London Capital and Finance

eskbanker

jimjames wrote: »

It appears that some bondholder have already heard from the administrators by email so they're not losing any time contacting them

What did your email say?

Botheredin

masonic wrote: »

It's unlikely those who ultimately benefited from the money committed any crimes.

Can you expand?

masonic

Botheredin wrote: »

Can you expand?

It's not a crime to accept a loan from a friend, even if you can't pay it back. Nor a gift. Neither is it a crime to raise money to support your business from those willing to lend to you, even if your business is fundamentally flawed. It is not even a crime to market such loans to the general public, just a potential regulatory breach with limited recourse, and probably no personal recourse against the directors of a limited company other than possibly being unable to work in financial services again for a while.

However, if it can be shown that the directors did not act in the best interests of creditors (and this would require something beyond proving the loans they made were very risky), then the directors could be held personally liable. Then it comes down to whether or not their personal assets amount to much. It is unlikely they would put themselves in the position of retaining substantial personal assets if this is a realistic possibility, hence they won't be the ultimate beneficiaries.

Jelli

eskbanker wrote: »

What did your email say?

https://drive.google.com/file/d/1W5MTyXdd2HKT9FbWYAEZIb1BbO3kJWtU/view?usp=sharing

That's the only thing I got today.

Botheredin

masonic wrote: »

It's not a crime to accept a loan from a friend, even if you can't pay it back.

Even if you took it under the implied or direct agreement it would be paid back? Doesn't sound right?

Botheredin

masonic wrote: »

It's not a crime to accept a loan from a friend, even if you can't pay it back.

Apologies, this peaked my interest and I had a cast around. Found this:

Fraud Act offences

The Fraud Act contains three main fraud offences:

Fraud by false representation (section 2). A representation may be express or implied. It is false if it is untrue or misleading and the person making it knows that this is, or might be, the case.

Fraud by failing to disclose information where there is a legal duty to disclose it (section 3).
Fraud by abuse of position (section 4). Abuse of position applies where a person occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person. A person may abuse that position through an act or omission.

Common to all three Fraud Act offences is the requirement that the person act dishonestly, intending to make a gain for himself or another or to cause loss to another (or expose another to a risk of loss).

The Fraud Act contains additional offences relating to the possession, manufacture or supply of articles for use in frauds (sections 6 and 7), and obtaining services dishonestly (section 11).

Theft Act offences

The Theft Act contains the offences of:
False accounting (section 17).
False statements by company directors (section 19).

Conspiracy to defraud

It remains an offence at common law to conspire, with one or more persons, to deprive a person of something which belongs to him or to which he is entitled. Since it does not matter if the intended fraud was never in fact committed, conspiracy to defraud is a popular charge with prosecutors where the evidence of actual fraud taking place is complex or weak. The prosecution must prove the existence of an agreement and that the defendant acted dishonestly.

The above offences are capable of being committed by individuals and corporates.

Misleading impressions

A person commits an offence if he does an act or engages in a course of conduct which creates a false or misleading impression as to the market in, or the price or value of, any relevant investments. The person must both:

Intend to make the impression; and either

Intend, by creating the impression, to

induce another person by making the impression to acquire, dispose of, subscribe for or underwrite the investments, or to refrain from doing so; or to exercise, or refrain from exercising, any rights conferred by the investments; or

make a gain for himself or another (or cause loss to another), or be aware that it is likely to have that result, knowing that the impression is false or misleading (or be reckless as to whether it is).

Food for thought maybe? It does seem like an awful lot of boxes are ticked on first glance...

masonic

Botheredin wrote: »

Even if you took it under the implied or direct agreement it would be paid back? Doesn't sound right?

You are surely not suggesting that LCF stated that Bondholders' capital was guaranteed to be repaid and therefore not at risk?

When you lend money, there is always an implied risk it will not be paid back if the debtor becomes unable to pay it back. If a loan is not repaid in accordance with the terms of the agreement, then the debtor would be in default, but defaulting on a loan is not a crime.

It isn't just that companies aren't breaking the law by failing to repay debts when they become insolvent, they have substantial legal rights. Firstly, the directors of limited liability companies such as LCF are not ordinarily legally liable for company's debts or liabilities (beyond the money they have personally invested in the company). Secondly, a company can put itself in Administration and is then protected from legal action from creditors, as has now happened with LCF. Creditors, including Bondholders, will eventually have as much of their claims paid as possible by the Joint Administrators from disposing of the assets of LCF, after taking their fees, which could be substantial. Once liquidated, that will be the end of the matter, unless a case for piercing the shield of limited liability can be made.

antrobus

You can find LC&F's 2017 accounts here
https://beta.companieshouse.gov.uk/company/08140312

At that time they had a total of 11 corporate borrowers and they claim that the value of the secured assets they held was about five times the amount lent.

I'm not sure but I suspect that the FCA's action b...., sorry stuffed up their cashflow, so much so that administration was a better outcome than default.

Botheredin

antrobus wrote: »

You can find LC&F's 2017 accounts here

At that time they had a total of 11 corporate borrowers and they claim that the value of the secured assets they held was about five times the amount lent.

I'm not sure but I suspect that the FCA's action b...., sorry stuffed up their cashflow, so much so that administration was a better outcome than default.

Sure, but these accounts are over a year old. Non one knows what's in the rest of it that hasn't been filed yet.Also, the point remains that they state because of FCA action they could raise no more funds hence insolvency. Sounds a very flawed model.

Botheredin

masonic wrote: »

You are surely not suggesting that LCF stated that Bondholders' capital was guaranteed to be repaid and therefore not at risk?

Not at all. Just pointing out that on one hand it's "Here is the world!" Then it is, in very small print and backed by sharp sales practices, "Here is a bedsit..."