London Capital and Finance

Supercalafragalistic

Thankyou Masonic. Beautifully explained as per usual.

Reaper

masonic wrote: »

They have been politely asked to return the monies originating from the scheme that ended up in their bank accounts, but that's it

Indeed. Two of them ignored the request. The other two agreed to pay up but have failed to do so.

I highly doubt any of them will return a penny unless forced to. Appealing to somebody to do the decent thing only works on decent people.

RichestoRetire

Are the 4 likely to serve any jail time for this?

rr755507

Serious Fraud Office freezes £12 million of property in LCF probe
https://www.standard.co.uk/business/serious-fraud-office-freezes-12-million-of-property-in-lcf-probe-a4143896.html

Sledger

Bit confused with all this that follows as GST seems to be the bad guy here with disgraced Sludgewick was replaced by Bruce Lee then its established GST was registered in Malta and maybe owned by Andy Pandy Thom Thom and son , Then we find Bussoffsmorton LCF Lawyers owns Lakeview who were given LCF funds and Slugewick the former GST released a LCF funded charge on 15 February the day after his solicitor ban expired. This following post has just appeared on Facebook and is very lengthy so may have to make a couple of posts Part 1
Dear Bondholders
Is it your intention as a bondholder to obtain the maximum possible recovery from your investment in minibonds issued by London Capital & Finance PLC or are you happy to rely on a speculative prosecution of the Directors and others who are reported as being arrested?
Either way it is necessary to consider seriously whether the Administration team of Smith & Williamson led by Finbarr O'Connell are the men for the job. This research needs to be deeper than reading their reports and subjective leaked information published in the press. It also requires expertise,proper research and investigation.
BACKGROUND ON FINBARR O'CONNELL
To start, research on Finbarr O'Connell shows he has been demoted from Partnership in insolvency leaders KPMG and Grant Thornton to the much smaller and less influential Smith & Williams. More seriously, he was recently removed by the court from acting as Administrator of VE Interactive Limited last year. https://www.fladgate.com/2018/05/insolvency-challenging-pre-pack-sales/ You can readallabout this on the internet but the critical points are that assets of £1.5billion were not properly understood by Finbarr and his team who failed to take the necessary expert advice and he sold them back to the directors for £2 million to cover his pre! appointment fees, remuneration and legal fees of £1.8 million.
Does this sound familiar?
This must make all creditors very cautious in fully trusting the Administration team. In the case of VE they also used a creditors committee because it is far easier to work on a handful of largely inexperienced creditors to get the Administrators wishes agreed, than to satisfy either the general body of creditors or a professional intermediary who is able and willing to scrutinise everything they do like a debenture holder. Interestingly he seems to use Mishcon de Reya in this and a number of previous cases with the name Mike Stubbs coming up again and again.
SECURITY TRUSTEES
It is now the intention to dig deeply over the days following the reconvening of the adjourned creditors meeting. This research will include the conduct of Global Security Trustees Limited who are the current target of the Administrators for character assassination. Global are the registered holders of the security over the bonds and it is necessary to discover how they view the conduct of the Administrators and how they wish to see matters continue. It can be seen from the Administrators proposal that up until the end of March 2019 Global's status was fully accepted by the Administrators. It is also a point of insolvency law that the security trustees must have agreed to the appointment of the Administrators at the outset. Why now has it all changed? Why have the Administrators starteda media war against the security trustees?
LIQUIDATORS
Research will reveal the truth, but it is likely that the security trusteeshave told the Administrators that they will not agree to their automatic appointment as Liquidators on exit from Administration.
The reason is because if no independent Liquidator is appointed there is no person to examine the conduct of the Administrators and to confirm they have done the best possible job. Creditors should back up the trustees and not allow the Administrators to automatically become the Liquidators. In the VE case the court ordered that not onlyshouldthe Administration by Smith & Williamson be ended, but that Deloitte should be appointed as Liquidators. It is speculated that Deloitte are now attacking the public indemnity insurers of Finbarr and his associates to try to claw something back of the £1.5billion of asset value they lost for the creditors. It is unlikely that they have PI cover for the £1.5billion, which perhaps explains why Smith & Williamson are so fee hungry and proposing to raise capital by listing their shares. The LC&F publicity is mainly to help their stock exchange listing and boost their damaged reputation. This will all change if they are removed for the second time.

Sledger

GST Part 2 Contd
FEES
It is likely that the Trustees will NOT agree to a "blank-cheque-style" payment of the Administrators fees, pre-appointment fees and legal fees, now over £3million without a full review and some serious reductions. Any professional would only agree these on the back of a comprehensive review by cost specialists or by the court. Was it always the case that the £3.6million of LC&F cash reserves of bondholders would vanish into the Administrators pockets rather than paid to Bondholders? The committee members and the bondholders must insist that this cash is used only for distribution and not to pay anything other than basic and essential costs.
TRUSTEES
The Trustees should now be asked by the bondholders directly to explain their position and make a clear statement to them of their intentions. It is very arrogant of Finbarr that he does notc ommunicate their position to the bondholders. They must realise they have a duty to report first hand, and bondholders should press them for such a report. Interesting to note that there are two new directors of the security trustee company, one being a charted accountant qualified to act as an insolvency practitioner and the other a specialist ex-treasury executive who specialised in exercising control over the fees and conduct of liquidators and administrators, in making recoveries for the Crown. This team has been appointed for a purpose and the bondholders might benefit if they are believed to be trustworthy. Both new directors seem to be independent and qualified for this type of situation and their recent actions must be seen as a move on their part to try to protect bondholders. This has caused confrontation with the Administrators who realise now experts run the trustees and as the secured creditor, that they have rights of control over the Administrators actions and this curtails the Administrators freedom.
It seems the recent opposition of the trustees to a creditors committee is not to act against the bondholders as suggested by the Administrators, who want them out of their way. It will be their experience as experts that committees dominated and run by the Administrators and their lawyers, will fail to represent the interests of the bondholders and become arubber-stamping approval process for anything the Administrators and their lawyers wish to achieve especially with the present very weak and inexperienced committee made up of individuals who are supported by less than 10% of the Bondholders. This need not be the case if the committee consists of some experts in insolvency procedures. It would make sense if the security trustees had a creditors committee and their views on this may be sought.
As acreditors committee has been formed, they must be held responsible to the bondholders and required to protect bondholders. They clearly would be ill advised to take any immediate decisions following their appointment other than to confirm their details to the administrator and agree how an independent advisor will be appointed to the committee. They should thereafter only agree to a date for the first full meeting making no decisions until detailed written reports are delivered to them at least two weeks before the meeting, which they can refer for consultation and avice. Various bondholders' sites will be useful for this process. The Administrator will resist the involvement of an advisor and providing detailed reports in advance other than an agenda because it represents a threat to their control. An independent Insolvency Practitioner representing a bondholder serving on the committee even as a co-opted member would be an ideal precaution.
The committee is likely to be pressurised by the Administrator to agree their remuneration and immediate payment. They will also be pressurised into agreeing the proposal and the automatic appointment of Smith & Williamson as Liquidator on completion of the administration. To protect the bondholders members should most probably reject the automatic appointment of Smith & Williamson as Liquidator when LC&F exits administration. The committee should insist that this post would be filled by their nominee for approval by the general body of bondholders. Appointment of Smith & Williamson to follow on as liquidators removes all avenues of a review by an independent body and gives them a free hand with no opportunity to examine their work, costs and seek redress.
The committee should also not agree to the immediate payment of any remuneration, legal fees or pre-administration costs until an expert has independently vetted those costs. As regards legal feesthese should be assessed (reviewed by a costs draughtsman) and all future work be remunerated against estimates ona competitive tender. All Administrators remuneration and legal fees relating to investigations and asset realisations past and future, should only ever be paid out of realisations from the outcome of those investigations and never out of cash in hand. Importantly the weak and sycophantic committee will probably hand out your cash regardless.
The £3.6million held by the Administrator should only be used to pay basic costs with the largest portion going for a first distribution to the bondholders. If the Administrators object to this then invite the Administrator to apply to the court for the approval of their costs. You can be assured they will not do this because the court will cut the £3million down to size.

Sledger

GST Part 3
LONDON OIL & GAS
The next point, which will be investigated, is the conduct of the Administration in the treatment of the main debtor group where the borrowings were against their investments through London Oil & Gas Limited. Subject to market sensitivity and privacy issues, the borrower seems to be willing to discuss the future plans and values of their investments. It has been reported that in December 2018, when the FCA raided LC&F and removed all their computers and records, the value of the investments of LOG were up to double and far more than their debt to LC&F. LOG is now under the control of the same Administrators as LC&F a step taken despite conflicts and with disregard to the interests of the Bondholders.
LOG ADVISORS
Enquiries are proposed into why the Administrators of LC&F have involved themselves in LOG for 3 months, without taking proper advice from the experts needed in both the fields of the oil and gas industry and corporate finance. Realisations of the investments of LOG to the maximum benefit of bondholders, depends on knowledge of the investment market. LOG engaged one of the top international accountancy firms, acorporate finance firm and NOMAD to advise them but the Administrators seem to have sought no input from them when they were appointed. It gets worse for the Administrators when it is clear that Smith & Williamson has no oil and gas division because they are too small with no leading specialist corporate finance division.
REVIEW OF LOG INVESTMENTS
Smith & Williamson refused to employ experts other than a pointless exercise of engaging a minor CPR advisor to confirm the findings of the more senior CPR advisor used by IOG. The delay caused by this step is reported to have cost the Bondholders £20million. The thirst of the Administrators for negative publicity has also caused a reduction in the market value of LOG investments and created huge unnecessary uncertainty. Even so the Administrators have turned down a £60million offer for just one LOG investment which alone would provide 25p in the £
HOLD ADMINISTRATORS TO ACCOUNT
The Bondholders are entitled to have a full explanation of this position from an independent Liquidator when appointed. The Liquidator also needs to obtain anexplanation of why the Administrators ousted the full team of highly qualified and experienced expert LOG directors to replace them with a friend of the Administrator. This nominee forced on LOG by the Administrators, hasno known relevant experience, no further education or professional qualifications, a poor level of school leaving certificates which most 17-year old's surpassed. His only recent directorships or employment have been in small or dormant companies mostly struck off for non compliance. The rumouris that this friend Martin Orrell is remunerated at a total cost of almost £300,000 per year paid for out of funds, which will be taken from the Bondholders. His involvement has further reduced the current values of the LOG investments compounded by the actions and press coverage promoted by the Administrator fed by him. It is suggested that if the position changes in respect of the Administration, much of the lost value is recoverable in time.
PRIME RESORTS
We rang Prime who were very forthcoming and said they have over £100million of assets with £70million LCF debt but they are refinancing and Finbarr refuses to engage with them. Unless Prime are lying how can these assets be valued at zero by Finbarr and his team.
STATEMENT OF ACCOUNT
The directors of LC&F have failed to provide a statement of affairs when it seems they could and should have done so. The Administrators now want the bondholders to pay large sums to accountants and representatives of the Directors as a pre appointment cost. These advisors certainly could have produced such a statement. There seems to be some intention by the Administrators to conceal reporting of the value of the assets now in their control. A statement of affairs in the statutory form is quite specialist and a normal director needs help which the Administrators could have provided, and it is essential to any Administrator in maximising recoveries. The failure to provide this statement is as much an indictment of the Administrators as the Directors but the Directors commit an offence if they fail to prepare such a statement. The Bondholders need to know why this has not been prepared and filed and the extent to which the Administrators are culpable. A new liquidator will rectify this defect in the Administration.
In any event the assets of LC&F appear highly valuable as well as simple and evidenced not only by their own records but by many other sources of information, and not as the process as Administrator would have you believe.
The only remaining purpose of the Administration is to achieve a better realisation for the creditors than liquidation. This cannot now be the case and the Administration has therefore failed. As in the aforementioned case where Smith & Williamson were removed by the court, there can be little benefit of them continuing with the Administration other than to Finbarr O'Connell and Mike Stubbs. The Bondholders should seriously consider voting against the proposal so as to end the Administration now and seek the appointment of an independent liquidator from a large reputable firm of Insolvency Practitioners. Following on from VE, Delloitte should be high on any list as they are used to dealing with this team Would the Security Trustees accept this, as they should do? They will be asked, and their reply published.
SFO
As regards the investigations by the Administrators, the only information is a high level of dirty press coverage propagated by the Administrator, generated through obvious and indiscrete leaks. Does this lynch mob leadership mentality really help the Bondholders? Does it make Bondholders feel better about their losses? If revenge and retribution are the motivation, then this is a dish best served cold within the law and ethical practices. If the SFO is investigating they will do it professionally with discretion under the rules of PACE. They will not seek publicity and inaccurate, speculative press coverage quenching a thirst for scandal. They will be professional discrete, independent, impartial and objective. The Administrators conduct suggests they have not demonstrated any of these qualities. These are the essential qualities of a true investigation because professional investigators know loose tongues and irresponsible reporting will only damage the prospect of a successful outcome.

Sledger

GST Part 4 Note The poster who put this on Facebook is not known
PROSECUTION
If the SFO find the evidence and can prove wrongdoing they will prosecute. If they prosecute, they will seek a confiscation order against the defendant when judgment is obtained. This process will cost the Bondholder nothing as it is funded by the public purse. If a confiscation order is made there will be the opportunity for the Liquidator or Administrator of LC&F to seek a compensation order. This can be a very substantial part of the recovery and it will cost the Bondholders nothing. Currently the Administrator seems to be spending Bondholders funds on their investigation fees unnecessarily, with no advantage to the bondholders. The Administrators have their statutory duties under the "Disqualification of Directors Act" and having disposed of these, which in this case are easy and minimal since the FCA and SFO are already involved and will talk to the Disqualification Unit. The cost of investigation for the Bondholders at this time during the Administration should be minimal. Looking back at his "pack of cards" statement, how many stones will the solicitors of the Administrators leave unturned in his investigation if they only get paid out of results and not for wasted time?
The FCA supported the appointment of the Administrators in preference to others. In view of the dismissal of the Administrators by the court in another case and their lack of expertise, this is surprising and requires investigation by the Treasury in their FCA review. The Bondholders seem to have a valid and strong claim against the FCA and this will require the full support of the Liquidator when appointed. This may be a large part of the recovery and do Bondholders trust Smith & Williamson who are supported by the FCA and who perhaps depend on the FCA for appointments and business, to do the best job? This is a clear conflict of interest.
There is more to come as research continues over the next week but enough is enough and Bondholders should use the present situation to demand an end to the Adminstration and get an independent liquidator appointed before more Bondholders' funds are wasted any more. An independent Liquidator from a leading firm will evaluate the assets properly, obtain a director's statement of affairs and tell the Bondholders the true position with a degree of accuracy to get the best results.
Yours sincerely Informed, enquiring and disgruntled
https://www.fladgate.com/blog-dispute-resolution/2018/05/24/insolvency-challenging-pre-pack-sales/

Catrina777

This article was deleted by the bondholders group. They reckon it has all been said elsewhere and avoid the action group at all costs. Found it helpful to have thoughts confirmed and clarified. How likely is it we will get an independent liquidator? This site is not popular with one of the FB bondholder group admin.

Reaper

I only skimmed it but it sounded a bit biased. The poster has taken a position against the liquidators and is arguing their case rather than being balanced. eg Prime Resorts has money because they said so on the phone, rather than saying they were bankrupt. Surprise.

However I love the sound of being unpopular. What do they dislike about this thread?