Peer-to-peer lending sites: MSE guide discussion

masonic

jamesd wrote: »

By law they are required to do that and if they believe it's applicable based on what they learn, make a report to the Home Secretary (?).

Yes, and they can also use that information to pursue a personal liability claim against the directors if it were in the interest of creditors. Although I have observed that it can cause a director to become terribly ill and unable to attend court while simultaneously disposing of their assets at a rapid pace.

jamesd

masonic wrote: »

My recollection of BDO's position was that investors were secured investors (not creditors) with trust claims over assets held in security by way of their loan contracts with the borrowers. ... What does appear to be different is that RSM is including ... interest to Lendy, default interest to Lendy, and an exit fee as part of the trust claim

I fail to see how interest to Lendy or default interest due to Lendy can be part of the trust claim. Lendy isn't part of the investor group and I see no reason for payments to Lendy to take precedence over trust payments.

Which is a view those in the trust investor group might wish to take legal advice on.

masonic

jamesd wrote: »

I fail to see how interest to Lendy or default interest due to Lendy can be part of the trust claim. Lendy isn't part of the investor group and I see no reason for payments to Lendy to take precedence over trust payments.

Which is a view those in the trust investor group might wish to take legal advice on.

The reason the administrator believes this is because apparently that's what is set out in the Loan Contracts and the legal advice they have obtained supports that. Interest and default interest to Lendy aren't being proposed to take precedence over principal repayments to investors, they are all to be ranked equally.

The trust investor group is currently raising £75k to engage with a specialist lawyer. Meanwhile the administrator is referring the matter to the court for their decision on how distributed funds should be allocated.

There are of course risks involved in challenging the validity of the Loan Contracts between borrower and lender. Especially when a party to the contract has never seen the terms contained therein.

Ash_Pole

masonic said:

jamesd wrote: »

I fail to see how interest to Lendy or default interest due to Lendy can be part of the trust claim. Lendy isn't part of the investor group and I see no reason for payments to Lendy to take precedence over trust payments.

Which is a view those in the trust investor group might wish to take legal advice on.

The reason the administrator believes this is because apparently that's what is set out in the Loan Contracts and the legal advice they have obtained supports that. Interest and default interest to Lendy aren't being proposed to take precedence over principal repayments to investors, they are all to be ranked equally.

I don't know much about company administrations, but if Lendy is insolvent & in administration, how can they be owed money? And who gets this money surely it can't be the shareholders...?

AdrianC

Ash_Pole said:

I don't know much about company administrations, but if Lendy is insolvent & in administration, how can they be owed money? And who gets this money surely it can't be the shareholders...?

Lendy Ltd still exists. It cannot continue to trade as-was, simply because it's insolvent.

It is now being run by the administrators, whose job is to either try to sell it as a going concern (they deemed that not to be possible fairly quickly) or close it down in an orderly fashion - by calling in all debts owed to it, and paying any assets out fairly to everybody owed money by it.

Those debts owed to it include the "waterfall" amounts under the "new terms" loans and the entire outstanding balances of the "old terms" loans.

The money goes to the creditors - HMRC, any unpaid suppliers, staff who haven't been paid their wages, etc, etc. Amongst those creditors are the lenders for the old-terms loans.

The outstanding balances from the "new terms" loans are owed straight to the lenders.

masonic

Ash_Pole said:

I don't know much about company administrations, but if Lendy is insolvent & in administration, how can they be owed money? And who gets this money surely it can't be the shareholders...?

A company doesn't cease to be able to chase its debtors when it enters into administration. If you order goods and services from a company, and those goods and services are provided to you, you would still have to pay for those goods and services even if the company went bust. The administrator has the power to pursue you for payment.
In the case that the company will ultimately be liquidated, any money would be used to repay creditors. Shareholders are quite a long way down the list of creditors.

colalba

colalba said:

Lendy went into administration earlier in the year. The Lendy Action Group is currently crowd funding ( crowdjustice.com ) to bring a legal action to ensure a higher proportion of any recovered funds finds its way to the lenders rather than the owners of the platform.

https://lendyactiongroup.co.uk/login/

Link to the crowdfunding page
https://www.crowdjustice.com/case/lendy-action-group-legal-fund/

I hope it is ok to have such a link, apologies if it isn't. I am not involved in the running of the LAG just a small lender.

Currently this has raised £69k so nearly at the £75k target.  There have been 1366 pledges but I know from another forum that many have pledged more than once. Just a small percentage of the thousands of investors caught up in the Lendy fiasco but alas the Lendy Action Group has no assess to  the lendy customer list so no easy way to contact everybody involved.  From the comments on the pledges it is apparent there have even been some pledges from people who have no involvement in Lendy.

colalba

The fund raise by Lendy Action Group to try and ensure more of the cash recovered from borrowers reaches the lenders has now been completed and raised £75k.  Guess it is now a long wait until it gets to court.

MrKirk

Hello everybody!

Please advise p2p sites that allow secured investments?

Has anyone had any experience with Relendex.com?

Alexland

The whole point of P2P is that you are taking capital risk hoping to get an enhanced return. Their security and assurances are worth close to zero when they go bust so assume 100% of your money could be lost and consider if running this risk is really worth the higher interest rates.