240 Great Clowes Street part 1

Since Q1 2011, a number of houses have been pushed/offered up to investors by Liam Collins, Joe Sinagoga & Robert Wakefield. If you were offered a house, please send me the details (date offered, address, price, and the advertising material that was sent to you) so that the property can be checked out.

This article was previously entitled "Dereham Investments Ltd - 240 Great Clowes Street", and has been updated following information provided by Warren Kaye, director of property services at O'Neill Patient Solicitors LLP, and who acts on behalf of Dereham Investments Ltd. It is the story of one such property that was offered to a large PN investor in Q1 2011:

240 Great Clowes Street,
Salford, Manchester, M7 2DY

This property was on sale for 245k GBP with the contact details specified as:

contact number: 0845 556 1257
contact name: Liam Collins
website: www.castleandgatehouse.com
address: eastern villa, station road north, forest hall, newcastle upon tyne, NE12 9AE

The property was described as:

• Fully decorated to high specification
• Brand new kitchen with high gloss
• Bathroom with limestone effect tiles
• Newly plastered throughout
• Re-wired
• New boiler
• New windows
• Fully furnished throughout
• White goods included
• etc.

i.e. the property was advertised as having been already fully renovated. Fortunately, the investor that this property was offered to (likely one of a number) declined, and it was subsequently sold for 182k GBP on May 11th. That this sale occurred not even 2 months after it was offered to the investor for 245k GBP was suspicious to say the least. So I checked the Land Registry:

Title Number :LA231053
Address of Property :240 Great Clowes Street, Salford (M7 2DY)
Price Stated :£182,000
Registered Owner(s) :DEREHAM INVESTMENTS LIMITED (incorporated in Isle of Man)(UK Regn. No. 45471) of Aston House, 19 Peel Road, Douglas, Isle of Man IM1 4LS and care of O'Neill Patient Solicitors LLP (Ref: WK), Chester House, 2 Chester Road, Hazel Grove, Stockport SK7 5NT.
Lender(s) :Castle & Gatehouse Limited

Note the lender - Castle & Gatehouse Ltd.

When I checked the Isle of Man equivalent of Companies House (http://www.gov.im/ded/companies/companiesregistry.xml) records for Dereham Investments Ltd, their records confirm Castle & Gatehouse Ltd as the lender and describes the transaction as follows:

Date of charge: 9th May 2011
Description: Legal charge
Amount secured by the Mortgage or Charge: All obligations owed to the Lender by the Borrower contained in a joint venture agreement dated 31st March 2011.

Warren Kaye explained the situation as follows. When Dereham Investments Ltd purchased the property it had most certainly not been renovated, hence the lower purchase price - it reflected the value of the property on the open market at the time of purchase. Castle & Gatehouse Ltd had sourced the property and were responsible for renovating it and finding a buyer for it afterwards. As part of the JV arrangement, Dereham Investments Ltd footed the bill for all the renovations. The charge on the property in Castle & Gatehouse Ltd's favour to the tune of 182k GBP was for their share of the profits in the JV once the property had been renovated and sold. However, Castle & Gatehouse Ltd failed to sell the property within the first 6 months of the JV and so are no longer entitled to any share in the profits when the property is subsequently sold and, as such, the charge is in the process of being removed.

So there is nothing suspicious in this transaction. And I suspect that the other properties that have so far come to light since this blog entry was originally posted will prove to be the same kind of arrangement. Evidently the sales team in Castle & Gatehouse Ltd/Collins & Bone Partnership were resolved to milk the investor base for all they could get.

It does of course leave two questions remaining for the partners to answer:

• Why would the likes of Liam Collins and "the board" members be trying to sell JV based properties to holders of PNs that the partners were already in default of? Toxic PNs could not be used to offset the purchase, in whole or in part, of such properties as that would constitute preferential payment of PNs. So the only possibility is that they expected investors to do a JV with them, and for the partnership's share of the profits to be offset against the toxic PNs.

• Why was Liam Collins pushing a property owned by Castle & Gatehouse Ltd, a company that he has for many many months now tried to distance the Collins & Bone Partnership from?

The Editor

Data Protection Act 1998 violations

Many of you will have received e-mails and/or phone calls over the past 10 days from the partners and their cohorts expressing the views of other investors/getting you to see their point of view.

march 21st 2012 to the partners and their cohorts (Joe S. & Robert W.)
[ewart]: OK guys, this is getting rediculous. I have been out of the office much of the day and return home to find my inbox stuffed full with the opinions of other investors that I don't care much for reading, just as they don't care to read my blog. This is a total mis-use of e-mail addresses that investors have registered with you for the purposes of being more readily informed of the state of their investments - they are not there to be used to push the views of other investors. If you want to advertise the views of investors, you already have a blog set up which you have used for this very purpose in the past and which works just fine. So use it before this issue gets out of hand.

march 22nd 2012 response from Liam Collins
[Liam]: Just block my address if you do not wish to read them. It is very simple. All news you need you will find on The George’s Blog apparently.

Liam Collins, of course, in his reply totally missed the point. In order to wage this war, the partners and their cohorts are leveraging personal data that investors supplied to them when they took out their investment - this is your data! What they fail to realise is that the data they are leveraging, and the processing they are performing on it, are clear violations of the Data Protection Act 1998 (http://www.legislation.gov.uk/ukpga/1998/29/contents), the appropriate portions of which I have cut-and-pasted below.

I have sent an e-mail to the partners and their cohorts today 25/03/2012 (see below) on behalf of all investors making them fully aware that what they are doing is a clear breach of the Data Protection Act, and that it is to stop now - I have given them a grace period of 1 week to comply (i.e. until end April 1st, April Fools Day). People like Joe Sinagoga and Robert Wakefield should not even have access to your personal data unless you have given your express permission for them to have it ... and this is clearly not the case for a good number of investors.

Unless I get a positive acknowledgment from them that this behaviour will stop forthwith, I would suggest that investors who want to be left in peace make a formalised request (and keep a copy in your records) that clearly specifies the grace period (a few days should be quite sufficient) for the partners and their cohorts to purge all knowledge of your e-mail address(es) and/or phone number(s) from their systems. After the grace period has elapsed, configure a filter on your e-mail browser to auto-delete all e-mails you receive from them. It is appreciated that this will cause extra work for the partners and their cohorts as all pertinent correspondence they will now have to convey to you via other means (e.g. post, web-site),  but it will be a situation that they consciously brought upon themselves by not being able to act responsibly.

If after doing this you are still being pestered, let me know the details along with a copy of your formalised request and I will track all such violations so that when this partnership goes into bankruptcy, all the cases of violation of the Data Protection Act, even after they have been warned, can be formally reported.

The Editor

=======================================

Pertinent sections of the Data Protection Act 1998

Right to prevent processing likely to cause damage or distress.

(1)Subject to subsection (2), an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, any personal data in respect of which he is the data subject, on the ground that, for specified reasons—

(a)the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and

(b)that damage or distress is or would be unwarranted.

(2)Subsection (1) does not apply—

(a)in a case where any of the conditions in paragraphs 1 to 4 of Schedule 2 is met, or

(b)in such other cases as may be prescribed by the [F1 Secretary of State] by order.

SCHEDULE 2
Conditions relevant for purposes of the first principle processing of any personal data

1The data subject has given his consent to the processing.
2The processing is necessary—

(a)for the performance of a contract to which the data subject is a party, or
(b)for the taking of steps at the request of the data subject with a view to entering into a contract.

3The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract.
4The processing is necessary in order to protect the vital interests of the data subject.
5The processing is necessary—

(a)for the administration of justice,
[F1(aa)for the exercise of any functions of either House of Parliament,]
(b)for the exercise of any functions conferred on any person by or under any enactment,
(c)for the exercise of any functions of the Crown, a Minister of the Crown or a government department, or
(d)for the exercise of any other functions of a public nature exercised in the public interest by any person.

=======================================

From: ewart tempest <ewart.tempest@gmail.com>
Date: Sun, Mar 25, 2012 at 10:07 AM
Subject: Data Protection Act violations
To: Liam Collins <liam@collinsandbone.com>, joe@sgaml.co.uk, robert@wysi.co.uk, Robert Wakefield <robert.wakefield@wysi.co.uk>, davidbone@castleandgatehouse.co.uk, Rachael <rachael@collinsandbone.com>, Rachael Bone <rachaelbone@castleandgatehouse.com>
Cc: ewart tempest <ewart.tempest@gmail.com>

Data Protection Act 1998

I will give you a grace period up until the end of April 1st 2012 to comply with the texts below, and to confirm in writing.

Rachael/Liam - relay to David Bone Jnr as his Castle & Gatehouse e-mail address no longer works.

This is to notify you that the activities that you have been performing wrt using personal investor data for propaganda purposes, with the proliferous sending of e-mails and phone calls expressing the views of other investors who share your views, is a violation of this act and total mis-use of investor data, and can in no way be construed as as "reasonable processing" by the act (I have cut-and-pasted the pertinent sections of the act at the end of this e-mail). On behalf of all investors, you are told to refrain from using investor data for this kind of processing unless investors have specifically registered with you for it ... in the interim you can use http://collinsboneinvestment.blogspot.ca as your propaganda vehicle.

Joe Sinagoga and Robert Wakefield, you should only have access to investor personal data for investors who have specifically given their permission for you to have it ... and this is clearly not the case for a good number of investors. So, Joe Sinagoga & Robert Wakefield, you are hereby told to delete all investor personal details in your possession other than for those investors who have given you express written permission to have it.

More information can be found at www.collins-and-bone.blogspot.com "Data Protection Act 1998 violations" article (to be posted end of 25/3/2012).

Ewart

Pertinent sections of the Data Protection Act 1998

Right to prevent processing likely to cause damage or distress.

(1)Subject to subsection (2), an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, any personal data in respect of which he is the data subject, on the ground that, for specified reasons—

(a)the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and

(b)that damage or distress is or would be unwarranted.

(2)Subsection (1) does not apply—

(a)in a case where any of the conditions in paragraphs 1 to 4 of Schedule 2 is met, or

(b)in such other cases as may be prescribed by the [F1 Secretary of State] by order.

SCHEDULE 2
Conditions relevant for purposes of the first principle processing of any personal data

1) The data subject has given his consent to the processing.
2) The processing is necessary—

(a) for the performance of a contract to which the data subject is a party, or
(b) for the taking of steps at the request of the data subject with a view to entering into a contract.

3) The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract.
4) The processing is necessary in order to protect the vital interests of the data subject.
5) The processing is necessary—

(a) for the administration of justice,
[F1(aa) for the exercise of any functions of either House of Parliament,]
(b) for the exercise of any functions conferred on any person by or under any enactment,
(c) for the exercise of any functions of the Crown, a Minister of the Crown or a government department, or
(d) for the exercise of any other functions of a public nature exercised in the public interest by any person.

OK, who squealed? Liam now knows ...

Given all the pointless e-mails Liam Collins has been forwarding expressing the views of investors in the pro-IVA camp, it is clear that the majority of these investors don't read this blog ... because if they did, they would have connected all the dots wrt Liam Collins' latest literary masterpiece below. Since the pro-IVA camp are obviously not out to educate themselves, and because the e-mail gave me such a laugh , I'll help you do so this once ....

• The blog entry "C&B assets - negative equity" was published 3/3/2012, that's nearly 3 weeks ago. If you bothered to read it, it was explained that 15a Moira Street (Loughborough), the property that Liam Collins is referring to below, was repossessed by the mortgage lender sometime in Q3/early Q4 2011 for obvious reasons ... the partners were not keeping up with their mortgage payments.
• The property was subsequently put up for sale through a local estate agent, asking price ~52k GBP. It eventually sold for a higher value (you can look up the price it sold for yourselves) to an ex-CBS investor in a bidding war i.e. above market price was paid for the property. The sale was concluded in November 2011. The current estimated value of this property using Liam Collin's favourite asset pricing web-site, www.mouseprice.co.uk, is 51k GBP i.e. the investor has made a loss purchasing this property to date. But get this, the asset price in C&Bs own property spreadsheet was 90k GBP, and the outstanding mortgage on the property was 98,050 GBP!
• The request to sign 5 year PNs was sent out to C&B investors November 4th 2011, the IFS blog was not created until November 14th 2011 ... and this blog not until 11/02/2012. Clearly the repossession of 15a Moira Street and its' subsequent purchase by an ex-CBS investor who we, the bloggers, didn't even know at the time, were totally unrelated. Liam Collins will of course continue to try and fit a square peg into a round hole (l  > sqrt(2*r^2)) ... and I am quite content to leave him trying!
• C&B have a proven track record of over-estimating the values of their assets ... this is one of the reasons why their assets are hugely in negative equity today, with mortgages far higher than the properties are worth.
• The legal responsibility of any IVA practitioner or bankruptcy trustee is to maximise the return to creditors. Maybe Liam Collins can get away with selling C&B assets to "loyal investors", friends and family members below asset value .... but an IVA practitioner/bankruptcy trustee most certainly cannot. The idea is preposterous!
   

The Editor

----- Forwarded Message -----
From: Liam Collins <liam@collinsandbone.com>
To: Liam Collins <liam@collinsandbone.com>
Sent: <22nd March 2012>
Subject: COLLINSBONE - URGENT - PLEASE READ.

Dear all,

We are writing to you all again this morning with some potentially alarming information.

A number of you have been wondering for some time why Sally and Jasmine George, and the handful of people supporting them, have been so insistent that bankruptcy is better than an IVA, when bankruptcy made no commercial sense.

We may have found the answer:

It would appear that the blog writers (and supporters) are looking to push for bankruptcy in order to benefit from the portfolio themselves. Maybe they feel that they can purchase the properties at a reduced price once we are made bankrupt!!!

We have evidence that one of their supporters has already done this. One of our properties (mortgaged with the Coventry building society) which we had re-possessed last year has been purchased in a ‘fire sale’ at a vastly reduced price (around half of what the property was purchased for, the shortfall of which is still a collinsbone debt and will form part of the IVA) by one of Sally and Jasmine's supporters. Coincidence? I don’t think so!

This person has confirmed only last night that he 'has a man ready to take control of the portfolio when we are made bankrupt'.

Will he be sharing out the portfolio among the investors? I will leave you to draw your own conclusions.

We already have Sally and Jasmine's email to us which states it will cost us £15,500 to stop them writing the blog etc. We were assured of their 'best efforts' to help us to fix our relations with our investors if we paid them this, yet  one of the blog's main supporters, an ex-CBS investor, is waiting in the wings to step in and take control of everything ! 

Just who is pulling the strings here ?

The blog claims they are doing this to 'bring us to justice' and to 'stop future investors being hurt as they had'. It would appear their crusade had a price. It was £15,500 in Sally and Jasmine's case (in other words, once they had their money, to Hell with the 'justice' and 'protection' for others).

The man  who has purchased the re-possessed asset even states on their blog how much respect he has for Sally and Jasmine for protecting other investors!!!).

We ask you again?

WHO ARE THEY DOING THIS FOR? IT WOULD APPEAR THE TACTIC WOULD BE TURN EVERYONE AGAINST AN IVA, FORCE BANKRUPTCY AND THEN PURCHASE THE ASSETS.

To be absolutely clear:

• We have it in writing from Mortgage Express that the properties will IMMEDIATELY be placed with LPA receivers upon bankruptcy.
• We urge you to do a quick Google search on Mortgage Express LPA and see what comes up, you will see perfectly good tenants forced out and boarded up properties, all backed up by this article in the Mail on Sunday a couple of weeks ago: http://www.fmwf.com/media-type/news/2012/02/emergency-bank-overseeing-northern-rock-and-bradford-bingley-mortgages-treating-landlord-borrowers-unfairly/ THIS WILL NOT BENEFIT INVESTORS AT ALL!
• There are claims that bankruptcy is the only way for a full investigation to take place, this is absolute nonsense, an investigation will happen anyway if it is going to, as you have all read, we have contacted all relevant regulatory boards etc. If you have were not aware of this already you can read about it here: http://collinsboneinvestment.blogspot.co.uk/2012/02/further-responses-to-sally-and-jasmines.html

As you may be aware, the hearing has now been adjourned again until early May, we still believe an IVA is the best way forward for all concerned and will be workign towards this. An IVA means the assets will essentially be held in trust for ALL investors and sold after 5 years, without the threat of LPA.

If anybody has any questions at all, please get in touch, If you wish to support an IVA then please let us know in an email as soon as possible.

Kind Regards,

Liam and David.

Dear Goebbels

Dear Goebbels,

The blogs may have started out as a small group of investors, but that is most certainly not the case now, so to continually be targetting "the Georges" doesn't reflect reality. One of the key purposes of the blogs is to hold the partners to account. Have you not read any of the blog entries??? Once bankruptcy has been declared, a good number of investors will be following through with criminal charges - the partners will most certainly not be getting away "Scott free" as you put it.

As you are so supportive of the partners, and optimisitc of the returns via an IVA yet with no factual basis for being so, may I suggest that in the 2-3 days left you try to articulate the factual basis for your optimism in an IVA approach, the publishing of rental data, and explain what happened to the following properties:

    2 abbeycroft close
    24 carnarvon
    56 beckford court
    30 peacock avenue

In March 2010, the following texts were sent by Liam Collins to an investor as part of the fore-play to a major PN investment made by that investor:

[Liam]: The promissory note acts as a legal personal guarantee from myself and the Collins Bone Partnership including all partners for your investment. All of our personal assets including 74 personal student properties and our own homes is held in the partnership.

So whilst you do some digging around the above 4 properties, can you also investigate these 74 properties and explain to investors where the (74 - 24) properties have also gone!

Making public to 3rd-parties investment particulars without their permission is a violation of the Data Protection Act. ... I have warned you about this before. Moreover, how much the Georges invested is completely irrelevant - what is relevant is the GBP value of the debt owed to anti-IVA group members, which obviously you now have a handle on otherwise you would not be sending out the e-mail below.

The Editor

----- Forwarded Message -----
From: Robert Wakefield <robert@wysi.co.uk>
To: <investor>
Sent: <20th March 2012>
Subject: Collins & Bone

Dear fellow investor,

I understand you are either undecided or against Liam Collins & David Bone being allowed to enter into an IVA regarding their current debt to investors of about £4 million.

As I see it, bankruptcy will result in only one thing: the debt being wiped, none of us ever seeing a penny of our money again and Collins and Bone being allowed to walk away Scott free. Have I got the wrong end of the stick? Am I missing something?

Surely, an IVA gives us all (the creditors) a chance of seeing some of our money back one day - even if that day might not be today? Even if there is no chance right now of ever getting our money back, are we not better to wait till property values increase and see what the portfolio of houses might fetch in 2-5 years?

Unless I am very much mistaken, it seems there is a small splinter group of investors who are determined to ruin everything for everyone by acting without having properly understood what bankruptcy for Collins & Bone will mean for us all. Actually, I find it very selfish. Maybe you do too?

I have heard it mooted recently that an IVA would only allow Liam Collins and David Bone to "carry on exactly as before" (whatever that is supposed to mean); this is absolutely incorrect. The whole point of entering into an IVA is that the IVA practitioner (rather like the role of an administrator in an insolvency matter) takes full financial control of the assets, income and liabilities of the debtors.

I have personally seen the balance sheets, and I've seen the mortgage debt on the properties: please let me reassure you that there is not a hope in Hell of any of us seeing a single penny of our money back if Collins & Bone are forced into bankruptcy.

May I ask you this: if (quite understandably) you are sick and tired of the whole C&B meleé, and you would rather have closure, would you please consider your fellow investors, some of whom stand to lose their entire life savings in the event of C&B bankruptcy. Is this what you really want? If not, please help your fellow investors and vote 'YES' to an IVA today.

If, again totally understandably, you even hate the sound of 'Collins' or 'Bone', do you really want to let these two off the hook for good? If so, vote against the IVA and for bankruptcy, because that is exactly what your vote will do. They can then stick two fingers up at us all and walk off into the sunset. Is that fair? I don't think so. Nor is it what Collins & Bone want to do either, I might add.

If you know something that I don't, would you please tell me? I am just an investor (like you), but one who has always believed that working with them and not against them is our smartest choice. Supporting any petition for bankruptcy might give you some satisfaction, but it certainly isn't smart, and you will not see a penny from it. Mark my words.

I would like to end this email by pointing out that the two misguided women who have been so determined to ruin our chances are (together) owed £15,000 (out of a total £4 MILLION). Perhaps they can afford to wave goodbye to £15,000? I wonder if they would have behaved in the same way if they were owed the whole £4 million (as collectively we all are)?

Kind regards,

Robert Wakefield

Take on latest C&B property spreadsheet

The latest spreadsheet from Liam Collins still contains no rental or mortgage interest rate/terms & conditions information, and of the 27 properties listed:

• 3 of these were not on the "C&B assets - negative equity" property spreadsheet, and have as the beneficiary Iqbal Singh (a former business partner of Liam's).
• 4 that were on the "C&B assets - negative equity" property spreadsheet are no longer there (2 abbeycroft close, 24 carnarvon, 56 beckford court, 30 peacock avenue). The first three of these 4 had positive equity, so what happened to them?

So basically we're now down to 24 assets from which, over an IVA term, it is proposed that (~4m GBP debt + average ~448k GBP of negative equity) be paid off 100p in the GBP. Or, put another way, each property needs to generate ~37k GBP each and every year for 5 years via

• after-tax, after-mortgage payment & after-maintenance rent monies

and/or

• increases in underlying asset value.

This is not going to happen ... it is totally unrealistic!

If you compare the mortgages in this new property spreadsheet with the "C&B assets - negative equity" property spreadsheet, you will see that some of the outstanding mortgages on the properties have declined by 1/2k - 1k GBP, but the mortgage on 25 Shelton Street has increased 6k GBP, so the total outstanding mortgage balance across the properties has remained pretty much the same.

The Editor

Expert comments on LC anti-IVA group e-mail

We had the e-mail sent by Liam Collins on 15 March 2012 to the anti-IVA group sent to a person who is both an IVA practitioner and a bankruptcy trustee for comment, as some of the statements were concerning, and we wanted to get clarification. See indented [expert] comments below in bold.

The Editor

From: Liam Collins <liam@collinsandbone.com>
Date: Thu, Mar 15, 2012 at 2:45 PM
Subject:
To: Liam Collins <liam@collinsandbone.com>

Dear Investors,

I am writing to let you know that today’s court hearing was adjourned for 7 days. This is to allow us time to show evidence to the judge that we have many investors who oppose the bankruptcy.  This email has only gone to the people who we believe oppose the bankruptcy.

We will be calling each of you next week so that you understand exactly the situation which I will outline below in bullet points.

1.       For those intent on pursuing criminal allegations an IVA will not protect us from that. You can continue to do this for as long as you wish.

[expert]: That is correct although they won’t have the benefit of a trustee’s investigative powers to assist.

2.       Bankruptcy will lead to all Mortgage Express going to LPA receivers. A trustee will NOT be appointed for the estate as MX do not allow it.

[expert]: This is highly likely, although I am not sure what equity there is to protect.

3.       Properties are the only assets C&B own

4.       Properties will be rented out and all income will go to MX NOT to creditors.

[expert]: This will cover mortgage costs and LPA costs so no detriment to the creditors as this will happen in both scenario’s (IVA or bankruptcy).

5.       Those properties which lose tenants as a result of change of management will be boarded up, NOT advertised.

[expert]: Who knows!

6.       We do not have money in off shore accounts which will be found and split between investor

7.       We do not have anything which can be sold to generate income for investors.

8.       Under new bankruptcy laws as of January last year I will be permitted to live in my own personal property as will David if he is made bankrupt and a charge will be placed over the asset equivalent to the equity.

[expert]: They have occupational rights for a year, then creditors interests prevail.

9.       At present when you take into consideration restrictions and interest in my own home it has no equity at all even when taking valuations from 3 online comparable sites and a RICS survey.

10.   In bankruptcy I will lose all debt to my name, I will be allowed to keep my home and live in it. I will lose houses which are not going to have any equity for at least 3-5 years and rental income is only now starting to pick up. I have made no money from our assets for over 3 years so I will not miss any rental income.

11.   In bankruptcy the receivers will offer a third party of ours choice to buy the assets out for a small fee meaning someone unrelated to me would be able to buy them for a tiny amount and could then gift them back to me at a later day. YES WE DO HAVE MANY CLEVER WAYS WE COULD KEEP THESE ASSETS AND INCOME FOR OURSELVES!

[expert]: Any trustee has an obligation to obtain the best price for his equitable interest. This can be from any third party and is NOT the choice of the bankrupt.

It is time for you all to realise, there has never been bad intent only incompetence and as I say if you wish to pursue criminal allegations you are within your rights to do so.  THE IVA IS FOR YOU ALL NOT FOR US!  YOU CANNOT PUNISH US BY BANKRUPTING US. It is crazy to think you can when you look at the above points but you can punish 130 investors who have hard earned cash like yourselves tied up in this and all like yourselves would like to see some or all of this returned.

I am not unrealistic to think that we will be able to pay 100p in the pound over 5 years but we are offering that. What we are saying is this. The houses are yours, you and MX have the rental income then in 5 years sell them and whatever materialised you keep between yourselves.  Or you could take the emotional irrational Ewart Tempest Georges route, bankrupt us, get nothing wipe the slate. And then what........

Please let me know if bankruptcy is the absolute route you are supporting as there is little point in being covert I will find out in 7 days anyway but at least this way we can gauge whether we have a chance. Remember even if we achieve a 75% vote we still have to get MX to agree with this which is still unlikely but we have to try.  IF MX say no, we are bankrupt anyway.

Liam.

"pro-IVA group" - educate yourselves!!!

Unlike the C&B partners' exploitative use of investor contact details for their own selfish ends, the investors who operate the following blogs:

• http://collins-bone-investors.blogspot.com/ (IFS blog)
• www.collins-and-bone.blogspot.com (this blog)

rely on getting the message out purely based on investors locating their blogs, reading the material, and sharing information with us. The vast majority of the information we gather is posted on the blogs for all to see ... we want to make sure that investors are as educated as they can be on the current state of affairs given the lack of pertinent information and accountability from the partners. If you want to know more, then you can get in touch through the respective blogs.

In relation to the adjourned bankruptcy hearing of Liam Collins on 15th March, and the subsequernt e-mails he sent out to what he believes are the respective anti-IVA and pro-IVA groups, all that I ask is that investors who are not already members of the anti-IVA group read the following articles in the order listed below on the IFS Blog www.collins-and-bone.blogspot.com to better educate themselves:

C&B assets - negative equity
Vote no to any IVA proposal
Liam's plea to wait for an IVA proposal
Liam's bankruptcy hearing & subsequent e-mails

The stance of the anti-IVA group is that no investor should sign-up to the ridiculous request made by Liam Collins below to support an IVA proposal when the most fundamental information of the current state of the business on which any such decision would be based has not been made available:

As a holder of a PN that C&B has long been in default of, you have a right to have access to the information being requested in these blog entries - you cannot properly engage an IVA practitioner without it! If Liam Collins wants to avoid being made bankrupt on March 22nd (he was only given a one week adjournment on the pretence of some issues that he needed to sort out with Mortgage Express - from the e-mails he sent out on March 15th it is evident that he has far, far more important issues to sort out), this information has to be made available to ALL INVESTORS. What the partners above are effectively asking investors to do is to support/show willingness to support an IVA proposal with zero information provided  (the texts themselves are not even clear as to what they are asking you to sign up to!). It is both your duty and your right to hold them to account.

I (name), confirm I am in favour of Liam Collins' (of the CollinsBone partnership) proposal to protect my investment via an IVA. I do not believe bankruptcy is beneficial to anybody. My investment currently stands at (amount) and I will firmly support an IVA proposal.

The Editor

Liam's bankruptcy hearing & subsequent e-mails

As you are all aware, today Liam Collins had his 2nd bankruptcy hearing adjourned. Liam Collins had asked for an adjournment of 6 weeks to get an IVA proposal together ... the judge, very frustrated with the slowness of the bankruptcy proceedings, gave Liam Collins just 1 week - he has his next bankruptcy hearing on 22nd March. During the hearing, a number of statements from investors fully supporting the bankrupting of Liam Collins were read aloud ... and I suspect mine was one of them. Liam Collins has sent out two e-mails today, one to a group of investors who he believes may be supportive of an IVA, and the other to the group of investors who he believes/knows will not support an IVA. Both these e-mails are listed below.

On March 1st, I had the following dialogue with Liam Collins:

[ewart]: Since you have to have the information at hand now in order to be engaging an IVA practitioner, can you send me the latest C&B property spreadsheet with valuations, along with an indication of when the valuations were performed and by whom. You will see from the article I have written on my blog that on the currently IFS posted C&B property spreadsheet I have little or no faith in the current valuations. This statement is based on the fair market price that 15a Moira Street was sold for versus the valuation price on the spreadsheet - they were very different (54k vs 90k respectively)!

[Liam]: You will be sent a full proposal with all info you need and you can either vote in favour of it or against it but make no mistake about it this is the last chance to get any cash back and it will work so long as we can convince Mortgage Express but right now we need you guys onside petitioning to get MX to agree not grouping together to see us put behind bars. That may give some satisfaction to some people but it takes up to 3 years for an investigation into our company and up to 2 years after that for us to defend it. At which time the IVA would be done finished and assets sold and at that time you would also be close to knowing where we stand with regards to what we are being accused of.

And in the blog entry entitled "Liam's plea to wait for an IVA proposal" posted 13/03/2012, I threw down the gauntlet again to the partners to make available to all investors this very basic information. I got the same answer:

[Liam]: Ewart the information you are asking is exactly what will be in the IVA proposal.  So once you have had a look at the proposal you will then decide whether it makes commercial sense or not right? You seem to want to end this via bankruptcy before you even get a chance to see a proposal? Am I right in thinking this?

[ewart]: This will not be good enough. You should readily have this information at hand ... if you haven't, it means you don't have a clue on the current state of the business.

Today (15/03/2012), after his bankruptcy hearing, I get an e-mail from Liam Collins stating:

[Liam]: I have it all to hand in front of me as we speak. It will all be in a proposal but without you showing willing to actually sign an IVA there is a chance we will not get an adjournment next week in order to do an IVA.

[ewart]: So, e-mail it out to everyone, what are you waiting for ... it is the most basic of information that all investors need at this stage.

So far he has not done so. Until the partners supply the information requested in the  "Liam's plea to wait for an IVA proposal" blog entry, the reasonable assumption is that the value in the portfolio is 0, and that it will be 0 at the end of any IVA term (largely born out in the anti-IVA e-mail texts as it happens) ... otherwise, rest assured, the figures would have been made available in a heartbeat. The partners have driven the business into the ground, and from the texts below I don't even think they have an IVA practitioner lined up (but please feel free to correct me by supplying the name & address of the IVA practitioner).

Lastly, I just want to comment on some points that Liam Collins made in the e-mail to the anti-IVA camp:

For those intent on pursuing criminal allegations an IVA will not protect us from that. You can continue to do this for as long as you wish.

This is true, but it will be at the investors own expense, and the costs would be prohibitive. If the partners had even bothered reading my "Introduction" blog entry, they would realise that there are 3 aspects to the blog's purpose - maximising return for investors, holding the partners to account for the lives that they have ruined, and protecting future investors from them and their ilk.

Properties will be rented out and all income will go to MX NOT to creditors.

Any rental monies that MX keeps to satisfy mortgage payments it is fully entitled to do - I strongly suspect that C&B have not been keeping up with them (ala 15a Moira Street). If MX keeps monies above and beyond that required to service mortgage payments, then implicitly that will be rebuilding equity in the properties too, it just means that any realisation of that equity will not materialise until the properties are subsequently sold. And the partners cannot possibly be adverse to that idea given that they requested all investors to sign 5 year PNs in 2011 with all interest frozen!

I am not unrealistic to think that we will be able to pay 100p in the pound over 5 years but we are offering that. 

And this from the partners who are in default on every single PN (all 5 year PNs signed last year are NULL-and-void), and who cannot even supply the basic data on which such an absurd statement is made.

The above statement also flies in the face of this snippet in the e-mail sent by Liam Collins on Nov 1st 2011, supposedly to all investors but which I was not copied on,:

This leaves us with limited choices.

.

.

2.       Go into what is called an IVA. By doing this it will protect all investors against the threat of bankruptcy but it means we have to make a repayment plan. This is a positive to those who want their cash back but a negative to those who just wish for their interest as it means interest would stop and repayment would unlikely begin before the end of 2012. The other negative of this is that to offer a realistic payment plan based on cashflow projections we would have to offer as little as 20p on the pound back and this would also take into consideration how much you invested and how much you have had back in terms of interest. So if you invested £10k and have had £1k in interest the IVA practitioner would likely only offer 20p in the pound for the £9k outstanding. The final negative is that the repayment plan should we be successful would be over 5 years minimum.

The Editor

================== pro-IVA camp e-mail ==================

From: Liam Collins <liam@collinsandbone.com>

To: Liam Collins <liam@collinsandbone.com>

Sent: <March 15th 2012>

Subject: update

WRITTEN SUPPORT REQUIRED URGENTLY FROM YOU TO HELP US PROVE TO THE JUDGE AT NEXT WEEK’S HEARING THAT MANY OF OUR INVESTORS WANT THE PROPERTIES TO BE SAVED FOR THE INVESTORS IN AN IVA AND OPOSE BANKRUPTCY WHICH WILL ONLY RESULT IN ONE ACTION. MORTGAGE EXPRESS WILL SELL THEM FOR A LOSS TO GET THEM OFF THEIR BOOKS AND INVESTORS WILL GET NOTHING. WE CAN NOT LET THIS HAPPEN. PLEASE READ BELOW WITH CARE. WE NEED YOUR HELP.

Dear all,

I am writing to you today with an update. The bankruptcy hearing this morning was adjourned for 7 days to allow us to get some sort of IVA process going. I am sending this email to you all as you are the people who have so far not shown an interest in voting in for or against an IVA. The process now is as follows:

• We have another hearing next Thursday 22nd March where we will apply for an 'interim order', which basically holds any bankruptcy action until our practitioner has had a chance to send out the IVA proposal to all creditors and to get their votes back. 
• In order to get the interim order granted we need to take evidence to next weeks hearing that we have a substantial number of creditors (i.e you) who are willing to back an IVA.

What we now need you to do is fill in the blanks on the paragraph in bold below (name and amount owed), cut and paste it and re-send it to me so we can print it off and take it with us next week. Time is of the essence so if you are still in favour of an IVA, I would appreciate it if you could treat this as urgent. If we do not get the interim order granted then I will be made bankrupt and we will not be given the chance to get an IVA off the ground.

I (name), confirm I am in favour of Liam Collins' (of the CollinsBone partnership) proposal to protect my investment via an IVA. I do not believe bankruptcy is beneficial to anybody. My investment currently stands at (amount) and I will firmly support an IVA proposal.

Kind Regards,

(name).

Alastair Macleans solicitor turned up to the hearing with a list of around 15 people who were opposing an IVA. The number we have in favour by far outweighs that but it is only any use to us if we can prove it.

We will be in touch regularly over the next week with where we are at.

Thank you so much for your continued support, its massively appreciated and we will keep battling on to try and get an IVA over the line as we strongly believe it is now the best result possible.

If you need to chat about any of the above please get in touch,

Kind regards,

Liam

================== anti-IVA camp e-mail ==================

From: Liam Collins <liam@collinsandbone.com>
Date: <March 15th 2012>
Subject:
To: Liam Collins liam@collinsandbone.com

Dear Investors,

I am writing to let you know that today’s court hearing was adjourned for 7 days. This is to allow us time to show evidence to the judge that we have many investors who oppose the bankruptcy.  This email has only gone to the people who we believe oppose the bankruptcy.

We will be calling each of you next week so that you understand exactly the situation which I will outline below in bullet points.

1.       For those intent on pursuing criminal allegations an IVA will not protect us from that. You can continue to do this for as long as you wish.

2.       Bankruptcy will lead to all Mortgage Express going to LPA receivers. A trustee will NOT be appointed for the estate as MX do not allow it.

3.       Properties are the only assets C&B own

4.       Properties will be rented out and all income will go to MX NOT to creditors.

5.       Those properties which lose tenants as a result of change of management will be boarded up, NOT advertised.

6.       We do not have money in off shore accounts which will be found and split between investors

7.       We do not have anything which can be sold to generate income for investors.

8.       Under new bankruptcy laws as of January last year I will be permitted to live in my own personal property as will David if he is made bankrupt and a charge will be placed over the asset equivalent to the equity.

9.       At present when you take into consideration restrictions and interest in my own home it has no equity at all even when taking valuations from 3 online comparable sites and a RICS survey.

10.   In bankruptcy I will lose all debt to my name, I will be allowed to keep my home and live in it. I will lose houses which are not going to have any equity for at least 3-5 years and rental income is only now starting to pick up. I have made no money from our assets for over 3 years so I will not miss any rental income.

11.   In bankruptcy the receivers will offer a third party of ours choice to buy the assets out for a small fee meaning someone unrelated to me would be able to buy them for a tiny amount and could then gift them back to me at a later day. YES WE DO HAVE MANY CLEVER WAYS WE COULD KEEP THESE ASSETS AND INCOME FOR OURSELVES!

It is time for you all to realise, there has never been bad intent only incompetence and as I say if you wish to pursue criminal allegations you are within your rights to do so.  THE IVA IS FOR YOU ALL NOT FOR US!  YOU CANNOT PUNISH US BY BANKRUPTING US. It is crazy to think you can when you look at the above points but you can punish 130 investors who have hard earned cash like yourselves tied up in this and all like yourselves would like to see some or all of this returned.

I am not unrealistic to think that we will be able to pay 100p in the pound over 5 years but we are offering that. What we are saying is this. The houses are yours, you and MX have the rental income then in 5 years sell them and whatever materialised you keep between yourselves.  Or you could take the emotional irrational Ewart Tempest Georges route, bankrupt us, get nothing wipe the slate. And then what........

Please let me know if bankruptcy is the absolute route you are supporting as there is little point in being covert I will find out in 7 days anyway but at least this way we can gauge whether we have a chance. Remember even if we achieve a 75% vote we still have to get MX to agree with this which is still unlikely but we have to try.  IF MX say no, we are bankrupt anyway.

 Liam.

Liam's plea to wait for an IVA proposal

Liam Collins likes to quote the article http://www.fmwf.com/media-type/news/2012/02/emergency-bank-overseeing-northern-rock-and-bradford-bingley-mortgages-treating-landlord-borrowers-unfairly/, so let's just look at the last two paragraphs of this article:

"Weakening house prices generally mean landlords are taking a greater part of their total returns – or the only part – from rental income. On average, nationally, a landlord’s total return per property was £4,298 over the past 12 months (to January 2012). This comprises rental income of £7,587 coupled with a decline in property value averaging £3,289.

Newnes says: ‘Investors are enjoying rising rents and cheap mortgage finance. With property prices unlikely to shoot up, rental income will be the key driving force behind total returns."

Liam Collins is asking you to hold out for an IVA proposal when not even the most basic of information has been provided to investors. Let's start with the C&B asset spreadsheet used in the article "C&B assets - negative equity". Liam Collins never supplied a date when the portion of the C&B data in this spreadsheet was valid for. So Liam Collins, on 14th March 2012 issue an updated C&B property spreadsheet that itemises the following information for each and every property that the partners actually own:

• Full address.
• Outstanding mortgage value.
• Current mouseprice.co.uk estimated value.
• Current mortgage interest rate, if fixed when until, and the details of the mortgage lender.
• Full list of charging orders against the property, and the amount owed to the creditor in each case.
• The rental income that the property generated during the past year.

And if you cannot do this, then you have absolutely nothing to offer!

Now let's look at some other golden nuggets of basic information that the partners have also not supplied:

• Novocastria Lettings has refused to answer any questions at all, not even its' relationship to Novocastria Developments Ltd., let alone much more important questions like how come C&B are receiving any rent payments from Novocastria Lettings for the C&B assets that it manages (all C&B assets except those in Loughborough), let alone a detailed breakdown of the rental monies that each C&B asset that they manage has been generating.

• The Loughborough properties we know are fully let, but no monies have been making their way back to investors. How much rental money has C&B received from these properties, and where is this rental money going/what is it being used for?

It is this rental income that will determine the value of any monthly payments under an IVA proposal (but checkout the updated "vote no to any IVA proposal" blog that indicates in January 2012 that Liam could not envisage more than 0-500 GBP/month being available for distribution to creditors from rental monies). And any lump-sum at the end of the IVA term would be based on any rise in the value of the C&B assets over the 5/7 term , and which will likely be negligible given the number of investors involved, the poor quality of the housing stock, the current negative equity situation of the assets, the outstanding charging orders, and the fact that some of the assets are not even in the partners names!

Perhaps if Liam Collins supplied the above information, rather than posting an irrelevant blog from Michael Bloom, investors may actually have something to work with!

The Editor


PS. As an update, this correspondence with Liam Collins 14/3/2012:

    [ewart]: My position is set out in my recent blog entries. If you want anyone who is opposed to an IVA to even remotely listen to what you have to say, you have to publicise the information requested in the blog entry I posted last night ... that is a bare minimum.

    [Liam]: the information you are asking is exactly what will be in the IVA proposal.

    [ewart]:  This will not be good enough. You should readily have this information at hand ... if you haven't, it means you don't have a clue on the current state of the business.

Vote no to any IVA proposal

“The only thing necessary for the triumph of evil is for good men to do nothing.”

Edmund Burke (1729-1797)

... vote "NO" to any IVA proposal.

CoBo vs investors



Based on http://www.mouseprice.co.uk/ estimated valuations, Liam Collin's own benchmark of valuing C&B assets,:

• The C&B assets are worthless - they are in negative equity. Refer to the "C&B assets - negative equity" blog entry.
• The assets were bought more than 4 years ago, with the majoirity bought 5, 6, 7 years ago ... and even after all this time their value is still minimally 77k GBP less than what C&B originally paid for them.
• A number of the properties have charging orders against them.

And given the above, C&B still tries to spin investors the yarn of 100p in the GBP return on your investment based on rental income on the C&B assets, and increases in equity values over the IVA term ... rediculous. DO THE MATHS!

Whilst I was doing some very basic investigation of IVAs back in January, I had some e-mail exchanges with Liam Collins, the most pertient snippets of which are as follows:

[Liam, Feb 6th]: The problem is the monthly payments. If we have £500 profit split between 200 creditors as remember there are other non-investor creditors too but they are included in the 4m debt. Are they likely to agree to a payment plan of £2.50 per month and a lump sum at the end of 5 years?

..

There is a lot of work to do to get the occupancy levels up.  We have been paying investor interest over maintenance and so they (C&B assets) have dilapidated. So a repayment plan by way of rental income is a non-starter.

.
.

They are not in bad shape but Loughborough is very competitive student to now since they built many new halls of residence so the standard of the residential properties must be good. I could not say how much we need in total yet until further investigation to achieve maximum yield but no matter what it is, the yield is never going to be a good enough repayment plan. It is almost entirely down to the resale in 5-7 years. With the latter being more likely to achieve some uplift.

[Liam, Feb 7th]: Max monthly payment would be around £0-£500 per month at the moment it would be 0. Problem with IVA is getting 75% to agree to a payment plan of £1-2 per month.

If interest rates move even .5% the portfolio will be cash negative.

Even 6 months into bankruptcy we can go into an IVA so we have a lot of time to think about this if it is feasible.

[Liam, March 1st]: The blog claims that 'a large portion of our debt will be written off', this is inaccurate. We are at this point going for as close to 100p in the pound repayment as possible, hence the (up to) 7 year term to allow the market to recover. Granted, this may not be achievable, but only time will tell what the market does. However, it is our current intention and we will be proposing the IVA on this basis.

So I don't think they have two pennies to rub together that would support any kind of meaningful IVA.  If an IVA is approved, there is no going back. Are you going to pin your hopes on measily monthly payments and whatever increase there has been in the product portfolio over the IVA term (not guaranteed, and could be 0)? Even if all 28 properties were theirs, there were no mortgages or charging orders, and all interest was frozen, the properties are still 117k in negative equity, and there is 3.8m of debt. Each of the 28 properties would have to rise in value and/or generate through rent 28k for each year of a 5 year IVA term to recoup this sum of money. Now there is rental income, how much and how regular this is we don't know - but there are also 100% mortgages to be serviced as well as maintenance costs. Now throw into the mix that the average price of the 27 properties (I have excluded the flat in London which really skews the figure) is 111.6k, and you see how fantastically unrealistic the growth & rent generation would have to be to recoup these losses.

And since Liam Collins likes to quote the article http://www.fmwf.com/media-type/news/2012/02/emergency-bank-overseeing-northern-rock-and-bradford-bingley-mortgages-treating-landlord-borrowers-unfairly/, let's just look at the last two paragraphs of this article in the context of what has been said above:

"Weakening house prices generally mean landlords are taking a greater part of their total returns – or the only part – from rental income. On average, nationally, a landlord’s total return per property was £4,298 over the past 12 months (to January 2012). This comprises rental income of £7,587 coupled with a decline in property value averaging £3,289.

Newnes says: ‘Investors are enjoying rising rents and cheap mortgage finance. With property prices unlikely to shoot up, rental income will be the key driving force behind total returns."

The view expressed by a growing number of C&B and ex-CBS investors is that the best way to maximise value is to force C&B into bankruptcy as soon as possible:

• The bankruptcy trustee has the ability to claw back monies from 3rd-parties. So, for example, if it can be shown that any C&B assets have been diverted to friends/family members to shield them from creditors, and/or that the partners and/or friends/family members were paid excessively high salaries for their work, and/or C&B assets have been stashed in "secret" accounts, and/or that Novocastria Lettings has been with-holding rental monies from C&B, and/or that rental monies from their Loughborough properties have been held back from C&B, etc., then the bankruptcy trustee has the power to enforce their return. An IVA practitioner does not.

• Given the countless lies, broken promises, deception and financial ineptitude of the partners, investors want nothing more to do with the partners and their cohorts. The existing C&B assets should be placed under professional property management, and profits from rental monies distributed pro-rata to creditors. As for Mortgage Express, or indeed any mortgage lender, foreclosing their mortgages on entering bankruptcy, the only rationale for them doing so is if there is a proven track record of not making mortgage interest payments (15a Moira Street was foreclosed on in 2011 for this very reason), or if the rental income is so sporadic that it is invariably not enough to cover mortgage and property maintenance costs ... in which case the assets have no value, period, and would have to be sold.

• The bankruptcy trustee has investigative powers, which the IVA practitioner most certainly does not. There are a large number of investors who have legitimate criminal charges to bring against the partners, and forcing C&B into bankruptcy means that these charges can be brought to the attention of the bankruptcy trustee who is then mandated to investigate. Within an IVA, investors wishing to bring criminal charges will have to do so out of their own pockets, which is prohibitively expensive. The partners have never accepted that any of their activities were criminal, indeed Liam Collins has stated on more than one occasion that, given the same circumstances, he would do the same again. The partners need to be held to account for what they have done, and the Editor will be alleging criminal charges of mis-selling, mis-representation and fraud once the bankruptcy trustee has been appointed.

The Editor