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Post by earthbound on May 30, 2016 18:36:42 GMT
It will be very interesting going forward to see the results of this. The loan was £1.7m , afaik this was not an extended loan, so 152 days interest outstanding, a list of additional fees to be added, receivers costs, legal costs, sale costs etc etc, accrued interest payments to the gullible, unfortunately a £2.1m recovery of this asset will not cut the mustard, and to boot , after some research the purchase price of this asset c1yr ago will also not cut the mustard either.
edit... Hence my banging on about the change in the T&Cs... but not to worry.. SS have already covered their backs.
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adrianc
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Post by adrianc on May 30, 2016 18:43:25 GMT
afaik this was not an extended loan, so 152 days interest outstanding Just because it's not (been announced as) formally extended does not mean that the borrower hasn't been paying the interest on a monthly basis. The business has gone into administration. Lendy are a secured creditor of the business. Not only do they have a charge against the property, but there may well be other assets within the business which can be claimed against (and which will be offset against the administration fees). Right now, the business is continuing to trade. We do not know whether this particular garden centre is trading profitably or not - it may well be that the costs of the failed development plans (here and/or in Canada) have taken the limited company down.
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mikes1531
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Post by mikes1531 on May 30, 2016 18:47:39 GMT
Since you brought up the subject of solvency what evidence do you have that a company whose last published financial information gives net assets of less than £400k and now has a defaulted debt of £1.7million does have net (positive) assets? All this talk of being insolvent is ridiculous. SS are incredibly profitable. Business model explained here:http://www.forum.p2pmoney.co.uk/thread/2639/convinced?page=1&scrollTo=47776 From every loan, SS deduct 6% up front for their own interest fee cut (on top of the 12% for investors) as well as a 4% arrangement fee. On £100 million worth of loans, they're doing very well for themselves. : Just because companies have revenue coming in doesn't make them profitable. Without knowing what they're spending, you're missing some rather critical data. Having said that, though, SS ought to be doing well as a P2P agent/broker, which they are for loans written under the New Ts&Cs. The way they started out, however, with the Old Ts&Cs, they were very exposed to losses if borrowers defaulted. Aside from any pressure they may have had from the FCA to move to a truer P2P model, I expect their accountants and legal advisers also would have recommended such a change. With an old loan, such as PBL020, when it comes to producing accounts someone is going to have to make a judgement as to the likely timing and result of the security sale. If that's felt to be less, after all fees, costs, and accrued interest to investors, than the £1.7M face value of the loan then -- AIUI, and I'm certainly not an expert -- provision for this has to be included in the accounts, and that will mean a reduction in SS profit and net worth. Furthermore -- again AIUI -- every Old loan SS have made should be looked at similarly, and provisions made for potential losses if they are judged to be likely. This ought to be done even before a loan is declared to be in default as PBL020 has been. The point is that if an examination of all of the Old loans in SS's portfolio were to produce a long list of appropriate loss provisions, then SS/Lendy could have a negative net worth, and that would mean they were insolvent. I'm not suggesting that's likely, but if it were to be the case, then SS/Lendy could get into deep trouble for trading while insolvent. The financial crisis of 2008 is an example of how this works. Banks booked massive losses when they took a good look at the prospects for repayment of large numbers of loans they had made. The losses might not have been crystallised, since the loans still were on the banks' balance sheets as assets, but they had to take a realistic view of repayments prospects and adjust those asset values. And we all probably know how that episode ended up.
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Post by meledor on May 30, 2016 18:53:28 GMT
Not at all. In fact your comparison completely misses the point. There is no desire to suppress the ability of people to voice opinions. However whingeing on this board does seem at times to be so infectious that it is good to hear a robust contrary view. That is especially true in the last few days when a fresh outbreak has been provoked by all sorts of scaremongering - including Lendy Ltd being potentially insolvent . I believe it is you that misses the point. A robust rebuttal is of course a valid opinion but to tell people at the end to stop whining and go away is "no platforming" Since you brought up the subject of solvency what evidence do you have that a company whose last published financial information gives net assets of less than £400k and now has a defaulted debt of £1.7million does have net (positive) assets?
You comment yesterday about potential insolvency:
- ignores the security (which apart from the garden centre itself includes residential property and 17.5 acres valued at 50% of the outstanding loan) - ignores the discretionary provision fund - assumes lenders are legally obliged to be made whole by Lendy Ltd under the relevant T&Cs.
On that last point I think you must have imagined (perhaps like others here - judging by some of the comments over the last couple of days) that lenders were not exposed to loss of capital (under the old T&C's - not just the new ones). See my comment here:
p2pindependentforum.com/thread/1820/property-loan-20-default?page=18&scrollTo=117370
What do you think the provision fund was set up for unless there was a risk of lenders suffering a loss on default?
If 'stop whining' means 'go away', then surely you likewise must consider the fact that Saving Stream's earlier comment was called 'confrontational' and 'offensive nonsense' an encouragement to cease posting and to be 'no platforming'?
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Post by earthbound on May 30, 2016 18:56:13 GMT
afaik this was not an extended loan, so 152 days interest outstanding Just because it's not (been announced as) formally extended does not mean that the borrower hasn't been paying the interest on a monthly basis. The business has gone into administration. Lendy are a secured creditor of the business. Not only do they have a charge against the property, but there may well be other assets within the business which can be claimed against (and which will be offset against the administration fees). Right now, the business is continuing to trade. We do not know whether this particular garden centre is trading profitably or not - it may well be that the costs of the failed development plans (here and/or in Canada) have taken the limited company down. hi adrian i dont recall any loans that have been extended where we are not informed in the update section, this loan has no updates saying loan has been extended, i was in it to the point of 20 days left, and never saw any info to infer an extension, the rest you have written below is of no consequence, the asset will have to be sold, the BIG question is , how much for? This asset is of interest to a tiny specific market. Im not going to make predictions about what it might achieve , but i definitely think the PF will need to come into play. As a side note. I personally think SS have pulled of a big dis-service to the lenders here with regards the T&Cs around this loan .
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adrianc
Member of DD Central
Posts: 10,014
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Post by adrianc on May 30, 2016 19:01:08 GMT
Just because it's not (been announced as) formally extended does not mean that the borrower hasn't been paying the interest on a monthly basis. The business has gone into administration. Lendy are a secured creditor of the business. Not only do they have a charge against the property, but there may well be other assets within the business which can be claimed against (and which will be offset against the administration fees). Right now, the business is continuing to trade. We do not know whether this particular garden centre is trading profitably or not - it may well be that the costs of the failed development plans (here and/or in Canada) have taken the limited company down. hi adrian i dont recall any loans that have been extended where we are not informed in the update section, this loan has no updates saying loan has been extended, i was in it to the point of 20 days left, and never saw any info to infer an extension, the rest you have written below is of no consequence, the asset will have to be sold, the BIG question is , how much for? This asset is of interest to a tiny specific market. Im not going to make predictions about what it might achieve , but i definitely think the PF will need to come into play. As a side note. I personally think SS have pulled of a big dis-service to the lenders here with regards the T&Cs around this loan . AIUI, a formal extension is "Yes, we definitely want the loan for six more months, here's six months interest" - since interest is taken for the period of the loan in advance. An unextended loan may well be being paid month-by-month while a sale is attempted - we know that there was a sale close to completion, but the loan was defaulted when that fell apart and no other repayment route was available in the short term. As far as the market is concerned - all that's needed is one potential buyer. Obviously, if there are two - so much the better. If the centre is still trading, and trading profitably, then it will be easier to sell as a going concern. If it wasn't trading profitably, then the administrators probably would not let it continue to trade.
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Post by earthbound on May 30, 2016 19:04:46 GMT
adrian i agree the outcome could go either way, but there's an awful lot of "ifs" in your version.
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Post by meledor on May 30, 2016 19:10:39 GMT
All this talk of being insolvent is ridiculous. SS are incredibly profitable. Business model explained here:http://www.forum.p2pmoney.co.uk/thread/2639/convinced?page=1&scrollTo=47776 From every loan, SS deduct 6% up front for their own interest fee cut (on top of the 12% for investors) as well as a 4% arrangement fee. On £100 million worth of loans, they're doing very well for themselves. With an old loan, such as PBL020, when it comes to producing accounts someone is going to have to make a judgement as to the likely timing and result of the security sale. If that's felt to be less, after all fees, costs, and accrued interest to investors, than the £1.7M face value of the loan then -- AIUI, and I'm certainly not an expert -- provision for this has to be included in the accounts, and that will mean a reduction in SS profit and net worth. Furthermore -- again AIUI -- every Old loan SS have made should be looked at similarly, and provisions made for potential losses if they are judged to be likely. This ought to be done even before a loan is declared to be in default as PBL020 has been. The point is that if an examination of all of the Old loans in SS's portfolio were to produce a long list of appropriate loss provisions, then SS/Lendy could have a negative net worth, and that would mean they were insolvent. I'm not suggesting that's likely, but if it were to be the case, then SS/Lendy could get into deep trouble for trading while insolvent. Mike - This is not correct at all. And even apart from the accounting you are again thinking like dualinvestor that lenders are not on the hook for any loss on default under the old T&Cs.
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Post by dualinvestor on May 30, 2016 19:12:52 GMT
I believe it is you that misses the point. A robust rebuttal is of course a valid opinion but to tell people at the end to stop whining and go away is "no platforming" Since you brought up the subject of solvency what evidence do you have that a company whose last published financial information gives net assets of less than £400k and now has a defaulted debt of £1.7million does have net (positive) assets?
You comment yesterday about potential insolvency:
- ignores the security (which apart from the garden centre itself includes residential property and 17.5 acres valued at 50% of the outstanding loan) - ignores the discretionary provision fund - assumes lenders are legally obliged to be made whole by Lendy Ltd under the relevant T&Cs.
On that last point I think you must have imagined (perhaps like others here - judging by some of the comments over the last couple of days) that lenders were not exposed to loss of capital (under the old T&C's - not just the new ones). See my comment here:
p2pindependentforum.com/thread/1820/property-loan-20-default?page=18&scrollTo=117370
What do you think the provision fund was set up for unless there was a risk of lenders suffering a loss on default?
If 'stop whining' means 'go away', then surely you likewise must consider the fact that Saving Stream's earlier comment was called 'confrontational' and 'offensive nonsense' an encouragement to cease posting and to be 'no platforming'?
Dealing with each of your points The security consists of £2.06million freehold property, £185,000 stock and £185,000 goodwill all at OMV. All subject to costs of realisation and forced sale, I do not know and would suggest no-one else including Lendy Ltd or the Adminstrators know what the nett realisation will be (see mikes1531's explanation above rgarding this and other loans). As you say the provision fund is discretionary not contractual or even a trust. No-one knows what the legal position of the fund is or will be if the loan is Lendy's problem as principal (subject to your comment on that as addressed below). Neither does anyone know the accounting situation with regard to the Provision Fund, e.g. does it form part of Lendy Ltd's assets. As Lendy Ltd was the princial in this loan to both the borrower and lenders you seem to be the only one of the opinion that IF the old T&Cs pertain they, Lendy, have recouse to the lenders.
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mikes1531
Member of DD Central
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Post by mikes1531 on May 30, 2016 19:19:52 GMT
I really couldn't care less about this default; I'm not invested in it, and I do believe that SS will handle it and the PF will do its job if required. I'm happy with SS the Platform, but I do believe that they need to be seen engaging with their investors; not just on a one2one basis (which I'll be the first to admit they are very good at) but as a group. The best place to do that is on this forum. I also don't have a significant investment in PBL020, so the success or failure of the recovery process won't have any direct impact on me. But how SS handle the process will have an indirect impact, and that could be significant. I don't know the details of the property sale the borrower was trying to pursue, and I don't even know why the deal fell apart. If it was within their control, I would have thought the borrower would have done all they could to complete the sale at any price that would have produced more proceeds than they owed to SS. Since they were unable to, and since costs will be increased because of the involvement of receivers and the related delays that will mean more interest accruing to SS investors, ISTM rather unlikely that SS will be able to recover all their capital and accrued interest from the security liquidation. It therefore appears -- to me, anyway -- that the SS PF will have to be involved. I expect it 'will do its job' but I really don't know what the PF trustees think its job is, particularly in respect of accrued interest. That for me is one of the biggest uncertainties here. Another is what SS will do about the fact that the PF balance will drop below the stated 2% level when any PF payout is made. SS have been pretty quiet on the forum this month, and particularly so in the wake of PBL020 being declared to be in default, but I sure hope that they will provide a bit more clarity before much longer. I agree that they need to be seen as engaging with their investors, but I really don't care whether they do it via the forum or via updates emailed to all their investors. It's very important for any company's success to manage their customers' expectations, and SS need to put a high priority on achieving that in the coming days/weeks.
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Post by meledor on May 30, 2016 19:24:48 GMT
You comment yesterday about potential insolvency:
- ignores the security (which apart from the garden centre itself includes residential property and 17.5 acres valued at 50% of the outstanding loan) - ignores the discretionary provision fund - assumes lenders are legally obliged to be made whole by Lendy Ltd under the relevant T&Cs.
On that last point I think you must have imagined (perhaps like others here - judging by some of the comments over the last couple of days) that lenders were not exposed to loss of capital (under the old T&C's - not just the new ones). See my comment here:
p2pindependentforum.com/thread/1820/property-loan-20-default?page=18&scrollTo=117370
What do you think the provision fund was set up for unless there was a risk of lenders suffering a loss on default?
If 'stop whining' means 'go away', then surely you likewise must consider the fact that Saving Stream's earlier comment was called 'confrontational' and 'offensive nonsense' an encouragement to cease posting and to be 'no platforming'?
Dealing with each of your points The security consists of £2.06million freehold property, £185,000 stock and £185,000 goodwill all at OMV. All subject to costs of realisation and forced sale, I do not know and would suggest no-one else including Lendy Ltd or the Adminstrators know what the nett realisation will be (see mikes1531 's explanation above rgarding this and other loans). As you say the provision fund is discretionary not contractual or even a trust. No-one knows what the legal position of the fund is or will be if the loan is Lendy's problem as principal (subject to your comment on that as addressed below). Neither does anyone know the accounting situation with regard to the Provision Fund, e.g. does it form part of Lendy Ltd's assets. As Lendy Ltd was the princial in this loan to both the borrower and lenders you seem to be the only one of the opinion that IF the old T&Cs pertain they, Lendy, have recouse to the lenders. Unfortunately your comment consists of saying you don't know and others can't possibly know and therefore that entitles you to make wild claims (insolvency etc).
The provision fund does not form part of Lendy Ltd's assets.
If you think I am wrong about the old T&Cs you might want to explain why.
web.archive.org/web/20150919113942/http://www.savingstream.co.uk/terms
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cooling_dude
Bye Bye's for the PPI
Posts: 2,853
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Post by cooling_dude on May 30, 2016 19:25:43 GMT
I really couldn't care less about this default; I'm not invested in it, and I do believe that SS will handle it and the PF will do its job if required. I'm happy with SS the Platform, but I do believe that they need to be seen engaging with their investors; not just on a one2one basis (which I'll be the first to admit they are very good at) but as a group. The best place to do that is on this forum. I also don't have a significant investment in PBL020, so the success or failure of the recovery process won't have any direct impact on me. But how SS handle the process will have an indirect impact, and that could be significant. I don't know the details of the property sale the borrower was trying to pursue, and I don't even know why the deal fell apart. If it was within their control, I would have thought the borrower would have done all they could to complete the sale at any price that would have produced more proceeds than they owed to SS. Since they were unable to, and since costs will be increased because of the involvement of receivers and the related delays that will mean more interest accruing to SS investors, ISTM rather unlikely that SS will be able to recover all their capital and accrued interest from the security liquidation. It therefore appears -- to me, anyway -- that the SS PF will have to be involved. I expect it 'will do its job' but I really don't know what the PF trustees think its job is, particularly in respect of accrued interest. That for me is one of the biggest uncertainties here. Another is what SS will do about the fact that the PF balance will drop below the stated 2% level when any PF payout is made. SS have been pretty quiet on the forum this month, and particularly so in the wake of PBL020 being declared to be in default, but I sure hope that they will provide a bit more clarity before much longer. I agree that they need to be seen as engaging with their investors, but I really don't care whether they do it via the forum or via updates emailed to all their investors. It's very important for any company's success to manage their customers' expectations, and SS need to put a high priority on achieving that in the coming days/weeks. Nothing there I can disagree with  Like you say, how the situation pans out is what's important, and unless someone has a time machine we can't tell what's going to happen. I'm going to cease commenting on the subject of the default (until there are any actual developments occur) because I feel the subject is just going around in circles on this thread and the PBL20 thread.
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Post by lb on May 30, 2016 19:26:01 GMT
Lendy is liable for every penny of this loan (capital and interest)
If it isn't paid tomorrow in line with original T & C's then they'll be hearing from my lawyer
Get it Lendy?
MAKE SURE WE ALL GET OUR INTEREST TOMORROW WE KNOW YOU HAVE IT
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Post by dualinvestor on May 30, 2016 19:31:58 GMT
Dealing with each of your points The security consists of £2.06million freehold property, £185,000 stock and £185,000 goodwill all at OMV. All subject to costs of realisation and forced sale, I do not know and would suggest no-one else including Lendy Ltd or the Adminstrators know what the nett realisation will be (see mikes1531 's explanation above rgarding this and other loans). As you say the provision fund is discretionary not contractual or even a trust. No-one knows what the legal position of the fund is or will be if the loan is Lendy's problem as principal (subject to your comment on that as addressed below). Neither does anyone know the accounting situation with regard to the Provision Fund, e.g. does it form part of Lendy Ltd's assets. As Lendy Ltd was the princial in this loan to both the borrower and lenders you seem to be the only one of the opinion that IF the old T&Cs pertain they, Lendy, have recouse to the lenders. Unfortunately your comment consists of saying you don't know and others can't possibly know and therefore that entitles you to make wild claims (insolvency etc).
The provision fund does not form part of Lendy Ltd's assets.
If you think I am wrong about the old T&Cs you might want to explain why.
And you know this how? I didn't say you were wrong about the old T&Cs, I said you appear to be the only person of that opinion. EDIT This thread is about confidence is SS, the only published information about both the company and valuations is more than a year old, so I would venture to suggest that the only irrefutable part of my post IS that I nor anyone else knows.
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Post by earthbound on May 30, 2016 19:35:25 GMT
Lendy is liable for every penny of this loan (capital and interest) If it isn't paid tomorrow in line with original T & C's then they'll be hearing from my lawyer Get it Lendy? MAKE SURE WE ALL GET OUR INTEREST TOMORROW WE KNOW YOU HAVE IT in theory you are quite correct, but unfortunately SS have made a few subtle changes , just prior to this default, to the T&Cs and as for the interest, they don't have it, and i doubt they will when this comes to a conclusion.
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