PBL167 Pickering Holiday Cottages DEFAULT Part Recovery

A few days ago, I asked Lendy where they had told potential investors of this significant requirement of the loan agreement.  I received a response from George today...
How's that for keeping investors informed?

I really can't imagine that the FCA would consider withholding such information to be an appropriate practice!

On a popular site for sale at 2.25m - at the asking price it's a c.85% recovery.  Valuation report put a 90day sale value of 3.442m

I've got 4 figures in this. Interestingly the administration report at company’s house lists the "anticipated future realisation" of the fixed assets as £2,000,000 with an "anticipated distribution" of £1,742,600 to Lendy.

Key points from the report:

2.7 "for the development to be viable, it required the purchase of the additional land" (ie 50 acres that were not included in the sale)
2.4 "the company originally hoped to purchase additional land adjacent to the farm, however the funding available to the company was not sufficient"

- Clearly the project was doomed to failure from the beginning then if the additional land couldn’t be purchased.

3.1 “The second tranche of funds loaned by Lendy was based on a formal independent valuation carried out in Feb 2017 … the site was valued at £4,590,000 and £3,442,000 on a 90 day sale. This however was based on the property being freehold and included the additional land”

- The valuation report was produced assuming access to the additional land. It was therefore never accurate to produce a 90 day sale and another valuation should have been carried out.

6.7 The total amount due to Lendy as of the date of the report (12/4/18) was £3,076,504.
- This includes a nice whack of Lendy fees

The valuation included the extra 50 acres that were never part of the site. In the loan particulars Lendy states:

"The total site comprises 82.5 acres, c 50 acres of which are being retained by the vendor (the value of our security has been reduced by £250,000 to reflect this)."

There is no indication as to how this £250,000 was calculated and the lack of additional land was not used by the surveyor to formulate the 90-day distressed sale figure.

Something has gone seriously wrong if the opinion of the Administrators is to be believed "for the development to be viable, it required the purchase of the additional land". Had the surveyor been made aware of the actual site that needed to be valued I suspect we would have had different figures and maybe a different opinion on its suitability for security.

Have I got anything incorrect here Lendy Support Paul64 ?

But the money raised and the LTV used was based on the property including the land.  Therefore if the land was not included in the deal then Lendy should have reissued a new valuation, not to do so is tantamount to serious misrepresentation. 

I find this deeply problematic we put our money in, based upon the valuation of the property with the land included not without the land.