Amigo Share Discussion Threads

[spirito] 30/3/2021 12:45

So pwc have done the numbers and not enough to cover bond holders, never mind redress. I think this is just about the structure of the SoA than whether it will be approved. Required revisions likely

[chinese investor] 30/3/2021 12:35

They are now considering borrowers having more than one vote depending on their circumstances !
i.e. "weight their votes"

Chinese Investor (AMGO) 27 Feb 2021 - 10:01:57
So one million borrowers and guarantors will be eligible to vote for "the Scheme".
Most of them know that have no chance of redress so they'll vote for it because they have nothing to lose.
Amigo will get their 75% !
In the ensuing six month "negotiating" period, legitimate claimants will get a fraction of what they would have got if there had been no "Scheme" and...
...those who had "no chance of redress" will get nothing !
The courts and FCA can see this and will not approve the "Scheme" in the proposed form.

[nicolaw] 30/3/2021 12:34

ISA-Investor

Posts: 90

Price: 16.02

No Opinion

RE: Update from the courtToday 12:31
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]...

[nicolaw] 30/3/2021 12:26

ISA-Investor

Posts: 90

Price: 16.08

No Opinion

RE: Update from the courtToday 12:25
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.

[nicolaw] 30/3/2021 12:23

ISA-Investor

Posts: 90

Price: 16.08

No Opinion

RE: Update from the courtToday 12:19
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.

[samsung2020] 30/3/2021 12:18

Yes pls, updates are superb, thanks

[heatseek77] 30/3/2021 12:18

also GJ, MC trying to get resolution, on the move up again

[7rademark] 30/3/2021 12:15

This case just goes to show what a complete mess amigo have made of things, so close to administration but still a slim chance of turning things around.

[heatseek77] 30/3/2021 12:12

updates appreciated nicolaw not a LSEr

[brocksford] 30/3/2021 12:12

Keep updating Nico, much appreciated

[nicolaw] 30/3/2021 12:12

ISA-Investor

Posts: 90

Price: 15.00

No Opinion

RE: Update from the courtToday 12:05
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.

[nicolaw] 30/3/2021 12:11

Not sure if you want me to keep posting updates as it is on LSE anyway... but this is the latest, please post if yo uwant me to stop ISA investor from LSe updates as technicaly duplicated here and LSe then...

[brocksford] 30/3/2021 11:53

Ticking up now though!

[brocksford] 30/3/2021 11:53

give it time, a positive result at Court will get us there

[samsung2020] 30/3/2021 11:50

Yes I must admit I'm baffled why we are not seeing at least 16-18 range

[nicolaw] 30/3/2021 11:47

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.

[nicolaw] 30/3/2021 11:44

yep, not sure why share price isnt flying yet...

[samsung2020] 30/3/2021 11:44

Sounds positive thus far

[nicolaw] 30/3/2021 11:39

just copied from lse so cant take the credit! here is the latest one...

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

[ivorytowers] 30/3/2021 11:37

Looks objectively balanced well in our favour.

[samsung2020] 30/3/2021 11:36

Thanks mate, super useful update

[nicolaw] 30/3/2021 11:33

fro misa investor on lse:
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.

[nicolaw] 30/3/2021 11:32

prob linked to this and then boucned back again...

[samsung2020] 30/3/2021 11:30

Yeh was weird drop but corrected within about 2mins.... The spread at times is huge.