwrite new loans on the platform (before these loans were offered to retail lenders). FS had sole discretion on which loans would be funded. However, the money was never used for the specified purpose, instead the money was:
- used to cover general platform running costs, and / or
- transfered into the client account to make good shortfalls in payments to investors, and / or
- used to fund off platform loans
I am struggling to understand why you can't have a simple (and cheap) legal case to look at the written agreement to get a decision on whether a QT exists or not. Incurring significant legal expense in arguing whether JCS can take money from the client account seems a bit like putting the cart before the horse. From my perspective if a QT exists then it would be fair that any part of the £500k:
- used to pay platform running costs should be recovered from the assetts of FS (assuming they have some)
- paid into the client account should be repaid by investors that incorrectly received that money
- used to fund off platform loans, should be returned to JCS based on whatever was recovered from these borrowers.
I can't see that it could be legally allowed for JCS to plunder the contents of the client account, irrespective of where that mony came from.
AIUI the Court will decide if the QT exists before dealing with the more complex argues over who can claim the client funds. Recovery from FS - unlikely to be possible, any money will go to secure creditors before anyone else other than admin fees etc From lenders - I suspect, given the shambles the CA was that anyone actually knows who they are. Off platform - doubt recoveries on these are likely to be any better than lender loans & still the issue of who that money correctly belongs to. Claimant would merely be a unsecured creditor. Total mess but fortunately one I've avoided for once. On paper the client account has already been plundered, the question is who should suffer from the shortfall
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rocky1
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Post by rocky1 on May 26, 2024 8:05:46 GMT
why/how are the people/lenders who fund the whole lot of this farce not secured creditors.we really do not have the secured lending first charge spiel on any loans in p2p. i have asked this question a few times and am still none the wiser.
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ilmoro
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Post by ilmoro on May 26, 2024 10:55:31 GMT
why/how are the people/lenders who fund the whole lot of this farce not secured creditors.we really do not have the secured lending first charge spiel on any loans in p2p. i have asked this question a few times and am still none the wiser. We are secured creditors of the borrowers whom we lent money to. We are not secured creditors of FS as we didnt lend them any money. We may be unsecured creditors because we have a legal claim against FS for their failings as our agent in relation to our loans to borrowers, client money failings etc.
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merlin99
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Post by merlin99 on May 26, 2024 11:50:51 GMT
why/how are the people/lenders who fund the whole lot of this farce not secured creditors.we really do not have the secured lending first charge spiel on any loans in p2p. i have asked this question a few times and am still none the wiser. We are secured creditors of the borrowers whom we lent money to. We are not secured creditors of FS as we didnt lend them any money. We may be unsecured creditors because we have a legal claim against FS for their failings as our agent in relation to our loans to borrowers, client money failings etc. ilmoro You hit the nail right on the head. I am frankly amazed at the number of people who lent money and sometimes big money too through FS and do not realise this fact.
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adrian77
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Post by adrian77 on May 26, 2024 13:09:21 GMT
I am struggling to understand why you can't have a simple (and cheap) legal case to look at the written agreement to get a decision on whether a QT exists or not me too - I have gone over Mousey's notes again - if I understand them correctly Mr M will be mounting a defence to this on our behalf and I guess his first step will be to seek proof this was indeed a formal quistclose loan. If it was then why the hell did FS accept it but I really wonder if it was an unoffical payment designed to make loadsamoney at our expense - outrageous thing to think but there you go. I just can't wait to find out what really happened here - sad fact is that we have to pay for it...
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ilmoro
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Post by ilmoro on May 26, 2024 16:06:27 GMT
I am struggling to understand why you can't have a simple (and cheap) legal case to look at the written agreement to get a decision on whether a QT exists or not me too - I have gone over Mousey's notes again - if I understand them correctly Mr M will be mounting a defence to this on our behalf and I guess his first step will be to seek proof this was indeed a formal quistclose loan. If it was then why the hell did FS accept it but I really wonder if it was an unoffical payment designed to make loadsamoney at our expense - outrageous thing to think but there you go. I just can't wait to find out what really happened here - sad fact is that we have to pay for it... It won't be his first step, it will be the Courts's first step AIUI. The Court controls how a case proceeds, though with input from the legal represented of the participants ... that's what CMCs are about. There isn't a Quistclose loan, that is something that arise from conduct ... money is lent for one purpose but is used for another so becomes subject to a trust. FS accepted a loan on terms because it needed the money for a reason.
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adrian77
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Post by adrian77 on May 26, 2024 20:03:52 GMT
well that is bleeding obvious - question is what was the real reason ....
This Quistclose business is not so obvious to me
Quistclose :A loan arrangement giving rise to a trust of the money loaned to enable the borrower to carry out a specified purpose, resulting, if the purpose is performed, in a pure debtor-creditor relationship excluding any trust but in the event of non-performance by the borrower enabling the lender to rely on the loaned money as held on trust for the lender.
Well I guess Mr M will seek to get a hold of this agreement - if a formal one exists...
Well this is one for our learned friends to pontificate over at our expense
As I said this strikes me as a nasty blocking tactic - you never know. Whether FS were complicit I have no idea
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iRobot
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Post by iRobot on May 27, 2024 10:39:05 GMT
We are secured creditors of the borrowers whom we lent money to. We are not secured creditors of FS as we didnt lend them any money. We may be unsecured creditors because we have a legal claim against FS for their failings as our agent in relation to our loans to borrowers, client money failings etc. ilmoro You hit the nail right on the head. I am frankly amazed at the number of people who lent money and sometimes big money too through FS and do not realise this fact. Yep, in the bigger picture, lenders are suppliers and nothing more. (Same reason platforms are willing to close down their 'retail' side when lower-cost - much lower when measured in TEI terms - suppliers are found.
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