 From the presentation in relation to the litigation it was stated:
"Response: The press article you’re referring to discusses a summary judgment in relation to two loans made to the same borrower, who defaulted in March 2020. I think it’s important to note three key points:
First, there has been no question raised regarding the general enforceability of the loans and the personal guarantees. The case does not focus on that issue at all; rather, it concerns who holds the rights to the claim.
Second, this is a summary judgment, meaning there has been no final decision on the matter. The ruling simply indicates that the case warrants further discussion and will now proceed to court.
Third, it is also important to clarify that the debt sale in question relates to the sale of loans from an institutional investor on the platform to Azura. Funding Circle is facilitating the loans rather than selling any of our own loans.
As for the trial, we do not yet have confirmed dates, but we do not expect it to take place before September. We remain confident that Azura will be successful at trial. Given that proceedings are ongoing, there is little more we can say at this stage.
Question:
What happens to those loans? Do they go back to the institution, allowing them to enforce the personal guarantees, or do they come back to you? How does the logic of that process work?
Response:
I would refer back to what I mentioned earlier—there has been no question regarding the general enforceability of the loans or the personal guarantees. Given that proceedings are ongoing, it would not be appropriate to comment further at this stage."
========
Seems to me that a more direct response could have clarified whether Funding Circle maintains its right to enforce or if the rights transfer back to Funding Circle. The phrasing makes it appear that the intentionally avoiding stating who ultimately holds enforcement power. |
They have avoided in todays rns-buy back holding this else it may sink further |
I'm still out as well until we learn about the case. |
Still out too. Ending the buyback could be a problem. That's been keeping the share price afloat |
Woah ! Was there something a few minutes ago about the court case ? share price took a right tumble. |
Thanks carcosa. I've sent a copy of your question to the company. |
Carcosa how are you accessing the live presentation? The link provided in the results doesnt appear to work... |
No reference to court case so asked a question for today's presentation:
"Given the High Court's upcoming decision on the enforceability of personal guarantees associated with loans acquired by Azzurro Associates from Funding Circle, how does the company plan to address potential implications for its loan documentation processes and the overall enforceability of personal guarantees on its platform?" |
Results look decent |
Finals on Thursday. No news on the court case beforehand as far as I can see.
I'm still out. |
Low volume days and buybacks would on paper mean an appreciating share price. Not sure on the mechanics of that though, however sounds reasonable to assume. |
Ticking back up !! |
I believe the suggested date is in March. |
Does anyone know when the court case is going to take place? |
Don't think Metro bank is much to worry about, they lend off their own balance sheet so totally different business model and risk profile to FCH which is a platform facilitator of loans. |
Has there been another article? |
Metro bank is moving into FCH space,see Metro banks last statement. |
Even though the court case seems to be in favour of the company, there seems to be so much media speculation based on "what if's" rather than knowledge of what FCH does, I sold out first thing.
I'll wait until the case is settled and then see what the future brings.
GLA to current holders. |
Being able to buy at 92/93 for an hour after the RNS was as close to a sure thing as you will ever seeThat said, the company is pretty opaque. Richard Staveley of Rock wood communicates the business model much more clearly than FCH manage |
I saw some frankly ignorant discussion on Stockopedia on the day after the news article was published, i.e. the day of the price action. Some investors struggle with reading comprehension it seems. |
Well spotted Edmate, thanks. |
An ‘overreaction’ to a court case has opened up ‘more value’ at Funding Circle (FCH), according to Deutsche Bank.
Analyst Robert Noble reiterated his ‘buy’ recommendation and target price of 180p on the lending platform for small and medium-sized businesses, which was trading up 3.8% at 109.5p on Wednesday.
This follows a 16% fall earlier in the week after it was announced the High Court will hear Azzurro Associates’ claims that issues in Funding Circle’s documents and processes left the debt buyer unable to pursue small business owners over personal guarantees.
‘The case does not challenge the fact that the loans are valid, that the loan agreement was breached, nor that the personal guarantee is valid,’ said Noble.
‘As such, the negative share price reaction on the news looks overdone and we reiterate our “buy” recommendation on the stock.’
He said the sell-off was mostly due to the more than 300% increase in the share price in the last 12 months rather than the risk from the court case.
‘We see a further 70% upside [to the close post the 16% fall]…and see no reason to adjust our price target.’ |
Regarding the court case, it must be about privity of contract - where to take action under a contract you have to be a party to it.
To transfer rights, all parties need to agree or be notified and that is perhaps where it went wrong. The UK has centuries of legal precedent on contract law and I find it hard to believe the lawyers got it wrong. We'll find out in March I guess. |
Nah, there was some profit taking towards the close. 350k shares bought today, which is higher than the entire volume on Friday, so the buyback will mop up over the next few days. I see from the trades report quite a few £250k deal, none of which seemed to disturb the price. |
Edging up quietly in the final hour.
4:25pm EDIT: Or maybe not! |
Register for streaming realtime charts, analysis tools, and prices.
Hot Features
Premium
