SteveT
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Post by SteveT on Jul 19, 2018 9:18:07 GMT
Response received to my Support Ticket question below.Time for a possible rethink about Option A...
Jul 17, 20:50 BST Regarding the DFL004 vote, there is some critical information missing from the lender vote description of Option A: 1) Under this option, is Lendy proposing no further recovery action against the borrower, the original valuer or any other party? 2) If the answer to 1 is “no action proposed”, will a claim therefore be made against the Providion Fund for the value of the capital loss? How can lenders reasonably be asked to vote without knowing this?
Support Team 1 (Lendy Ltd) Jul 19, 08:58 BST
Hi Steve,
Thank you for your recent enquiries in relation to the investor vote launched on DFL004 (S****** Factory, Wolverhampton).
As you are aware, we are restricted in the information which we are able to release to you in relation to the loan as a result of the risk of waiving Lendy’s legal professional privilege and the adverse consequences this would have on potential claims which exist to recover the outstanding capital balance, accrued interest and bonus accrual.
Insolvency and restructuring experts appointed by Lendy following expiry of the loan have advised that, even following the completion of the build, the sale proceeds from the security property will be insufficient to repay the capital invested. Should investors therefore choose to proceed with option 1 and accept the offer of refinance from the borrower in full settlement of the amounts owed by it, Lendy will be bringing additional claims to recover the balance of capital, accrued interest and bonus accrual to increase the return to investors which our legal advisors have confirmed have good prospects of success.
Whilst we cannot confirm the specific action that will be taken on this matter should investors choose to accept the refinance offered from the borrower, we attach below a link to Lendy’s Collections and Recoveries policy which will hopefully provide a general insight into the types of action which may be taken.
Collections & Recoveries Policy
In the event that Lendy proceed with option 2, recovery action available to Lendy will be progressed to maximise the return of capital, accrued interest and bonus accrual. This would include a claim against the borrower’s personal guarantee (the “PG”). However, we will not be able to truly ascertain the prospect of successfully recovering outstanding capital, accrued interest and bonus accrual until such time as we obtain further information on the guarantor’s updated financial position which has not been made available at this time.
For your information, as per the provision fund policy, any claim against the provision fund will be made only once any possible legal action or claims against any liable third party is assessed, actioned or declined.
Kind regards,
The Lendy Team
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Steerpike
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Post by Steerpike on Jul 19, 2018 9:31:52 GMT
One point I have difficulty with is, if the development is such a lame duck how has the borrower managed to arrange re-finance so easily?
There is sufficient value to pay for another set of valuations, legal work, and upfront fees but not enough to repay more of the debt.
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TonyL
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Post by TonyL on Jul 19, 2018 9:32:49 GMT
For what it's worth, here are some numbers which for me raise serious doubt about the justification for option 1.
Take at face value what Lendy have said that "the updated valuation indicates a realisable value lower than the original loan amount" - which we can take to be £13m (original stated 65% of £20m valuation).
BUT, for the borrower to be able to pay £11m to Lendy they must be borrowing against at least a £15.7m valuation (at 70%) in order to raise that £11m cash. They obviously also need further funds to continue the development, assume that to be a further £1m cash, so their new borrowing must be against a valuation of £17.2m (again assuming 70%).
So their is either another set of gullible mugs lenders who haven't checked their valuation of £17.2m, or we are being lied to again that the valuation is only £13m. This discrepency should be explained before anyone blindly accepts option 1.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 19, 2018 9:39:53 GMT
What if The Borrower is The Customer/Client douganole?
Investors only provide the money.
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averageguy
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Post by averageguy on Jul 19, 2018 9:44:28 GMT
Response received to my Support Ticket question below.Time for a possible rethink about Option A... Jul 17, 20:50 BST Regarding the DFL004 vote, there is some critical information missing from the lender vote description of Option A: 1) Under this option, is Lendy proposing no further recovery action against the borrower, the original valuer or any other party? 2) If the answer to 1 is “no action proposed”, will a claim therefore be made against the Providion Fund for the value of the capital loss? How can lenders reasonably be asked to vote without knowing this? Support Team 1 (Lendy Ltd) Jul 19, 08:58 BST Hi Steve, Thank you for your recent enquiries in relation to the investor vote launched on DFL004 (S****** Factory, Wolverhampton). As you are aware, we are restricted in the information which we are able to release to you in relation to the loan as a result of the risk of waiving Lendy’s legal professional privilege and the adverse consequences this would have on potential claims which exist to recover the outstanding capital balance, accrued interest and bonus accrual. Insolvency and restructuring experts appointed by Lendy following expiry of the loan have advised that, even following the completion of the build, the sale proceeds from the security property will be insufficient to repay the capital invested. Should investors therefore choose to proceed with option 1 and accept the offer of refinance from the borrower in full settlement of the amounts owed by it, Lendy will be bringing additional claims to recover the balance of capital, accrued interest and bonus accrual to increase the return to investors which our legal advisors have confirmed have good prospects of success. Whilst we cannot confirm the specific action that will be taken on this matter should investors choose to accept the refinance offered from the borrower, we attach below a link to Lendy’s Collections and Recoveries policy which will hopefully provide a general insight into the types of action which may be taken. Collections & Recoveries Policy In the event that Lendy proceed with option 2, recovery action available to Lendy will be progressed to maximise the return of capital, accrued interest and bonus accrual. This would include a claim against the borrower’s personal guarantee (the “PG”). However, we will not be able to truly ascertain the prospect of successfully recovering outstanding capital, accrued interest and bonus accrual until such time as we obtain further information on the guarantor’s updated financial position which has not been made available at this time. For your information, as per the provision fund policy, any claim against the provision fund will be made only once any possible legal action or claims against any liable third party is assessed, actioned or declined. Kind regards, The Lendy Team Unusually 'prompt' response
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Post by harryvederci on Jul 19, 2018 9:46:03 GMT
For what it's worth, here are some numbers which for me raise serious doubt about the justification for option 1. Take at face value what Lendy have said that "the updated valuation indicates a realisable value lower than the original loan amount" - which we can take to be £13m (original stated 65% of £20m valuation). BUT, for the borrower to be able to pay £11m to Lendy they must be borrowing against at least a £15.7m valuation (at 70%) in order to raise that £11m cash. They obviously also need further funds to continue the development, assume that to be a further £1m cash, so their new borrowing must be against a valuation of £17.2m (again assuming 70%). So their is either another set of gullible mugs lenders who haven't checked their valuation of £17.2m, or we are being lied to again that the valuation is only £13m. This discrepency should be explained before anyone blindly accepts option 1. assume the borrower will also be paying rolled up interest at say 12% pa + fees say 18% in total on the new lender facility which implies a 'new valuation' as it currently stands closer to £18m
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Post by brummiefred on Jul 19, 2018 9:47:16 GMT
Different questions asked.....................same reply to all!!!
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Post by rebull on Jul 19, 2018 9:57:18 GMT
Maybe Wolverhampton council have got involved, they do seem keen on geting the development completed.
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SteveT
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Post by SteveT on Jul 19, 2018 9:57:24 GMT
Different questions asked.....................same reply to all!!! By omitting so much critical information from the original explanation, Lendy risk really botching up this vote!
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copacetic
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Post by copacetic on Jul 19, 2018 10:00:01 GMT
"Should investors therefore choose to proceed with option 1 and accept the offer of refinance from the borrower in full settlement of the amounts owed by it, Lendy will be bringing additional claims to recover the balance of capital, accrued interest and bonus accrual to increase the return to investors which our legal advisors have confirmed have good prospects of success." - Lendy
Is this not contradictory? This clarification leaves me less certain of what option 1 actually means.
I originally read option 1 as being
(i)
-Payment of £11m now effectively guaranteed by the refinancing company.
-Payment of £1m in a year secured by second charge and PG (not guaranteed but the borrower may have some assets so there is the possibility we see some of it) -No further recourse as this is agreed to be a Full and Final Settlement.
This clarification seems to mean (ii) -Payment of £11m now effectively guaranteed by the refinancing company. -Payment of £1m in a year secured by second charge and PG (not guaranteed but the borrower may have some assets so there is the possibility we see some of it) (why specify £1m - is this the refinance co offering it or is there some other asset being sold to cover this payment?)
-Pursuit of the borrower for all his assets and possible bankruptcy if he fails to settle for the remainder of the debt
These are two different things and (ii) might be an ok deal. My main objection to (i) was the apparent limiting of his PG to £1m which leaves the borrower laughing all the way to the bank.
If (ii) really applies then website vote text needs to be updated to clarify this. You may not be able to post everything due to legal privilege but unless you're trying to trick the borrower into paying the £11m and £1m for what isn't actually a full and final settlement you can at least unambiguously describe the deal on the table you have brokered for lenders.
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SteveT
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Post by SteveT on Jul 19, 2018 10:09:19 GMT
I presume the only “additional claims” would be against the valuer, and possibly the IMS, not the borrower (provided he stumps up the final £1m)
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Post by p2plender on Jul 19, 2018 10:30:38 GMT
The big question is..............
Nobody will have lost a penny for another year if option 1 wins the day. I hate to think how many years with option 2....
Lendy the property platform, more like Lendy the joke platform.
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Post by douganole on Jul 19, 2018 10:44:31 GMT
What if The Borrower is The Customer/Client douganole? Investors only provide the money. I have just contacted the FCA by email for clarification (not telephone as I would like to have my query, and hopefully their reply, in hard copy). I'll post any meaningful reply on here.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 19, 2018 10:55:25 GMT
What if The Borrower is The Customer/Client douganole? Investors only provide the money. I have just contacted the FCA by email for clarification ( not telephone as I would like to have my query, and hopefully their reply, in hard copy). I'll post any meaningful reply on here. You are definitely a wo/man after my own heart. Trust no-one!
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averageguy
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Post by averageguy on Jul 19, 2018 10:58:49 GMT
This is all a cunning plan by Lendy to distract everyone from the troubles of a certain tall building in Liverpool and a couple of sites in Exeter etc
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