BTL £6m loss prompts calls for law change

Graham_Devon

The case of a buy-to-let landlord who lost a business once valued at £6million has added fuel to the campaign to repeal the 87-year-old law governing small firms in financial difficulty.

Charles Lancaster, of Bradford, West Yorkshire, lost his portfolio of 42 properties in December 2009 when Nationwide Building Society appointed receivers after he experienced financial difficulties.

Since then he has attempted to buy back his properties, but was told his bid was too low.

Basically, critics want the law changed, so that lenders will have to go to court to start proceedings should borrowers fall foul of their terms.

The complaint appears to be that these claims are unregulated. Touche!

http://www.thisismoney.co.uk/money/mortgageshome/article-2213880/Buy-let-landlord-s-6m-loss-sparks-axe-law.html

Thrugelmir

BTL £6m loss

of a business worth.

Given that

Nationwide Building Society appointed receivers after he experienced financial difficulties

Doesn't appear that he was running his business particularly well.

CKhalvashi

Thrugelmir wrote: »

Doesn't appear that he was running his business particularly well.

I've won in business, I've lost in business.

Especially at the moment, it's a case of deciding whether a risk is good to take.

CK

Graham_Devon

I wonder how much he actually "lost"?

Financial difficulties suggests he was levereged up to the eyeballs and fell foul.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Financial difficulties .

I think you're missing the point.

The call for a change in law is so that small businesses cannot have receivers appointed by their creditors without it going to a court hearing first.

Critics say the Act, which allows banks and others to appoint receivers without asking the courts, creates unequal bargaining power between smaller firms and lenders and want it amended or repealed.

George Eustice MP, formerly David Cameron’s press secretary, has said the act is throttling enterprise and has led to examples of ‘extortionate bargaining’.

He said: ‘These appointments do not require any recourse to the courts. 'They are also unregulated and do not constitute part of the formal insolvency process.’

Nobody is asking for people in financial difficulties to be let off.

Just for them to have the right of judicial process to determine the facts before actions are taken. Which they currently do not.

Thrugelmir

Graham_Devon wrote: »

I wonder how much he actually "lost"?

Financial difficulties suggests he was levereged up to the eyeballs and fell foul.

If set up as a Limited Company probably very little.

Graham_Devon

HAMISH_MCTAVISH wrote: »

I think you're missing the point.

Nah, I'm not missing the point.

You tell me....what do you think the court's would do? Do you really think a different result would take place?

HAMISH_MCTAVISH

Graham_Devon wrote: »

You tell me....what do you think the court's would do?

That would be entirely up to a judge.

Which would be a significant improvement on the current state of affairs where the banks hold all the cards.

Do you really think a different result would take place?

I think the result would be far more likely to be fair and just, whichever way it went.

Are you really advocating that small businesses should NOT have the same protections from unjust actions by banks that individuals have?

That a bank seeking to send a company under should not have to at the very least make an application to a court to do so?

Really?

CLAPTON

maybe we could have some formal protection from creditors to give time to try to refinance etc

we could call it chapter 11 or something equally silly

Thrugelmir

CLAPTON wrote: »

maybe we could have some formal protection from creditors to give time to try to refinance etc

we could call it chapter 11 or something equally silly

"Administration" perhaps.........?

Malcolm.

HAMISH_MCTAVISH wrote: »

That would be entirely up to a judge.

Which would be a significant improvement on the current state of affairs where the banks hold all the cards.



I think the result would be far more likely to be fair and just, whichever way it went.

Are you really advocating that small businesses should NOT have the same protections from unjust actions by banks that individuals have?

That a bank seeking to send a company under should not have to at the very least make an application to a court to do so?

Really?

If they don't like how the bank is treating them they should (be able to) seek refinancing elsewhere. I certainly wouldn't trust a judge to make the correct decision. Putting my cynical hat on, the legal system opeartes more on historic rules and rulings than science (although less-so in bonnie Scotland).