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Post by memy on Nov 29, 2020 21:16:37 GMT
In the meantime, the contractors selected to deliver this project has gone bust... I assume you are aware that the borrower is on paper no longer controlled by the previous ultimate owner of the share purchaser, Mr H, but is now owned by a different ultimate owner, Mr J, a long time collaborator of a Mr T & P****s*** Dev. PSD have numerous failed developments in Liverpool. If Mr H is still involved he currently appears to be distracted by a somewhat complicated scheme to purchase another PSD scheme in Newcastle UL, seemingly at the expense of flat purchasers. I assume the deposits are not held in escrow by solicitors and thus not available to, or part of, the borrowers accounts You are absolutely right and that is exactly why I think Moneything should force this company into compulsory liquidation. If I were a preferential creditor, this is what I would do.
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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 Nov 29, 2020 23:03:29 GMT
I assume you are aware that the borrower is on paper no longer controlled by the previous ultimate owner of the share purchaser, Mr H, but is now owned by a different ultimate owner, Mr J, a long time collaborator of a Mr T & P****s*** Dev. PSD have numerous failed developments in Liverpool. If Mr H is still involved he currently appears to be distracted by a somewhat complicated scheme to purchase another PSD scheme in Newcastle UL, seemingly at the expense of flat purchasers. I assume the deposits are not held in escrow by solicitors and thus not available to, or part of, the borrowers accounts You are absolutely right and that is exactly why I think Moneything should force this company into compulsory liquidation. If I were a preferential creditor, this is what I would do. From experience administration of these types of scheme is high risk for lenders so it is always worth pursing all avenues for a solvent recovery. The new 'borrower' has paid a lot of interest so has indicated some intent even if minimal substance. In the current climate, particularly in relation to Liverpool development projects, 50% recovery for lenders is probably the best expectation. Im a bit surprised you are advocating it as it usually means wipeout for flat purchasers or substantial additional cost with a still uncertain outcome. I suspect you may get your wish shortly as we appear to be reaching the end game
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Post by memy on Nov 30, 2020 0:24:48 GMT
With all the due respect, I do not understand why you are happy the new 'borrower' has paid a few (not a lot) of interest.
Actually, the money the borrower has paid as interests is just money he is taking out from the money he should pay the lenders in case the company goes into liquidation.
In other words, you are receiving monthly small fractions of the total amount of money you would have received anyway, if Moneything had forced the developer into administration.
In the meantime other creditors have been paid by the developer, reducing the existing amount of money in the company's bank account.
As I said, I might be wrong but, in my view, more you wait, less money you will recoup.
On the other side, you should not be surprised I am advocating the developer's bankruptcy unless you really believe that the existing developer could succeed in refinancing or in finding a buyer.
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criston
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Post by criston on Nov 30, 2020 8:42:17 GMT
With all the due respect, I do not understand why you are happy the new 'borrower' has paid a few (not a lot) of interest. Actually, the money the borrower has paid as interests is just money he is taking out from the money he should pay the lenders in case the company goes into liquidation. In other words, you are receiving monthly small fractions of the total amount of money you would have received anyway, if Moneything had forced the developer into administration. In the meantime other creditors have been paid by the developer, reducing the existing amount of money in the company's bank account. As I said, I might be wrong but, in my view, more you wait, less money you will recoup. On the other side, you should not be surprised I am advocating the developer's bankruptcy unless you really believe that the existing developer could succeed in refinancing or in finding a buyer. There are several here, including me, who agree with you that MT should have gone for the jugular some time ago. As this is an unstarted development, with just land costs, I feel, judging by the figures, lenders would not lose out if the security was called in. However, at this juncture we need to see if anything comes of the current proposal, once again.
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criston
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Post by criston on Nov 30, 2020 13:31:23 GMT
Update
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cedarcourtcapital
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Listening is not the same as understanding
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Post by cedarcourtcapital on Nov 30, 2020 13:50:57 GMT
Trouble is we have heard it all before, many times.
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Post by memy on Nov 30, 2020 21:56:58 GMT
With all the due respect, I do not understand why you are happy the new 'borrower' has paid a few (not a lot) of interest. Actually, the money the borrower has paid as interests is just money he is taking out from the money he should pay the lenders in case the company goes into liquidation. In other words, you are receiving monthly small fractions of the total amount of money you would have received anyway, if Moneything had forced the developer into administration. In the meantime other creditors have been paid by the developer, reducing the existing amount of money in the company's bank account. As I said, I might be wrong but, in my view, more you wait, less money you will recoup. On the other side, you should not be surprised I am advocating the developer's bankruptcy unless you really believe that the existing developer could succeed in refinancing or in finding a buyer. There are several here, including me, who agree with you that MT should have gone for the jugular some time ago. As this is an unstarted development, with just land costs, I feel, judging by the figures, lenders would not lose out if the security was called in. However, at this juncture we need to see if anything comes of the current proposal, once again. I am sorry Criston but I think you are wrong when you say: this is an unstarted development, with just land costs. Beside the fact that, actually, something has been done (demolition of existing buildings, ground works), the previous owners (the borrower) claimed they expended income on fees, comms and running costs. I would imagine that letting agents' comms (guess who is the master agent) and solicitors fees (by the way, the director of the law firm was fined £10,000 by the Solicitors Disciplinary Tribunal after admitting he failed to advise adequately about investing in four high-risk schemes) must have been very high for obvious reasons. In addition to all this, do you think that the "directors" of this company are "working" for free? I would be really interested in knowing the directors salaries. Finally, have a look at The Gazette. In February a petition to wind up the company was heard at the Business and Property Courts in Manchester. The "new owners" paid the creditor to avoid bankruptcy which means less money in the company's bank account. All in all, I think you (lenders) are going to lose out a very big share of your investment and, as I said, I believe that more you wait, more you lose.
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criston
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Post by criston on Nov 30, 2020 22:16:41 GMT
memy. You have misunderstood me. We have only loaned for the land. It's half started developments that have been fully funded & sold off that lose a lot.
Lenders have no control over how MT handle this apart from complaining to them.
All we need is £9k a plot to pay us off.
My earlier calculations as follows -
10520 sqm floor area @ build cost of £1500 sqm. (Valuation suggests £1323 sqm)
Build cost £15,780,000. (Valuation suggests £21,000,000 inclusive of professional fees, extracted from a tendering process)
Finance average over 4 years, £4million to £20 million @ 12% £5.76m, (Valuation suggests £1,278,023 )
Developer profit say 25% of sales value £9.5m (Valuation suggests less at £7,623,650)
2017 Sales value or GDV £38,118,250
Leaves £7 million for the land & any other sundry costs. (Valuation suggests £13000 per dwelling, hence £4m security)
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Post by memy on Nov 30, 2020 23:06:41 GMT
Good evening Criston.
I certainly understand your point however, assuming your calculations are correct, you still need £9k a plot to pay you off and I am not so sure (to say the least...) this would be possible.
Regarding Moneything, I don't know what lenders can or cannot do (as I have not seen the contract), that is why, if you have noticed, in my posts I have always criticized Monething attitude rather than lenders' attitude.
Anyway, time will tell...
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withnell
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Post by withnell on Dec 1, 2020 7:15:17 GMT
I really don't get the obsession with calling for any project that exceeds an arbitrary end date to be called in.
For this, the asset we have recourse to is the land - given Covid, I doubt there'll be a material detriment in land prices for the next year or so. The borrower is paying a small amount of interest (works out as 4% pa for this month), so is increasing their skin in the game at each point - we remain 1st charge so they clearly feel the equity portion has some value. Even if it doesn't, the more money they put in the more it incentivises them to maximise the value of the plot, as they only get paid out after we do.
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Post by memy on Dec 1, 2020 14:03:58 GMT
Not everyone can seat and wait for months (soon years...) to receive back his investment. Some lenders can, some others can't.
Moreover, the borrower is not paying interests regularly anymore (that is why you are currently receiving only around 4% pa, much less than what you were supposed to receive) as he is running out of money.
If you are happy to wait until the money is completely over and you stop receiving interests, then it is fine. Anyway, this is what is going to happen.
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Post by Badly Drawn Stickman on Dec 1, 2020 14:16:50 GMT
Not everyone can seat and wait for months (soon years...) to receive back his investment. Some lenders can, some others can't. Moreover, the borrower is not paying interests regularly anymore (that is why you are currently receiving only around 4% pa, much less than what you were supposed to receive) as he is running out of money. If you are happy to wait until the money is completely over and you stop receiving interests, then it is fine. Anyway, this is what is going to happen. Whilst your concern for lenders is heartwarming. I am slightly puzzled by its increasing intensity. One might mistakenly feel that you consider the action to be to your advantage in some way.
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Post by memy on Dec 1, 2020 16:04:00 GMT
Since the beginning I have said that I am concerned about this situation because I (just like the other plots' owners) have been stuck with this investment for almost 4 years. I have also clearly said that, as I have totally lost faith in the developer, I would like preferential creditors to force this company into liquidation.
However, all this does not mean that my comments are unfair or untrue.
I can stop writing on this forum, if this makes you feel better, but this will not change the way things are.
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criston
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Post by criston on Dec 1, 2020 16:16:57 GMT
To clarify my quick earlier post, to secure 100% return should the loan be called in.
Loan £25000000.
9 months interest arrears by 24/12/20 is £319000.
312 units.
£9000 per plot.
That's without any added value for the 408sq m of commercial space.
That's without any administration costs & ongoing interest.
Valued in 2017 at £13000 per plot.
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withnell
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Post by withnell on Dec 1, 2020 16:18:28 GMT
Not everyone can seat and wait for months (soon years...) to receive back his investment. Some lenders can, some others can't. Moreover, the borrower is not paying interests regularly anymore (that is why you are currently receiving only around 4% pa, much less than what you were supposed to receive) as he is running out of money. If you are happy to wait until the money is completely over and you stop receiving interests, then it is fine. Anyway, this is what is going to happen. As I see it, there are two options: Option 1: Appoint an administrator and firesale the site. Given the continued enagement by the borrower I'd expect a full capital recovery, but then after admin fees possibly a loss Option 2: Wait it out a bit. Borrower continues to pay some interest (significantly more than any savings account, similar level to the Assetz QAA, and key is greater than inflation). Hopefully a refinance happens and lenders receive full capital and interest far sooner than they would under Option 1. Fallback of Option 1 should this fail. I appreciate you have a different angle on this, but from a P2P Lender's perspective, unless you feel that the market hasn't already priced Covid into land values (eg you want to get rid fast) then there's really only one clear option given continued injection of cash by the equity holder
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