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 Sept 22, 2023 21:49:46 GMT
Small matter of their debts which are why they are in insolvency in the first place ... FS has very little income, the deductions are to cover costs ... difficult to see true picture as missing info in last set of admin accounts In the initial Administrators' Proposals, "trade and expense creditors" totalled £434k. I would guess some of this had/has to be paid keep the administration going. The JC Starr debt is its own thing and (potentially) being taken from lenders' funds not FS'. The other debts are RK and friends, which has nothing to do with the running of the administration, and should just join the creditor queue at the end of the administration.
Very little income? Just from a couple of my loans that finally settled recently, they took over £130k in 'settlement' and 'expense contribution' fees. Across the whole loan book this will seemingly total millions. So back to my question above, are the costs really going to come to that much? Or are CG building a nice pot for creditors?
Starting from the beginning ... on the basis that this loan was sold as a first charge then lenders would have a potential claim against FS ... FS are insolvent & in administration so any claim would merely be as an unsecured creditor. They would join the other unsecured creditors ... the trade & expense creditors (now £900k) (nothing to do with the administration running, they predate it) and rank behind the £3m owed to RK et al, who are secured creditors. So FS is bust until it finds £3.9m plus to pay its debts (without Starr) plaus potentially all the lenders shortfalls as they are likely to be creditors (Lendy judgement) for that amount. So In the last full set of accounts provided by administrators, there was £400k in the bank, so a bit of a shortfall against there debts. The expense contribution is exactly that, to cover the expenses of the administrators in the administration, running FS & recovering the loans (£3m) ... the lack of income is clear from the fact that the CC granted the expense contribution ... I think the settlement fees only apply to loans settled by agreement not recovery so wont apply to most loans (happy to be corrected on that) so isnt a large source of income. So yeah they are likely still bust ... but picture will only be clearer with the next admin report showing the position post restart of distributions/new fee structure
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adrian77
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Post by adrian77 on Sept 23, 2023 11:11:07 GMT
true but in my book this is also fraud/deception and they should be charged with it...
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ilmoro
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Post by ilmoro on Sept 23, 2023 12:43:51 GMT
true but in my book this is also fraud/deception and they should be charged with it... Who? This is based on a post facto legal opinion that re-interprets the loan priority in a different way to how FS likely intended. Where is the fraud or deception? Negligence, mis-selling or incompetence maybe.
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adrian77
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Post by adrian77 on Sept 23, 2023 18:14:46 GMT
you wrote the above in August - QED
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ilmoro
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Post by ilmoro on Sept 23, 2023 23:06:41 GMT
you wrote the above in August - QED Who's you? Not me as I'm not lost or in space ... that said that's negligence or incompetence not fraud so my point stands
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mah
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Post by mah on Sept 24, 2023 13:45:36 GMT
Sept 21, 2023 14:29:29 Brainer said: Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in.
I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc.
What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in.
22 Sep 2023 at 14:46 Brainer said:
Exactly, not to forget all the Legal Costs that went from the Lenders' Pot in the 5% Fee Case - the Legal Costs of both the sides - remember it is / was the Lenders who ultimately are going to pay /paid for the winning side's Fees as well ?
And that Eye-Watering 15.9% or so for the Settlement at 10 - 25 % of the original Valuation / Loan Amount ?
For the Average Lenders, it would have been much better for the FS to keep the 5% rather than the 'Cost of Legal Fees + 5% Expense Contribution".
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adrian77
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Post by adrian77 on Sept 24, 2023 13:50:37 GMT
100% - to me this is all smoke and mirrors - Am I wrong to say the bottom line is that the administrators are going to do well out of this and we lenders badly...
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ilmoro
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Post by ilmoro on Sept 24, 2023 15:37:54 GMT
Sept 21, 2023 14:29:29 Brainer said: Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in.
I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc.
What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in.
22 Sep 2023 at 14:46 Brainer said:
Exactly, not to forget all the Legal Costs that went from the Lenders' Pot in the 5% Fee Case - the Legal Costs of both the sides - remember it is / was the Lenders who ultimately are going to pay /paid for the winning side's Fees as well ?
And that Eye-Watering 15.9% or so for the Settlement at 10 - 25 % of the original Valuation / Loan Amount ?
For the Average Lenders, it would have been much better for the FS to keep the 5% rather than the 'Cost of Legal Fees + 5% Expense Contribution".
The legal costs for the directions hearing in relation to the 5% are paid from the general estate. The 5% expense contribution is less than the previous 5% as it is on the basis of net realisation rather than loan value. The previous waterfall was clearly not better for the lenders.
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ilmoro
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Post by ilmoro on Sept 24, 2023 15:44:02 GMT
100% - to me this is all smoke and mirrors - Am I wrong to say the bottom line is that the administrators are going to do well out of this and we lenders badly... Everything is smoke & mirrors if you dont understand it ... the bottom line is that no one will likely do very well out of this mess (unless they have minimal exposure), mainly because the loan book was mostly rubbish and realisations are poor.
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Brainer
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Post by Brainer on Sept 25, 2023 16:06:11 GMT
Starting from the beginning ... on the basis that this loan was sold as a first charge then lenders would have a potential claim against FS ... FS are insolvent & in administration so any claim would merely be as an unsecured creditor. They would join the other unsecured creditors ... the trade & expense creditors (now £900k) (nothing to do with the administration running, they predate it) and rank behind the £3m owed to RK et al, who are secured creditors. So FS is bust until it finds £3.9m plus to pay its debts (without Starr) plaus potentially all the lenders shortfalls as they are likely to be creditors (Lendy judgement) for that amount. My comments weren't related to the situation with this loan, so I don't disagree with this. And yes, they are 'bust' in the technical definition of insolvent. But they don't appear to be 'bust' in the more common understanding of having no money, given the fees they are pulling in.
This had crossed my mind given the CC have greater insight into the accounts than I do, which is why I asked the question of what exactly is costing so much to run the administration when from the outside it appears almost all the costs of recovering the loans (inc. CG's fee) come straight out of the loan recoveries themselves. And the bold part is my fear. If the CC decided an extra fee is needed to be taken from loan recoveries to keep the administration running, then that's best for all. But if these voluntary extra fees and CG's 'creative' interpretation of the T&Cs for this made-up settlement fee is effectively just building a pot for RK and friends, then I'm a lot less okay with that. They appear to be taking the settlement fee on any loan where there is any sort of repayment other than sale of the security, including when it is on top of the sale of (part of) the security:
E.g. 100% of total recovery is via settlement - they take a settlement fee. E.g. (some) security sold is 90% of total recovery, borrower payment 10% - they take a settlement fee.
E.g. security sold is 100% of the total recovery - they don't take a settlement fee. Some real examples:
F*rd Street
£425k settlement, net after legal etc. fees £377k. Settlement fee: £47.1k.
Meir, Stoke on Trent
£269k settlement, net after legal etc. fees £245.2k. Settlement fee: £35.67k.
Powerboats
£340k settlement, net after legal etc. fees £304.9k. Settlement fee: £65k. Expense contribution: £15.2k.
Augh, Co. Tyrone
2 pieces of security, one sold for £292k and repaid back in 2020 but CG held on to the funds.
CG allowed the borrower to settle the remaining debt for £87.7k rather than force a sale of remaining security.
£292k sale, £87.7k settlement, net after legal etc. fees £358.5k. Settlement fee: £37.1k. Expense contribution: £17.9k.
B*resford Road
2 pieces of security, one sold for £500k and repaid back in 2021 minus the incorrectly taken £29.1k 5% fee (some given back recently). CG allowed the borrower to settle the remaining debt for £85k rather than force a sale of remaining security.
£85k settlement, net after legal etc. fees £73.5k. Settlement fee: £27.8k. Expense contribution: £3.6k. ------ So that's ~£213k of settlement fees, £36.7k in expense contributions, and £29.1k (minus a bit) in the 5% fee. Those are just 5 loans I was in where there was a settlement fee, I don't know how many other loans it has been applied to. They represent only £1.91m of £49.4m of gross loan recoveries so far (3.8%). Add in the 5% fee from other loans, which they have now been mostly allowed to keep. Whilst not directly proportional, CG's ~2.5% fee has now amounted to £883k (as per recent report), for some sort of comparison. Add in a handful of loans that have paid back in full and FS have legitimately received their fees. Add in £71.9k in bank interest (as per recent report). Add in £87.79k from Luxmore (as per recent report). Starts to add up.
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mah
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Post by mah on Sept 30, 2023 10:50:10 GMT
Sept 21, 2023 14:29:29 Brainer said:
22 Sep 2023 at 14:46 Brainer said:
Exactly, not to forget all the Legal Costs that went from the Lenders' Pot in the 5% Fee Case - the Legal Costs of both the sides - remember it is / was the Lenders who ultimately are going to pay /paid for the winning side's Fees as well ?
And that Eye-Watering 15.9% or so for the Settlement at 10 - 25 % of the original Valuation / Loan Amount ?
For the Average Lenders, it would have been much better for the FS to keep the 5% rather than the 'Cost of Legal Fees + 5% Expense Contribution".
The legal costs for the directions hearing in relation to the 5% are paid from the general estate. The 5% expense contribution is less than the previous 5% as it is on the basis of net realisation rather than loan value. The previous waterfall was clearly not better for the lenders. General Estate is ultimately being funded by the Lenders. Agreed the new 5% expense contrib is better than the previous arbitrary one (where they took whichever suited them best - the total Loan Value or Total Recovery, whichever was higher), but only slightly in the grand scale of things, and probably not any better at all after the Legal costs.
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mah
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Post by mah on Sept 30, 2023 11:01:02 GMT
But if these voluntary extra fees and CG's 'creative' interpretation of the T&Cs for this made-up settlement fee is effectively just building a pot for RK and friends, then I'm a lot less okay with that. They appear to be taking the settlement fee on any loan where there is any sort of repayment other than sale of the security, including when it is on top of the sale of (part of) the security:
E.g. 100% of total recovery is via settlement - they take a settlement fee. E.g. (some) security sold is 90% of total recovery, borrower payment 10% - they take a settlement fee.
E.g. security sold is 100% of the total recovery - they don't take a settlement fee. Some real examples:
F*rd Street
£425k settlement, net after legal etc. fees £377k. Settlement fee: £47.1k.
Meir, Stoke on Trent
£269k settlement, net after legal etc. fees £245.2k. Settlement fee: £35.67k.
Powerboats
£340k settlement, net after legal etc. fees £304.9k. Settlement fee: £65k. Expense contribution: £15.2k.
Augh, Co. Tyrone
2 pieces of security, one sold for £292k and repaid back in 2020 but CG held on to the funds.
CG allowed the borrower to settle the remaining debt for £87.7k rather than force a sale of remaining security.
£292k sale, £87.7k settlement, net after legal etc. fees £358.5k. Settlement fee: £37.1k. Expense contribution: £17.9k.
B*resford Road
2 pieces of security, one sold for £500k and repaid back in 2021 minus the incorrectly taken £29.1k 5% fee (some given back recently). CG allowed the borrower to settle the remaining debt for £85k rather than force a sale of remaining security.
£85k settlement, net after legal etc. fees £73.5k. Settlement fee: £27.8k. Expense contribution: £3.6k. ------ So that's ~£213k of settlement fees, £36.7k in expense contributions, and £29.1k (minus a bit) in the 5% fee. Those are just 5 loans I was in where there was a settlement fee, I don't know how many other loans it has been applied to. They represent only £1.91m of £49.4m of gross loan recoveries so far (3.8%). Add in the 5% fee from other loans, which they have now been mostly allowed to keep. Whilst not directly proportional, CG's ~2.5% fee has now amounted to £883k (as per recent report), for some sort of comparison. Add in a handful of loans that have paid back in full and FS have legitimately received their fees. Add in £71.9k in bank interest (as per recent report). Add in £87.79k from Luxmore (as per recent report). Starts to add up.
And there is a Deafening Silence about this arbitrary Settlement Fee !
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Post by gaspilot on Oct 13, 2023 14:56:17 GMT
It is now 2 months since they said they would keep the matter open for 28 days. What the hell is going on?
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sqh
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Post by sqh on Oct 30, 2023 10:15:49 GMT
The problem has been created by dodgy legal advice.
The legal advisor made an opinion on the Barnoldswick loan and then wasn't prepared to overturn his advice when the facts were explained.
What I find remarkable is that the former Director Nigel Hackett hasn't been asked for his opinion, despite being a consultant for the administrator. I have asked, and his view is that the loan was made as described.
It should be noted that the legal adviser has got everything wrong to date. 1. The 5% fee which was overturned by a Court. 2. The Quistclose claim which hasn't been formally submitted and has not Court directive whatsoever. 3. The Barnsoldswick loan re. loan priority, which could not be made clearer.
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adrian77
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Post by adrian77 on Oct 30, 2023 12:13:45 GMT
I should cocoa!
this borrower is an associate of Stuart D*y etc - is this coincidence - has Carol V had plastic surgery!
We were sold this loan as having a first charge as security - well it hasn't and there is no excuse for that and in my book that is fraud...
Clearly something something is very badly wrong here and with the entire FS loanbook and Hackett has not exactly acted in a professional way here and that is being generous...
My theory is that this lender was a front man for D*y who basically worked with somebody within FS to control the whole loanbook - no idea who that might have been!
Whatever has happened here; the bottom line is that this bloke was given £0.75m of our money and I am unsure just how much we are likely to get back
What the hell is dificult in taking a first charge on an expensive farmhouse and realising the asset if the loan is not repaid? Anwer nothing unless of course the legal advice was not "properly taken" for whatever reason
Why the hell the police are not investigating this is beyond me...
I need a drink and a metaphorical cat to kick
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