ReBS Recovery T&Cs April 2016, Legal Fees PDF, Notes, Links.
Mar 21, 2017 10:30:47 GMT
stub8535 likes this
Post by Deleted on Mar 21, 2017 10:30:47 GMT
In a bid to create a fuller, broader understanding.
Unabridged the relevant section from ReBS's T&C's April 2016:
22. Security and the role of Ameuri Limited as security trustee
22.1. Where a Borrower has agreed to secure a Loan the type of Security offered which will be detailed on the Website, on the listing page and the Loan Agreement, in particular the Loan Particulars and Special Conditions.
22.2. In such Loans where it is indicated that Security over the loan is provided, the Borrower’s obligations under the Loan Agreement to you will be secured by an all assets security contract, or in some cases a chattels mortgage, a personal guarantee or a legal mortgage. Should a Borrower default on a Loan, fail to honour their material obligations of the Loan Agreement or fail to make a repayment, the Borrower and Lender agrees to us appointing Ameuri Limited (AL), as the security trustee to enforce the Security constituted by the all assets security contract and/or chattels mortgage. AL is a separate wholly-owned subsidiary of rebuildingsociety.com Ltd.
22.3. In the event of the events described in 22.2 coming about, the Lender and the Borrower agree to AL representing the Borrowers interest as security trustee in respect of any of the Borrower’s liabilities to you as the Lender under the Loan Agreement. In such an event all communication with a Borrower will be made through AL.
22.4. Should we or AL be provided with particular information detailing the assets of the relevant Borrower, we and AL may at their discretion provide this information to you as a Lender.
22.5. In the event of that AL needs to execute any form of personal guarantee provided by the Borrowers’ directors, on your behalf, you consent to us appointing AL as the Security Trustee to enforce the personal guarantee in order to recover the debt on your behalf. You fully accept that AL’s ability to enforce such a personal guarantee is subject to the legal risks and restrictions associated with such a recovery. Furthermore, you accept that it is not the responsibility of rebuildingsociety.com Ltd to verify that the guarantor has sought independent legal advice on the impact of providing a personal guarantee in respect of a borrower’s loan. Personal guarantees may be subject to challenges in such situations where the individual permitting the guarantee has been subjected to undue duress or misguidance from a third party.
22.6. If it becomes necessary to enforce the Security, you agree that AL may act on your behalf as your agent to enforce the Security with the aim of recovering money equal to the borrower’s liability to the Lender under each Loan.
22.7. AL will hold the assets charged under the `Security Instruments upon trust for itself and for all Lenders to that Borrower (including you) and will have the rights as set out in the Security Instrument.
22.8. A Security Instrument granted by a borrower may be security for more than one Loan.
22.9. Where monies recovered are not sufficient to repay all of the Lenders, the net proceeds recovered (after deduction of charges) will be shared between the Lenders on a pro-rata basis.
22.10. The AL will hold the assets charged under any security upon trust for itself and for all lenders to that borrower. From time to time AL may perform (before or after any enforcement under the terms of the security) all obligations, rights and benefits given to AL by any all assets security agreement, assignments, legal mortgage and/or chattels mortgage and by any future security that AL may take in respect of the debt due under the loan or under any document entered into pursuant to such all assets security agreement, assignments, legal mortgage, chattels mortgage and/or future security. AL shall have certain powers and discretions conferred upon trustees and may also rely on:
22.10.1. any representation, notice or document believed by it to be genuine correct and appropriately authorised and;
22.10.2. any statement made by any director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
22.11. We do not guarantee (nor does AL) that by having Security a Lender will recover all of the money that you have loaned to the Borrower. In the event that enforcement action is taken to enforce repayment of the Loan, it is possible that a Lender will not recover all of the money which is owed to them by the Borrower.
22.12. Each Lender agrees that AL shall be entitled to be paid, out of the proceeds of any recovery under the Debenture, an amount equal to its reasonable costs (including legal and other professional costs) incurred by AL in taking action to pursue repayment of the loan following a default. Costs may include (but are not limited to) enforcing the terms of the Debenture or in complying with any instructions from any Lender in connection with the Debenture.
23. Missed repayments
– Important Please Read
23.1. If the Borrower fails to make a full repayment (including interest) to a Lender, we shall within reason, repeatedly contact the Borrower to ask them to pay the overdue amount immediately. If our reattempt to collect the funds fails beyond 1 working days after the payment was due, the borrower’s account will be treated as an overdue account and we will continue to attempt to collect the funds.
23.2. If payment has still not been made 5 days from the date payment was due, rebuildingsociety.com may implement an administration fee of up to 15% of the missed payment amount. This fee will be immediately payable and is in addition to the repayment amount due.
23.3. Where rebuildingsociety.com incurs additional costs in recovering a repayment on behalf of the lenders, the Borrower will also be liable to cover these fees.
23.4. If the Borrower, misses, fails to pay partially or in full, one or more consecutive monthly instalments or four out of six consecutive monthly instalments, or is found to be in breach of the Site Terms and Conditions, Security Instrument or Loan Agreement, they may be deemed to be in default. When a loan is deemed to be in Default, we will notify the Borrower and relevant Guarantors of the Default and begin pursuing the total loan amount outstanding.
23.5. In addition to 23.1 and 23.4 above, rebuildingsociety.com will, where it deems necessary and in the best interest of recovering the amount owing to the lenders demand immediate repayment of the loan amount outstanding including all outstanding accrued interest and costs incurred. This clause is likely only to be implemented where rebuildingsociety.com no longer enjoys the cooperation of the Borrower and believes the loan to be at risk and justifies the action ahead of the above proposed schedule. Rebuildingsociety.com will at all times attempt to act in the best interests of both the Lenders and the Borrowers, but will ultimately seek to protect the interest of the outstanding amount owed to Lenders.
23.6. Following 23.1 we may refer the missed repayment to a collections agency (‘the Collections Agency’) who will attempt to collect the money on behalf of the lenders, (‘Collection Agency Fee’). The Collections Agent may deduct up to 30% of the amount they recover from the borrower and the remaining proceeds will be distributed to lenders; where reasonably possible this fee will be added to the amount owed by the Borrower so as not to not reduce the amount available for distribution to lenders.
23.7. We will use best endeavours to keep you up to date with the progress of any efforts to collect missed payments, or collect on defaulted debt, which can be viewed under the My Account section of the Website.
23.8. Where a loan is placed in default, we will notify you of this, and inform you that all your outstanding Loan Segments will need to be transferred to AL to allow legal proceedings to commence. You will have 7 days in which to opt out of this transfer should you decide to pursue the Borrower for the debt directly.
23.9.In circumstances where the relevant Loan is secured, AL will be entitled (but shall not be obliged) to take such reasonable steps are it is entitled to take as Security Trustee under the Security Instrument.
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
Notes:
A basic 30% fee as stipulated by ReBS's T&C's above + Associated 3rd party Legal and Recovery fees, on a 50 K defaulted loan secured by only a PG it is possible that lenders may receive a low to zero dividend yet depending on the asset net worth of the Guarantor any eventual dividend could be higher.
M****** & S**'* Ltd had an asset rich Guarantor so the dividend to lenders was quite high.
Conversely with H***** D*********** Ltd the negotiated £10 K settlement figure (Voted upon and accepted by lenders) was reduced by the 30% fee + legal costs resulting in a low £0.1377 dividend to lenders.
All things considered this may augur poorly for lenders who find their funds defaulted particularly where a minimal £worth PG's has been offered as security against a collective loan to a Borrower, these type securities are based on a Promise and lenders are considered as unsecured joining all other unsecured creditors, behind a secured creditor eg a Bank.
In a 2nd, 3rd, 4th Ranking Property charges the 1st charge holder eg a Bank is under no obligation whatever to consider the financial interests of any 2nd or 3rd, 4th charge security holders, the Bank may sell quickly with their Only aim to recoup their own capital, Receivership and legal costs by way and to illustrate this looks to have happened in the case of P****** T******* Ltd.
Quoting Michael's Lender update: 22/02/2017:
"With regard to our action against the company, the property owned by the company over which we held a second priority legal charge has been sold.
A sale has been agreed for this property for £160,000. Therefore, there will not be any sums due to us as a second ranking charge holder as the debt owed to the first charge holder exceeds the purchase price. This is a very disappointing development and sees the second charge as a potential avenue for recovery close. The property was purchased for approximately £227,500 by the debtor in Dec 2013. The large deduction in equity resulted in the sale price being so far below this that after accounting for the liquidator’s costs and sale fees, there was insufficient equity remaining to settle the first charge holder’s debt. Whilst we will be investigating the sale to confirm that it was in accordance with current market conditions and does not constitute a sale at undervalue, as the liquidator is tasked with achieving the best sale price currently available (and is not required to, for example, wait for years to achieve a better sale price when market conditions may have improved), it seems likely that this was an unfortunate consequence of a property sale during liquidation rather than anything which would leave open potential recourse as a charge holder."
ReBS have been left chasing a Bankrupt with zero equity from a property sale to rely upon just to recover enough to meet their 30% fee + Legal costs before beginning to pay lenders a dividend.
The longer or more complex a recovery becomes then the Legal costs will rise potentially reducing the value of any eventual dividend to lenders. As stated above in ReBS T&C's during the recovery process ReBS will always endevour to recover it's 30% fee + Legal costs over and above the value of the debt principle + accrued interest, this might not always be possible because there may be insufficient assets available or left over for any creditor including ReBS to pursue.
Bankruptcy for the Borrower, Insufficient funds to meet ReBS fees or Legal costs and a zero dividend to lenders.
Lose, Lose, Lose for everyone, leaving ReBS to meet the Legal bill from either their own cash reserves or from income and lenders with nowt.
Debt recovery can often be an expensive, protracted thankless, frustrating task one sometimes running into years as every avenue to locating then recovering funds is pursued.
Yes sometimes Years with variable degree's of success.
Please take time to Google and gen up on all the various types of Security which can be offered by a prospective Business related Borrower, aim to become familiar with all of these and Personal Guarantee Insurance (PGI).
a) PDF purely for illustrative purposes Corporate debt Legal fee's:
FULL CF compressed.pdf (175.5 KB)
b) Links to generic, publicly available resource materials/sector by sector data/reports/survival statistical data relating to SME's:
p2pindependentforum.com/post/179615
p2pindependentforum.com/post/179615/thread
Unabridged the relevant section from ReBS's T&C's April 2016:
22. Security and the role of Ameuri Limited as security trustee
22.1. Where a Borrower has agreed to secure a Loan the type of Security offered which will be detailed on the Website, on the listing page and the Loan Agreement, in particular the Loan Particulars and Special Conditions.
22.2. In such Loans where it is indicated that Security over the loan is provided, the Borrower’s obligations under the Loan Agreement to you will be secured by an all assets security contract, or in some cases a chattels mortgage, a personal guarantee or a legal mortgage. Should a Borrower default on a Loan, fail to honour their material obligations of the Loan Agreement or fail to make a repayment, the Borrower and Lender agrees to us appointing Ameuri Limited (AL), as the security trustee to enforce the Security constituted by the all assets security contract and/or chattels mortgage. AL is a separate wholly-owned subsidiary of rebuildingsociety.com Ltd.
22.3. In the event of the events described in 22.2 coming about, the Lender and the Borrower agree to AL representing the Borrowers interest as security trustee in respect of any of the Borrower’s liabilities to you as the Lender under the Loan Agreement. In such an event all communication with a Borrower will be made through AL.
22.4. Should we or AL be provided with particular information detailing the assets of the relevant Borrower, we and AL may at their discretion provide this information to you as a Lender.
22.5. In the event of that AL needs to execute any form of personal guarantee provided by the Borrowers’ directors, on your behalf, you consent to us appointing AL as the Security Trustee to enforce the personal guarantee in order to recover the debt on your behalf. You fully accept that AL’s ability to enforce such a personal guarantee is subject to the legal risks and restrictions associated with such a recovery. Furthermore, you accept that it is not the responsibility of rebuildingsociety.com Ltd to verify that the guarantor has sought independent legal advice on the impact of providing a personal guarantee in respect of a borrower’s loan. Personal guarantees may be subject to challenges in such situations where the individual permitting the guarantee has been subjected to undue duress or misguidance from a third party.
22.6. If it becomes necessary to enforce the Security, you agree that AL may act on your behalf as your agent to enforce the Security with the aim of recovering money equal to the borrower’s liability to the Lender under each Loan.
22.7. AL will hold the assets charged under the `Security Instruments upon trust for itself and for all Lenders to that Borrower (including you) and will have the rights as set out in the Security Instrument.
22.8. A Security Instrument granted by a borrower may be security for more than one Loan.
22.9. Where monies recovered are not sufficient to repay all of the Lenders, the net proceeds recovered (after deduction of charges) will be shared between the Lenders on a pro-rata basis.
22.10. The AL will hold the assets charged under any security upon trust for itself and for all lenders to that borrower. From time to time AL may perform (before or after any enforcement under the terms of the security) all obligations, rights and benefits given to AL by any all assets security agreement, assignments, legal mortgage and/or chattels mortgage and by any future security that AL may take in respect of the debt due under the loan or under any document entered into pursuant to such all assets security agreement, assignments, legal mortgage, chattels mortgage and/or future security. AL shall have certain powers and discretions conferred upon trustees and may also rely on:
22.10.1. any representation, notice or document believed by it to be genuine correct and appropriately authorised and;
22.10.2. any statement made by any director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
22.11. We do not guarantee (nor does AL) that by having Security a Lender will recover all of the money that you have loaned to the Borrower. In the event that enforcement action is taken to enforce repayment of the Loan, it is possible that a Lender will not recover all of the money which is owed to them by the Borrower.
22.12. Each Lender agrees that AL shall be entitled to be paid, out of the proceeds of any recovery under the Debenture, an amount equal to its reasonable costs (including legal and other professional costs) incurred by AL in taking action to pursue repayment of the loan following a default. Costs may include (but are not limited to) enforcing the terms of the Debenture or in complying with any instructions from any Lender in connection with the Debenture.
23. Missed repayments
– Important Please Read
23.1. If the Borrower fails to make a full repayment (including interest) to a Lender, we shall within reason, repeatedly contact the Borrower to ask them to pay the overdue amount immediately. If our reattempt to collect the funds fails beyond 1 working days after the payment was due, the borrower’s account will be treated as an overdue account and we will continue to attempt to collect the funds.
23.2. If payment has still not been made 5 days from the date payment was due, rebuildingsociety.com may implement an administration fee of up to 15% of the missed payment amount. This fee will be immediately payable and is in addition to the repayment amount due.
23.3. Where rebuildingsociety.com incurs additional costs in recovering a repayment on behalf of the lenders, the Borrower will also be liable to cover these fees.
23.4. If the Borrower, misses, fails to pay partially or in full, one or more consecutive monthly instalments or four out of six consecutive monthly instalments, or is found to be in breach of the Site Terms and Conditions, Security Instrument or Loan Agreement, they may be deemed to be in default. When a loan is deemed to be in Default, we will notify the Borrower and relevant Guarantors of the Default and begin pursuing the total loan amount outstanding.
23.5. In addition to 23.1 and 23.4 above, rebuildingsociety.com will, where it deems necessary and in the best interest of recovering the amount owing to the lenders demand immediate repayment of the loan amount outstanding including all outstanding accrued interest and costs incurred. This clause is likely only to be implemented where rebuildingsociety.com no longer enjoys the cooperation of the Borrower and believes the loan to be at risk and justifies the action ahead of the above proposed schedule. Rebuildingsociety.com will at all times attempt to act in the best interests of both the Lenders and the Borrowers, but will ultimately seek to protect the interest of the outstanding amount owed to Lenders.
23.6. Following 23.1 we may refer the missed repayment to a collections agency (‘the Collections Agency’) who will attempt to collect the money on behalf of the lenders, (‘Collection Agency Fee’). The Collections Agent may deduct up to 30% of the amount they recover from the borrower and the remaining proceeds will be distributed to lenders; where reasonably possible this fee will be added to the amount owed by the Borrower so as not to not reduce the amount available for distribution to lenders.
23.7. We will use best endeavours to keep you up to date with the progress of any efforts to collect missed payments, or collect on defaulted debt, which can be viewed under the My Account section of the Website.
23.8. Where a loan is placed in default, we will notify you of this, and inform you that all your outstanding Loan Segments will need to be transferred to AL to allow legal proceedings to commence. You will have 7 days in which to opt out of this transfer should you decide to pursue the Borrower for the debt directly.
23.9.In circumstances where the relevant Loan is secured, AL will be entitled (but shall not be obliged) to take such reasonable steps are it is entitled to take as Security Trustee under the Security Instrument.
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
Notes:
A basic 30% fee as stipulated by ReBS's T&C's above + Associated 3rd party Legal and Recovery fees, on a 50 K defaulted loan secured by only a PG it is possible that lenders may receive a low to zero dividend yet depending on the asset net worth of the Guarantor any eventual dividend could be higher.
M****** & S**'* Ltd had an asset rich Guarantor so the dividend to lenders was quite high.
Conversely with H***** D*********** Ltd the negotiated £10 K settlement figure (Voted upon and accepted by lenders) was reduced by the 30% fee + legal costs resulting in a low £0.1377 dividend to lenders.
All things considered this may augur poorly for lenders who find their funds defaulted particularly where a minimal £worth PG's has been offered as security against a collective loan to a Borrower, these type securities are based on a Promise and lenders are considered as unsecured joining all other unsecured creditors, behind a secured creditor eg a Bank.
In a 2nd, 3rd, 4th Ranking Property charges the 1st charge holder eg a Bank is under no obligation whatever to consider the financial interests of any 2nd or 3rd, 4th charge security holders, the Bank may sell quickly with their Only aim to recoup their own capital, Receivership and legal costs by way and to illustrate this looks to have happened in the case of P****** T******* Ltd.
Quoting Michael's Lender update: 22/02/2017:
"With regard to our action against the company, the property owned by the company over which we held a second priority legal charge has been sold.
A sale has been agreed for this property for £160,000. Therefore, there will not be any sums due to us as a second ranking charge holder as the debt owed to the first charge holder exceeds the purchase price. This is a very disappointing development and sees the second charge as a potential avenue for recovery close. The property was purchased for approximately £227,500 by the debtor in Dec 2013. The large deduction in equity resulted in the sale price being so far below this that after accounting for the liquidator’s costs and sale fees, there was insufficient equity remaining to settle the first charge holder’s debt. Whilst we will be investigating the sale to confirm that it was in accordance with current market conditions and does not constitute a sale at undervalue, as the liquidator is tasked with achieving the best sale price currently available (and is not required to, for example, wait for years to achieve a better sale price when market conditions may have improved), it seems likely that this was an unfortunate consequence of a property sale during liquidation rather than anything which would leave open potential recourse as a charge holder."
ReBS have been left chasing a Bankrupt with zero equity from a property sale to rely upon just to recover enough to meet their 30% fee + Legal costs before beginning to pay lenders a dividend.
The longer or more complex a recovery becomes then the Legal costs will rise potentially reducing the value of any eventual dividend to lenders. As stated above in ReBS T&C's during the recovery process ReBS will always endevour to recover it's 30% fee + Legal costs over and above the value of the debt principle + accrued interest, this might not always be possible because there may be insufficient assets available or left over for any creditor including ReBS to pursue.
Bankruptcy for the Borrower, Insufficient funds to meet ReBS fees or Legal costs and a zero dividend to lenders.
Lose, Lose, Lose for everyone, leaving ReBS to meet the Legal bill from either their own cash reserves or from income and lenders with nowt.
Debt recovery can often be an expensive, protracted thankless, frustrating task one sometimes running into years as every avenue to locating then recovering funds is pursued.
Yes sometimes Years with variable degree's of success.
Please take time to Google and gen up on all the various types of Security which can be offered by a prospective Business related Borrower, aim to become familiar with all of these and Personal Guarantee Insurance (PGI).
a) PDF purely for illustrative purposes Corporate debt Legal fee's:
FULL CF compressed.pdf (175.5 KB)
b) Links to generic, publicly available resource materials/sector by sector data/reports/survival statistical data relating to SME's:
p2pindependentforum.com/post/179615
p2pindependentforum.com/post/179615/thread
