Distressed Asset Bonds gone bad

edited 30 November -1 at 1:00AM in Savings & Investments
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edited 30 November -1 at 1:00AM in Savings & Investments
We are looking for advice regarding an investment in Distressed Asset Bonds.
We invested a few years ago and everything has been ticking along fine. We were receiving quarterly payouts and had no issues. These ceased at the beginning of this year and we have found through Companies House that they are trying to dissolve the company because they have not been filing their returns. We have objected to this dissolution and have a stay of execution until January 2019.

We can no longer reach anyone at the company and all attempts at contact have failed. We are thinking that the legal route is the only way to go and have sent letters holding them in breach of contract. Unfortunately they are unregulated by the FCA.

Any suggestions as to what we do next to recover any of investment monies or how the process works and who we need to be in contact with to ensure our interests are considered.

Thank you.
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Replies

  • MalthusianMalthusian Forumite
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    Were you advised to invest by an FCA regulated adviser?

    If the answer is "no" I am afraid your money is probably gone.

    Which company was this?
    We invested a few years ago and everything has been ticking along fine. We were receiving quarterly payouts and had no issues.
    If you'd given someone £10,000 would you expect them to have any issues in giving you £200 - £300 a quarter back for a few years?
  • dunstonhdunstonh Forumite
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    We are thinking that the legal route is the only way to go and have sent letters holding them in breach of contract.
    Why do you think they are in breach of contract?
    Unfortunately they are unregulated by the FCA.

    That is one of the risks when you buy extremely high-risk bonds of this nature.

    The vast majority of advisers steer clear of high-risk unregulated investments. However, if you were advised, you may have consumer protection. if you bought without advice then its usually total or near total loss with no compensation.
    Any suggestions as to what we do next to recover any of investment monies or how the process works and who we need to be in contact with to ensure our interests are considered.

    You need to start on the basis you have lost the lot. That is what normally happens. However, the administrators will look to dispose of the assets at best price they can but this will usually be at an often substational loss. Then after costs etc they will look to distribute what they have left to the creditors. Soi, a few pennies in the pound may end up coming your way.

    Can you name the bond in question?
  • poppy10_2poppy10_2 Forumite
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    How does an "investment newbie" end up buying distressed asset bonds?
    poppy10
  • ReaperReaper Forumite
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    poppy10 wrote: »
    How does an "investment newbie" end up buying distressed asset bonds?
    I'm guessing a cold call
  • MalthusianMalthusian Forumite
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    dunstonh wrote: »
    Can you name the bond in question?

    Krono Partners, perchance? It's a guess, but the company promoted "Distressed Asset Bonds" and had a strike-off application filed in June and suspended in July. The bonds were supposed to pay 8% interest plus a variable coupon of 20% of the company's profits for seven years.

    Notably, the company solicited another round of investment in 2017, this time for "micro loan bonds" paying 10% per annum for five years.

    Hypothetically, let's say you had a hypothetical company which used the classic Ponzi Law of Threes - one third to pay interest to investors, one third to actually invest in assets so you can point to them and say "look it's real", and one third into the pockets of the organisers and promoters. And let's say that they paid 8% per annum starting in 2013. 2017 is exactly when they'd start running out of money. (Assuming no returns from the supposed investment which there rarely is.)

    Reboots rarely raise as much money as the original scheme (even when they promise more interest than the original bonds) as the market for ultra high risk unregulated bonds has already been partially tapped out.

    But none of this is necessarily anything to do with Kronos Partners and the OP has not confirmed which company it is.
  • Am in the same boat, I have been told that it will approximately one year untill the distressed asset bonds are redeemed. This is the second time I have been told this with about 2 months between these notifications. I think as the property prices decrease so the gap gets longer.
    I think we should identify the bank that froze the batch of payments which included not only Krono investors but others investors as well, earlier this year, and see what can be done to get it released.
    Any ideas please.??? The increased powers which banks have been given in this respect deserves some attention by Martin, if it is causing hardship to innocent people, there must be something wrong with it.
    There is no doubt the company is struggling to meet its obligations, not only as a result of the frozen batch but also the slowdown in the housing market, legal action will only make it harder for them and probably us as well.
  • WildsoundWildsound Forumite
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    Am in the same boat, I have been told that it will approximately one year untill the distressed asset bonds are redeemed. This is the second time I have been told this with about 2 months between these notifications. I think as the property prices decrease so the gap gets longer.
    I think we should identify the bank that froze the batch of payments which included not only Krono investors but others investors as well, earlier this year, and see what can be done to get it released.
    Any ideas please.??? The increased powers which banks have been given in this respect deserves some attention by Martin, if it is causing hardship to innocent people, there must be something wrong with it.
    There is no doubt the company is struggling to meet its obligations, not only as a result of the frozen batch but also the slowdown in the housing market, legal action will only make it harder for them and probably us as well.

    Might be worth creating your own thread (quoting this post as a reference to others) and supplying us with as much detail as possible as to your circumstances at the time when you "invested" into this product (i.e. when? how much? why? how you came across this investment? who suggested it? etc...)
  • MalthusianMalthusian Forumite
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    Am in the same boat, I have been told that it will approximately one year untill the distressed asset bonds are redeemed. This is the second time I have been told this with about 2 months between these notifications.

    Were you advised to invest by an FCA regulated adviser?

    If the answer is no then I am afraid your money is probably gone.

    The stuff about falling property prices and frozen bank accounts sounds like classic BS. Neither the banks nor any "increased powers" they have are responsible for the fact that your money is missing. You invested in an ultra high risk unregulated investment, and it has defaulted, as ultra high risk unregulated investments frequently do.

    I am assuming from your post that your bond has matured and the money is repayable immediately, in which case Krono Partners' "banking issues" are not your problem. You have essentially two options: 1) write it off 2) take legal action, which risks throwing good money after bad.
  • dealer_winsdealer_wins
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    The irony of the fund name and the end result lol

    OP sadly I dont think you will recover a penny.
  • ReaperReaper Forumite
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    I agree with Malthusian. I can't see any mention of the bank freezing their money, perhaps you can point us to a link.

    I fear the idea that Krono has a bunch of money they are keen to repay you with if only the banks would let them is wishful thinking.
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