LCF Bondholder Meeting Notes
These are the notes from a meeting of 22 bondholders with Finbarr O'Connell, Adam Stephens and Guy Wilkes, an FCA specialist from Mishcon De Reya on 18th March 2019
The meeting began well until the point that Finbarr advised us that, at present, he can account for only 20% of the value of the funds lent to the Borrowers and Sub-Borrowers. He is hopeful of recovering these assets within a year.
He went on to say that when he interviewed one key person involved in this sad affair that person admitted to receiving millions of pounds of bondholders' money into his personal bank account. This character went on to admit how further millions had gone into the bank accounts of 3 other key people relating to LCF and associated companies.
Whilst there are arguments as to why these monies were received by these people, they are mostly to do with the sale by them of assets to LCF and its associated companies. However, these assets have not shown themselves to be of any substantial value.
S&W updated the FCA with regard to this discovery in the normal way and after a period of time these four people were arrested by the SFO. We can reach our own conclusions as to whether these two matters are related.
The positive is that the SFO have far greater powers than the administratiors in restaining assets and obtaining information. There is potential to recover some funds in this way and, hopefully, if this happens, the SFO will distribute those funds to the bondholders by way of compensation orders.
However, it appears that the people involved have gone to extreme lengths to cover their tracks.
With regard to the FSCS the absolute key thing we need to prove is that LCF provided advice. It is only by proving that bondholders received advice from LCF that they will be eligible for compensation from the FSCS.
We would urge each and every one of you to try and re-live your presales conversations and try to recall any advice that was given to you. This is key. Have you got any notes or recordings of those Take On meetings?
Another blow, S&W were appointed Administrators of London Oil and Gas limited (LOG), the biggest borrowing company, yesterday. This company owes £123 million to LCF. LOG has got some valuable oil and gas related assets which the administrators wish to be in control of in order to maximize their value for the bond holders.
As a result of today’s unexpected events we were not able to ask all of the questions which bondholders had brought with them. However, our relationship with the administrators is such that we will be able to ask them for answers to key questions.
The meeting began well until the point that Finbarr advised us that, at present, he can account for only 20% of the value of the funds lent to the Borrowers and Sub-Borrowers. He is hopeful of recovering these assets within a year.
He went on to say that when he interviewed one key person involved in this sad affair that person admitted to receiving millions of pounds of bondholders' money into his personal bank account. This character went on to admit how further millions had gone into the bank accounts of 3 other key people relating to LCF and associated companies.
Whilst there are arguments as to why these monies were received by these people, they are mostly to do with the sale by them of assets to LCF and its associated companies. However, these assets have not shown themselves to be of any substantial value.
S&W updated the FCA with regard to this discovery in the normal way and after a period of time these four people were arrested by the SFO. We can reach our own conclusions as to whether these two matters are related.
The positive is that the SFO have far greater powers than the administratiors in restaining assets and obtaining information. There is potential to recover some funds in this way and, hopefully, if this happens, the SFO will distribute those funds to the bondholders by way of compensation orders.
However, it appears that the people involved have gone to extreme lengths to cover their tracks.
With regard to the FSCS the absolute key thing we need to prove is that LCF provided advice. It is only by proving that bondholders received advice from LCF that they will be eligible for compensation from the FSCS.
We would urge each and every one of you to try and re-live your presales conversations and try to recall any advice that was given to you. This is key. Have you got any notes or recordings of those Take On meetings?
Another blow, S&W were appointed Administrators of London Oil and Gas limited (LOG), the biggest borrowing company, yesterday. This company owes £123 million to LCF. LOG has got some valuable oil and gas related assets which the administrators wish to be in control of in order to maximize their value for the bond holders.
As a result of today’s unexpected events we were not able to ask all of the questions which bondholders had brought with them. However, our relationship with the administrators is such that we will be able to ask them for answers to key questions.
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