No mate, no Twitter. Not big for social media. It's why I am pretty quiet here until there is some way I can add value. Not one for the random chat. Would prefer to just appear when there is something to say/do. I am invested as I am sure you can all tell from me 'bothering' so I do have an interest in seeing the share price go up but I am doing my best to report impartially. DYOR, make your own investment decisions, this is not advice, etc, etc, etc.
No beer needed but the thought is appreciated. While we're in recess, I shall eat my sandwich. Will struggle to stay on this afternoon though as I have meetings. By way of opinion - I THINK it is going well. A lot of what might be consdered negative is not for the judge to consider today. The class means that the oldest customers i.e. the happiest i.e. the ones who have paid back the most will have votes weighted in their favour. I THINK that is the correct interpretation and that is my interpretation. If there is no class split; the largest claims will be by those who paid the most interest, which I assume to be those who paid back the most i.e. older loans, hence why GJ wants them all in since 2005. i.e. AMIGO have very much weighted the vote in their favour. Now, whether the court won't like that or not... lets see! DYOR and look for your own interpretation. It's not always easy to think/understand 100% clearly when listening and typing! Going for fresh air!
Sara (Debt Camel) being told off for "piping up" in written comments and if she does it in court, she would be committing an offence. Says Gary said she would be able to speak and RPC have given inaccurate info. Court saying that has to be taken up with solicitors and because recording is ongoing, she could be in contempt by speaking now already. Court saying she will not be able to speak today at all. Formal application must be received and approved.
MSE Website believe claimants are most worried about fairness... Nothing really on classes for creditors though. Debt Camel concerns are distinction between borrowers and guarantors [already discussed] and outstanding and current loans [already addressed]. 2 points left on classes... RPC only reviewed 375 emails. Cut off on the 27th (assume march). Emails that have come in later don't say anything different on class issues (to paraphrase). Some emails think a borrower and guarantor could cancel each other out by voting different ways, which isn't fair as each stand to benefit differently (to paraphrase). RPC are saying there isn't more than want to draw attention to in terms of class. So, court is now taking a break for an hour and will resume at 2:05pm...
Comments regarding underlying fairness, so consumers are satisfied Judge has heard them: there are undoubtedly creditors who refinanced their loan with AMGO by borrowing from a 3rd party. The concern being some creditors will benefit more than others (those with an outstanding loan balance) and some will not have an existing loan for set off (those who refinanced elsewhere). Basically; an outstanding loan balance with AMGO is a 'better' position to be in for the scheme and the question is - is that fair? In that context [I am interpreting] that means they are asking to be treated as a different class. The next question is about why bond holders get their money back and why "only" 15% of future profits is "fair" for distribution. [mini breaks as the judge reads the emails]. QC is saying that this is not something that the court should consider today. This is for the later hearing. So, question is not to the court as to whether there is a fairer system. These emails are merely an example of complaints about fairness to be considered at the later hearing. [now looking at the report] what RPC did is to note they had a limited no. emails about class points, they had a number that raised other issues. Some have explained the substance of their underlying complaint, others give no detail. A number of concerns include: Amigo being "in control" of claims assessment process. Concern the no. claims upheld won't be as high as if it was an independent. Many of these questions have been answer by Amigo QC already [assume he means assessment mechanism, automating, manual checking] so creditors will have more clarity on the process after today on why it is fair, etc. All creditors will be treated the same under the scheme has been reiterated. More email examples from RPC - customers have found the practice letter/statement difficult to understand. Some emails suggest a misapprehension about what the SOA is and they are asking to join the "class action". RPC say that a contributing factor to receiving so few emails on 'class distinction' may be a difficulty in understanding the scheme letter and adequacy of information made available. However, it is reiterated further information can/will (i.e. Q&A) be made available going forwards. Now bringing up money saving expert and debt camel as sources of info....
QC recommending that they add answers to some of the customer's questions to the scheme website to support the explanatory statement if anyone is finding it hard to understand. Judge says explanatory statement needs to be sufficient on it's own terms but must be read in the context of details available elsewhere. QC says intention is to review all of customer comments and further Q&A material can then be produced. Over short adjournment, QC will take instructions on expanding the Q&A section but would not want to delay the process/date of the meeting. QC has nothing else to address the judge on at this stage. Independent scheme assessor now on. aims to assist judge and customers with the process. they review the emails setting out concerns raised by customers about the scheme and then to write a report and attend today to pass on the results of their review to 375 emails. 3 categories to discuss: class issue, procedural issues, other concerns. Fairness concerns are relevant but for today's purposes less important (for next hearing). Notably few emails that raise a class issue. "Hazard a guess" (Richard Fisher QC) that's because the scheme is relatively simple albeit some are confused as to how it works. 1st email identified by RPC as potentially raising class issue/concern... [judge reading it to himself]... Email suggests there may be a group of customers where sufficient information (older claims) still exists to support their claims. If they can't provide sufficient evidence then they are worried that they lose their rights (effectively). Question being that should these people be identified? 1 customer has had problems with AMGO providing old data as it has been anonymised under data protection (or something like that). However, this shouldn't be a huge group of customers who this applies to (i.e. they had 1 customer email that refers to the topic). Point being; should there be a class split based on who has info available and who doesn't. 2nd concern regarding class: based on 2 emails received - availability of set-off available to certain creditors might need a split. Commercial question being posed is are those who have set-off and those who would receive a cash payment 'different', thus should be treated differently.
QC stating to judge they feel this is fair and practical but this may be reviewed at the later hearing. Judge asking for available material that shows in broad terms the proportion of loans that were mis-sold. QC doesn't have it in front of him. He'll come back to it. However, company would need to do an enormous amount of work to get to an exact claim for each person and weight their vote to that. Thus, QC has put it to the judge that this is the way to do it and take into account the size of the claim to reflect the difference in claimants i.e. more votes for large claim. Would be unfair on the customer who paid a lot of interest if they only had the same vote as someone who had paid a very small amount. 5th point: explanatory statement. QC s statement is short and short for a reason as vast majority of scheme creditors are consumers and it needs to be as simple and accessible as possible. Judge has asked to have a look at it [toilet break for me]...
Voting value: at least 2 approaches that are undesirable or impractical. 1 - admit the creditor to vote weighted against their claim. AMGO may have as many as a million scheme creditors and the company would need a methodology to work all this out, which is time consuming and expensive and likely to give inconsistent results. 2 - could simply say all customers with redress claims are not accepted and they are accepted to vote at £1 each. Neither is appropriate as it makes no attempt to address the FOS claim as it would dwarf customers or (missed this a bit) which customers had larger claims. AMGO has proposed: assume all loans and guarantees were mis-sold and to admit scheme creditors for the amount they have paid. Idea is that every loan was mis-sold and work out what the amount of a customers claim would be on that assumption i.e. interest + cost paid - any loan outstanding. For guarantors it would be what they paid. AMGO believes this is reasonable and takes into account relative redress claims. e.g. £100 claim admitted for £100 worth of votes, £1000 for £1000 so voting weighted to claim size but everyone has an equal prospect to have their distribution from the SOA. [I know this is the important bit for many but struggling to keep up a touch]. [Think the concept is simple enough though]. QC submitted examples to the judge which he has in front of him.
AMGO has the right to repurchase debts so there is a small wrinkle in relation to some customers but it is not one that requires them to constitute a different class. [missed a bit there scrolling down]. Next point: borrowers who had loans >6yrs ago. Evidence says the company will consider loans back to 2005 regardless of any limitation period. Again, does not require another class (from QC). [basically - lots of arguments for why everyone should be considered in one class, if I miss anything being said]. AMGO will not take a limitation point/distinction for when borrowers took their loan out. Judge is saying this is an acknowledgment that in the alternative scenario (assume he means putting a time distinction in) would be to exclude the older loans due to a limitation period. [OPINION: the inference here being AMGO are opening it up wider than they had/have to]. AMGO can distinguish between borrowers and guarantors and some customers can be both. For voting value; some payments are not able to be allocated [not keeping up with this bit]. the judge asked if it would be possible to identify whether a vote could be attributed to a guarantor or borrower and the QC is saying that it can but some are both so it's not possible to always separate the two. Judge questioning it from the point of view of fairness. QC will go back and look at it all again. [Opinion: nothing sinister, just bringing out borrower's questions, you need to hear the tone i.e. fine/normal]. QC going through distribution of docs and timing of meeting. 10am weds 12th May - 6 weeks away. Intended creditors will be notified by 2nd April. 2nd concern; virtual meeting. given COVID-19 situation, proposed this meeting will be held virtually. A webcast and telephone facility is proposed to be provided. MS Teams/Zoom might have been preferred but there is a hard limit on the numbers who can join so wouldn't be fair. Webcast/telephone allows as many creditors to join as they want. Proposal is scheme creditors will be invited to pre-register and pre-submit questions so the chairman can identify common questions and prepare answers. 3rd aspect; online voting and proxies. AMGO has developed an online portal on the scheme website, which permits creditors to vote for or against until 5pm on 20th May 2021 and then the portal will be available for voting during the meeting. Scheme creditors can also nominate a proxy by form on the website: 5pm 10th May deadline for that. Judge asking about online voting after 10th May portal closure; is it right that their ability to attend is subject to the meeting chairman's discretion but the voting is a matter of right. Satisfied. No issues. Everyone has the right to vote before or during the meeting, not subject to chairman's discretion.
The scheme is concerned with net claims. It is right for guarantors that the amount they owe is likely to be nil since the loan wasn't advanced to them but the borrower. Both borrowers an guarantors will receive a pro-rata distribution in respect of the redress claim. One works out the claim, deducts what is owed and then both receive a pro rata distribution. 1 point picked up by customers: underlying redress regime is borrows have a claim for interest and costs but are obliged to repay the loan they received. If there is the situation where a guarantor has paid the principle, which is then repaid to the guarantor under the scheme; an issue may arise for the borrower. Does the borrowers liability for that part of the loan revive? Short answer is that the scheme will NOT revive this. This doesn't affect the guarantor and can only benefit the borrower. One practical point; it would be difficult to identify a clear, dividing line between the two classes. Would need to take into account how much the guarantor paid e.g. £1, £100, etc, etc. Position is different cases to case. Hence QC says distinction shouldn't be made and although there are fairness issues, the court shouldn't consider this today but later at the sanction hearing. Judge questioning differentiation/identification between borrowers and guarantors for voting. QC's understanding is there is no way to identify who is who in the vote. QC says there are two categories; those who have repaid their loan and those who haven't. Those without an outstanding balance will get a payment from the scheme. Those with a loan will get a set-off against their existing balance. Drawing a clear dividing line is very difficult as some have repaid in full, £1, £100, £1000, etc. Larger the loan, the greater the set-off. Sliding scale between them. AMGO say it does not require more than one class. If issues arrive, they are for the sanction hearing. third situation is borrowers who's loans have been sold to others. QC reminds the judge that the skilled person (I think, Mr Beale) says: under the scheme AMGO will pass redress back to claimant, even if their loan has been sold.
OPINION: This is how I see it TODAY... It appears that there are "no road blocks" TODAY. there would need to be a very good reason for the judge not to let it go to a vote and the FCA said the same, AS FAR AS I CAN TELL. Thanks for cross posting on ADVFN nicolaw. Ok, we're back... More incoming...
No need - it's as much for my benefit (I am invested), as yours. Appreciate others would have liked to have been on the call and would have likely done the same. I am NOT reporting opinion but trying to get things down in a summarised verbatim but I am no master typist. I don't work for anyone with any financial interest in anything and you all need to DYOR. If anyone else is on the call and sees me write something incorrectly - please call it out. Anything I am writing does NOT constitute advice in any way, shape or form and you must make your own investment decisions. Just trying to be helpful! As you can no doubt tell - I don't even have time to trade it myself so I am staying 'long' across it. If you want my opinion; I am feeling positive about THIS stage gate. QC is doing a good job.
All claimants would be considered unsecured creditors after bond holders etc. In an insolvency; if customer had a claim against amgo and amgo a claim (loan) to the customer, they would be set-off against each other. 4 potential differences between scheme creditors.... ok, break time! 5mins!
Clintek - what's that got to do with me reporting what is being said?!
QC has asked for a break - will be given (for 5mins) when the QC finishes. Moving onto class composition: does one need to divide the scheme creditors into different classes or is one sufficient? The law in the written argument doesn't need covering with the judge. COMPANY proposes a single meeting of creditors comprising redress creditors and FOS. Question is whether everyone can vote for a common interest. QC says what would happen if the scheme wasn't approved, which the evidence suggests would be administration, leaving no money for creditors. 2 parts to this. 1). estimated outcome statement on 2 scenarios in the case of insolvency. Scenarios differ in terms of length. start from £443M and consider 1). speed, 2). value. Scenario 1 would leave £312M, 2 £325M. Do not take into account costs (£37M) and what is owed to bond holders and securitisation trustee (£324M). Net result is it unfortunately would mean a shortfall for the creditors, hence why unsecured creditors wouldn't receive anything in this case. This evidence came from the company albeit a letter from PWC summarises that PWC will allow this letter to be distributed (i.e. to court and claimants) but has the usual disclaimer and that PWC have reviewed the assumptions made by management and they are "reasonable assumptions" in their view and have provided input to specific insolvency aspects, specifically to recovery prospects. PWC are engaged as AMGO financial advisors. As far as the substance of the report: PWC deal with the assumptions and confirm management have considered a 2yr insolvency period, which they have advised on. [sorry - difficult to follow this bit and type]. Report essentially divided into 2 pats 1). realisation of assets - conclusion; PWC say in the light of the above £312-325M is a reasonable estimate of total asset recovery. 2). creditor claims - consider management's approach to estimating claims is appropriate and they say in relation to costs; £29M for 2yr insolvency costs is reasonable, if not low (+£8M VAT). PWC conclusion is that they are satisfied that assumptions are ok and AMGO would have a shortfall to bond holders in the event of an insolvency.
FCA remains concerned about customers who would have valid claims but do not know about the scheme and could lose their rights if they miss the deadline. QC says the scheme needs a bar date and 6 months is reasonable. QC emphasises the FCA makes the point that any issues are for the sanction hearing and should not be a road block at this stage and creditors should be allowed to vote. Jurisdiction should take no time. There are no issues with international jurisdiction i.e. foreign company or enforcement abroad, etc
Judge is struggling to find the FCA letter [I think] in his bundle... Think he has just found it now... In summary FCA position is as follows: 1). FC does not support the scheme. 2). The FCA does not propose to take any additional regulatory action against the scheme IF the claimants vote it through. 3). FCA has identified certain concerns it would like to draw to the company and court attention. They don't intend to appear today to present. FCA state that they have been in regular discussions with AMGO and their legal team. AMGO have provided to FCA copies of the scheme docs, evidence, etc. FCA has made formal requests for additional info. FCA say it assesses the compatibility of the scheme, etc and the FCAs verdict is distinct from and broader than the courts . FCA has completed the assessment. FCA believe it is not in-line with their principles due to valid redress claims getting less than they would otherwise be owed. Also they are not completely happy with the methodology. However, FCA recognises that these concerns need to be balanced against what might happen if the scheme does not go ahead i.e. AMGO go bust and people won't be paid out [to paraphrase]. FCA does not consider this assessment should prevent company seeking a vote for the SOA and for the court assessment. The QC sees it that people will get less under a different methodology but FCA says these are for the company, court and creditors. The FCA do make some comment to the court assessment; 1). FCA is concerned by claims that secured creditors will not be compromised and will be kept whole i.e. they have priority in insolvency. QC points out they will be giving profits to claimants. 2). FCA points out that AMGO haven't given the adjudication approach, clearly. QC points out they have given the needed info as simply as possible. FCA says this is ultimately a matter for the court at the sanction hearing. 3). FCA notes any customer who has a claim will be able to vote on the scheme, whether a valid claim or not. i.e. AMGO are not taking into account who should be voting or not. FCA fairly acknowledges however this is the fairest approach and has been used in other schemes.
QC drawing attention to scheme responses from customers. The way the QC is proposing to deal with this is by continuing with his submissions in relation to the scheme first and then turn over to mr fisher in relation to the responses and then come back to the QC so he can't answer questions and observations from customers. Judge agrees. Only 2 points for the courts jurisdiction; is what is proposed 'ok' [to paraphrase] and secondly that customers will give up their claims to AMGO [assume after the SOA]. AMGO needs to avoid ricochet claims to survive. QC talking about road blocks from the court i.e. even if claimants vote for the scheme, whether the court would block it. 3 things to consider 1). deed poll company structure, 2). view of the FCA, 3). international jurisdiction. Authorities emphasise the use of this structure is not always fair [to paraphrase] but is not a road block and does not need to be addressed at the convening hearing [this one]. The scheme reduces disruption to AMGOs ongoing business and protects [paraphrase] bond holders. QC proposes to judge that this shouldn't be a road block but may be addressed at sanction hearing. 2). FCA has sent a letter it wishes to be brought to the attention of the court...
QC is stressing the figures are estimates because the total number of redress claims is as yet unknown. Matters his lordship needs to consider: Law relating to matters relevant to the hearing doesn't need to be discussed. First point that does is the timing of the letter and that all reasonable steps have been taken to get it in front of creditors and give them time to consider it. Letter was sent to 89% of scheme creditors, whose details were available. Failure rate was 0.9%. No details for 11% of scheme creditors. To deal with that adverts were placed in the Mirror and Mail on 29th January and practice statement letter made available on scheme website. Also, there has been a fair amount of press coverage. So, indirectly customers could have heard through those channels. QC saying steps to provide notice seem to have worked, considering the number who wanted to appear at this hearing. As far as the notice period is concerned; the rules don't need one but it should have sufficient time for creditors to understand, take advice and attend hearing. Letter was made available 8 weeks before today so, respectfully, this is considered appropriate. Proposal in essence is considered relatively simple and also it is important that AMGO's cashflow is such that they wouldn't be able to service their debts if the scheme is not dealt with sooner rather than later.
LOL - I wish I worked for JPM (maybe). I am not even in banking. I have nothing left in my ISA to buy more and nothing to sell. Went all in (above the price now), last week. No conspiracy theories, please. Doing this for the good of the board so haven't got time to argue with folk today :)