24-05-2019, 09:15 AM
I have been told that on the independent forum a peer called wuzimu has started an initiative to draft a letter to the FCA, consumer.queries@fca.org.uk, (and possibily the press) to tell a few stories about Lendy mismanagement of loans and lenders expectations.
Wuzimu made a general picture of the Lendy management of affairs and commented in particular on DFL012.
His letter is here: http://p2pindependentforum.com/thread/14...fair-terms
I would like to add my bits for two additional loans which have been grossly mismanaged by Lendy in my view.
Feel free to copy and paste in your complaint letter to FCA and/or to suggest also in the other forum.
------------------------
DFL001 - Exeter Rydon Court Development
------------------------
This loan was for a development of 10 houses (Rydon Court) in Exeter, Devon for £5,988,911 supported by 3806 lenders and launched on 09/03/2016.
The loan was launched under the original Lendy loan terms and the loan was made by lenders directly to Lendy itself.
There was no relationship at all between the lenders and the borrower.
The money was lent to a (then) apparently successfull company (Lendy) which should have paid it all back in March 2017. The loan never repaid anything back.
While reporting to the press record profits of £2.74m for the financial year ended 31 dec 2016 (and later additional £605,126 for the financial year ended 31 dec 2017), the Lendy company refused to repay the legal obligation which contracted with its lenders in 2016 and never repaid this debt.
The development was slower than forecast and interrupted multiple times in 2017 and 2018 for disagreements between the Lendy company and the borrower, with receivers appointed by Lendy in September 2017, but not arriving to any outcome.
As of today (24 May 2019), 706 days after the expected end of the loan, Lendy have not yet given back lenders a penny of their money and, over three years down the line, have not prospected any viable solution to the lenders.
To un untrained eye, it looks like the profits reported by Lendy for years 2016 and 2017 should have not been distributed before satisfying all legal obligations which Lendy had with the peoplethat lent money to Lendy (and not to any third party) in DFL001. Lendy should have been repaying the lenders in this effectively default loan DFL001 before distributing any profits and/or bonuses.
------------------------
DFL005 - Arboretum, Land with planning, Paignton
------------------------
This loan was for the development of the Arboretum housing park (extension of previous Lendy loan PBL035), for £7,846,884 supported by 4415 lenders and launched on 07/09/2016.
The loan included the freehold of the properties and all the developed housing within in and was due to repay in September 2017.
On 21/7/2017 Lendy commented on the value of the freehold: "Heads of Terms have now been provided by the Borrower regarding the sale of the freehold for £4m, which is planned to complete once the site is complete".
The technical progress on site was always described as good and on 22/08/2017 Lendy reported:
"The Borrower has confirmed to us that they are in advanced discussions to sell 50% of this SPV property company for £10m, with heads of terms expected to be agreed by the end of August and completion by the end of October. Upon completion, the borrower intends to fully repay this loan".
A four month extension was allowed in August 2017 up to 5 January 2018.
On 15/09/2017 Lendy confirmed the good progress and very close expected full repayment: "We have now seen draft Heads of Terms confirming a proposed equity investment and sale of freehold title, which together will generate more than sufficient funds to repay the drawn loan balance within the extended term."
On 19/01/2018, Lendy commented: "The borrower is expecting to fully repay the loan before the end of January [2018] and the solicitor has confirmed that this is a realistic timescale".
On 2/2/2018 Lendy commented: "completion of the sale is expected over the course of the next few working days"
On 09/02/2018, Lendy comented: "Whilst the loan is still to be repaid, we are now very close to completion, having received positive updates from the borrower's broker over the past few days. The current status is that the funds to be used to redeem the loan are now in place. The only thing now holding up the repayment is the legal due diligence."
On 16/02/2018 a Certificate of Practical Completion has been issued and later photos from the site confirmed that all works were effectively technically completed.
While all the Lendy communication pointed to a good and imminent full repayment of the loan, at this stage something changed radically.
On 01/03/2018 Lendy communicated that they allowed the borrower to sell the freehold of the development site (which was a key part of the security held by secured creditors).
Very strangely (and certainly not according to the law in what should have been a security subject to independent administration and its stringent rules), the lenders (only secured creditors of the site) only received 2 millions out of the prospected 4 millions that the sale generated.
On 29/03/2018 Lendy communicated that "Approximately £400,000 of the sale proceeds of the freehold was released to the borrower to settle outstanding creditors of the scheme.". So at least 400k £ which were due to the lenders (secured creditors) were effectively distracted and given to the borrower supposedly to repay unsecured creditors (which were given priority over secured creditors).
While the borrower was offered an additional 6 months extension (to September 2018) to repay its debt and while the park was fully utilised (with commercial activities running since March 2018), not a single additional penny come to lenders.
As of now, 219 days after the end of the latest extension, no solution is in sight for Lendy lenders (secured creditors) while the borrower and unsecured credtors were fully satisfied in their requests and given priority over secured ones.
Wuzimu made a general picture of the Lendy management of affairs and commented in particular on DFL012.
His letter is here: http://p2pindependentforum.com/thread/14...fair-terms
I would like to add my bits for two additional loans which have been grossly mismanaged by Lendy in my view.
Feel free to copy and paste in your complaint letter to FCA and/or to suggest also in the other forum.
------------------------
DFL001 - Exeter Rydon Court Development
------------------------
This loan was for a development of 10 houses (Rydon Court) in Exeter, Devon for £5,988,911 supported by 3806 lenders and launched on 09/03/2016.
The loan was launched under the original Lendy loan terms and the loan was made by lenders directly to Lendy itself.
There was no relationship at all between the lenders and the borrower.
The money was lent to a (then) apparently successfull company (Lendy) which should have paid it all back in March 2017. The loan never repaid anything back.
While reporting to the press record profits of £2.74m for the financial year ended 31 dec 2016 (and later additional £605,126 for the financial year ended 31 dec 2017), the Lendy company refused to repay the legal obligation which contracted with its lenders in 2016 and never repaid this debt.
The development was slower than forecast and interrupted multiple times in 2017 and 2018 for disagreements between the Lendy company and the borrower, with receivers appointed by Lendy in September 2017, but not arriving to any outcome.
As of today (24 May 2019), 706 days after the expected end of the loan, Lendy have not yet given back lenders a penny of their money and, over three years down the line, have not prospected any viable solution to the lenders.
To un untrained eye, it looks like the profits reported by Lendy for years 2016 and 2017 should have not been distributed before satisfying all legal obligations which Lendy had with the peoplethat lent money to Lendy (and not to any third party) in DFL001. Lendy should have been repaying the lenders in this effectively default loan DFL001 before distributing any profits and/or bonuses.
------------------------
DFL005 - Arboretum, Land with planning, Paignton
------------------------
This loan was for the development of the Arboretum housing park (extension of previous Lendy loan PBL035), for £7,846,884 supported by 4415 lenders and launched on 07/09/2016.
The loan included the freehold of the properties and all the developed housing within in and was due to repay in September 2017.
On 21/7/2017 Lendy commented on the value of the freehold: "Heads of Terms have now been provided by the Borrower regarding the sale of the freehold for £4m, which is planned to complete once the site is complete".
The technical progress on site was always described as good and on 22/08/2017 Lendy reported:
"The Borrower has confirmed to us that they are in advanced discussions to sell 50% of this SPV property company for £10m, with heads of terms expected to be agreed by the end of August and completion by the end of October. Upon completion, the borrower intends to fully repay this loan".
A four month extension was allowed in August 2017 up to 5 January 2018.
On 15/09/2017 Lendy confirmed the good progress and very close expected full repayment: "We have now seen draft Heads of Terms confirming a proposed equity investment and sale of freehold title, which together will generate more than sufficient funds to repay the drawn loan balance within the extended term."
On 19/01/2018, Lendy commented: "The borrower is expecting to fully repay the loan before the end of January [2018] and the solicitor has confirmed that this is a realistic timescale".
On 2/2/2018 Lendy commented: "completion of the sale is expected over the course of the next few working days"
On 09/02/2018, Lendy comented: "Whilst the loan is still to be repaid, we are now very close to completion, having received positive updates from the borrower's broker over the past few days. The current status is that the funds to be used to redeem the loan are now in place. The only thing now holding up the repayment is the legal due diligence."
On 16/02/2018 a Certificate of Practical Completion has been issued and later photos from the site confirmed that all works were effectively technically completed.
While all the Lendy communication pointed to a good and imminent full repayment of the loan, at this stage something changed radically.
On 01/03/2018 Lendy communicated that they allowed the borrower to sell the freehold of the development site (which was a key part of the security held by secured creditors).
Very strangely (and certainly not according to the law in what should have been a security subject to independent administration and its stringent rules), the lenders (only secured creditors of the site) only received 2 millions out of the prospected 4 millions that the sale generated.
On 29/03/2018 Lendy communicated that "Approximately £400,000 of the sale proceeds of the freehold was released to the borrower to settle outstanding creditors of the scheme.". So at least 400k £ which were due to the lenders (secured creditors) were effectively distracted and given to the borrower supposedly to repay unsecured creditors (which were given priority over secured creditors).
While the borrower was offered an additional 6 months extension (to September 2018) to repay its debt and while the park was fully utilised (with commercial activities running since March 2018), not a single additional penny come to lenders.
As of now, 219 days after the end of the latest extension, no solution is in sight for Lendy lenders (secured creditors) while the borrower and unsecured credtors were fully satisfied in their requests and given priority over secured ones.