29-04-2018, 11:09 PM
As noted, BDO will be all too happy to charge for each and every contact that is made, so it will be important to keep communications with them to a minimum
To help minimise any bombardment, below is a list of questions which I will keep updated. When BDO first make contact with "Creditor-Investor", I will place any relevant answers to the questions, and any remaining questions we can send as a single batch (as it has been noted; several lenders have had contact with BDO and contact details swapped. It would be sensible if a single member can send these when it is deemed appropriate)
I must stress what others have said, and refrain from any pointless comms with BDO for the time being
The below also acts as a Q&A for lenders (Needless to say, it is Unofficial; I accept no responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained below)
The following is an initial list of questions; please feel free to post any further questions and I will add them. If you think any question has been addressed, please let me know (preferably with citation), and I will update the Q&A accordingly
Please feel free to post any further questions and I will add them. If you think any question has been addressed, please let me know (preferably with citation), and I will update the Q&A accordingly
Links
To help minimise any bombardment, below is a list of questions which I will keep updated. When BDO first make contact with "Creditor-Investor", I will place any relevant answers to the questions, and any remaining questions we can send as a single batch (as it has been noted; several lenders have had contact with BDO and contact details swapped. It would be sensible if a single member can send these when it is deemed appropriate)
I must stress what others have said, and refrain from any pointless comms with BDO for the time being
The below also acts as a Q&A for lenders (Needless to say, it is Unofficial; I accept no responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained below)
The following is an initial list of questions; please feel free to post any further questions and I will add them. If you think any question has been addressed, please let me know (preferably with citation), and I will update the Q&A accordingly
Please feel free to post any further questions and I will add them. If you think any question has been addressed, please let me know (preferably with citation), and I will update the Q&A accordingly
Links
- Timeline
- Court Hearing 27th April 2018 > Details from the court day
- Generic reply to enquiries from BDO to investors
- <first> Publication by BDO for Collateral investors & borrowers
- FAQ's published by BDO (02/05/2018)
- Why have the Companies been placed into Administration?
- The directors? of the Companies took steps to place the Companies into Administration on 28 February 2018, considering that the Companies were unable to meet their debts as they fell due. Mr Gordon Craig of Refresh Recovery Limited was purportedly appointed administrator over the Companies.
- By law, in respect of a company carrying out regulated activities, the UK Financial Conduct Authority?s (the ?FCA?) consent to the proposed appointment of an administrator is required. There had historically been a dispute between the Companies and the FCA as to whether the Companies were carrying out a regulated activity.
- The FCA?s consent was neither sought nor provided in relation to the directors? proposed appointment of an administrator. The FCA was unwilling to provide retrospective consent to Mr Craig?s purported appointment and, consequently, applied to Court for (i) a declaration that the purported appointment of Mr Craig was invalid; and (ii) an order appointing Shane Crooks and Mark Shaw of BDO LLP as Joint Administrators, with effect from 27 April 2018. The Court made an order in these terms.
- <Citation>
- The directors? of the Companies took steps to place the Companies into Administration on 28 February 2018, considering that the Companies were unable to meet their debts as they fell due. Mr Gordon Craig of Refresh Recovery Limited was purportedly appointed administrator over the Companies.
- Were the Companies not already in Administration?
- The Court Order of 27 April 2018 states that the purported appointment of Mr Gordon Craig as administrator of the Companies on 28 February 2018 was and is invalid. The Joint Administrators will liaise with Mr Craig to understand what steps he has taken in the period between 28 February and 27 April 2018.
- Do lenders need to take any action at this stage? For example, do they need to register their details with the receiver
- There are no immediate steps that investors need to take in respect of the administrations. In the meantime, we have set up a dedicated website that provides initial information to both investors/creditors and borrowers of the Collateral Companies. I provide the website link below:
www.bdo.co.uk/en-gb/collateral-companies-in-administration
<Citation>
- There are no immediate steps that investors need to take in respect of the administrations. In the meantime, we have set up a dedicated website that provides initial information to both investors/creditors and borrowers of the Collateral Companies. I provide the website link below:
- Once the Companies? books and records have been recovered, the Joint Administrators will be taking steps to reconcile the position of all investors, other creditors and borrowers.
<Citation>
- Once the Companies? books and records have been recovered, the Joint Administrators will be taking steps to reconcile the position of all investors, other creditors and borrowers.
- Are the directors still in charge of the Companies?
- No, the Joint Administrators now have the exclusive power to control and manage the affairs, business and property of the Companies.
<Citation>
- No, the Joint Administrators now have the exclusive power to control and manage the affairs, business and property of the Companies.
- In whose interests do the Joint Administrators act?
- The Joint Administrators are officers of the English court. They are subject to the overall supervision and control of the English court and the Companies? creditors. This places very high standards of care on the Joint Administrators to act objectively and in good faith in the interests of the Companies, its investors and its other creditors and stakeholders. Both of the Joint Administrators are regulated as English Chartered Accountants and are authorised insolvency practitioners.
<Citation>
- The Joint Administrators are officers of the English court. They are subject to the overall supervision and control of the English court and the Companies? creditors. This places very high standards of care on the Joint Administrators to act objectively and in good faith in the interests of the Companies, its investors and its other creditors and stakeholders. Both of the Joint Administrators are regulated as English Chartered Accountants and are authorised insolvency practitioners.
- Will the Collateral website be restored as 'read only' so that all investors can access their account information?
- The Joint Administrators will, if possible, consider making available to investors a ?read-only? version of the online platform. At this stage, it is not possible to comment on the feasibility of this option.
<Citation>
- The Joint Administrators will, if possible, consider making available to investors a ?read-only? version of the online platform. At this stage, it is not possible to comment on the feasibility of this option.
- Are the Joint Administrators considering the sale of the loan book to another company?
- The Joint Administrators will explore the feasibility and appropriateness of such a sale (should there be expressions of interest) and will act according to the best interests of the Companies and their creditors. The initial focus of the Joint Administrators, however, is to recover the books and records and understand the nature of the outstanding loan book.
<Citation>
- The Joint Administrators will explore the feasibility and appropriateness of such a sale (should there be expressions of interest) and will act according to the best interests of the Companies and their creditors. The initial focus of the Joint Administrators, however, is to recover the books and records and understand the nature of the outstanding loan book.
- What is the legal status of the investors in the Administration? How will the Joint Administrators calculate the amounts due to them and how will they administer repayments?
- The Joint Administrators intend to review the books and records of the Companies to understand the contractual and legal relationship between the Companies, the investors and the borrowers. Where appropriate, the Joint Administrators will seek legal advice to assist in their determination.
<Citation>
- The Joint Administrators intend to review the books and records of the Companies to understand the contractual and legal relationship between the Companies, the investors and the borrowers. Where appropriate, the Joint Administrators will seek legal advice to assist in their determination.
- The court papers make reference to funds being paid out of the Companies? accounts in February. Will the Joint Administrators be pursuing those funds?
- The Joint Administrators will be carrying out investigations into the affairs of the Companies, the reasons for their failure and the conduct of the directors. The administrators will consider any appropriate action once those investigations are complete. They are unable to make any further comment at this stage.
<Citation>
- The Joint Administrators will be carrying out investigations into the affairs of the Companies, the reasons for their failure and the conduct of the directors. The administrators will consider any appropriate action once those investigations are complete. They are unable to make any further comment at this stage.
- What is the status of individual investors uninvested funds on the site?
- Have client funds been treated as per the FCA handbook in a segregated client account now and in the future?
- What is the status of the Security Trustee which holds the loan security on behalf of lenders?
- What is the status of retained interest held on account at loan drawdown? Who holds this money? Is it held in a ringfenced client account? Is it an asset of CollateralUK?
- What happens to investor money pledged to loans but not drawn down by a borrower?
- What process is in place to deal with defaulted and overdue loans?
- Can you confirm that the priority rankings of development loan tranches as stated in the loan particulars will be recognised (for example Bolton Great Moor Street)?
- How will lenders withdraw interest and capital repayments?
- How do you intend to fulfill further lending on current development loans where required?
- How will administration fees be met?
- Are borrower's items held in vaults/security deposit properly secured, and who has the company keys to all the lockups? There are two safety deposit type depositories in Manchester and a larger lockup somewhere towards Preston
- Are Secondary Market listings now cancelled on the system? What date will be used for interest calculation on these loan parts?
- Are you aware that some loan parts for sale are still accruing interest (eg BL00035) ?
- Are there any offers are still on the table for the loan book (in full or part)?
- Who does the retained interest belong to?
PLEASE NOTE : The opinions and observations that I display on this forum are of a personal nature. I am not a professional within the financial sector, I represent no platform and my remarks should not be taken as advice. I accept no responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in my posts.