Author Topic: BRV Requests: Responses from Lending Club  (Read 19840 times)

twigster

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Re: BRV Requests: Responses from Lending Club
« Reply #15 on: May 19, 2016, 10:38:05 PM »
Here is another communication from LC which touches on the BRV topic [same basic info as before as to why they say they it is not really needed] included in its entirety.

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I'm Scott Sanborn, President and acting CEO of Lending Club. I've been on Lending Club's leadership team for the past six years as Chief Marketing Officer and Chief Operating Officer.
 
I know you have questions about the events of the past week and what it means for your investments.
 
Here are answers to a few questions we've heard this week:
 
   What's happening with my assets? Nothing. Your investments are still yours. The performance of loans facilitated through the platform remains robust. We are servicing and processing borrower payments like we always have, and the interest and principal payments that borrowers make will continue to be passed on to you as they were before.
   What's the status of Lending Club's business? We reported strong financial results for Q1 2016. We had solid originations, operating revenue, and adjusted EBITDA, despite a difficult economic environment. We facilitated $2.75 billion in loans and also reported a substantial amount of cash and securities - $868 million.
   Where is Lending Club going from here? We're intensely focused on restoring our investors' confidence. We've talked to hundreds of our investors - spanning individuals to financial advisors to banks to large institutions - including some who are new to Lending Club. While some investors have paused, others have reiterated their interest. We remain committed to both our borrowers and investors, and are working day and night to prove to you that we deserve your trust.
   I'm worried about Lending Club's data - what are you doing to reassure me? On Monday, we took the first of many steps to restore investors' confidence in our data. We shared the observations of an independent forensic data change analysis that looked at over 10 million test conditions on approximately 673,000 whole loans sold over the last eight quarters. Excluding the loans previously identified as having an issue, 99.99% of the loans the independent firm tested display either no changes or changes explained by the normal course of business. You can read the full details here.
   Are you confident in Lending Club's management? Yes. Our Executive Team has been working together for the past six years and has deep expertise in credit, operations, marketing, finance, human resources and technology. We're also supported by one of the strongest Board of Directors in the industry. It includes Hans Morris (the former President of Visa and now our Executive Chairman), Larry Summers (former US Treasury Secretary), John Mack (former CEO of Morgan Stanley), Mary Meeker (a Partner at Kleiner Perkins Caufield & Byers) and other experienced executives.
   What happens if Lending Club goes bankrupt? First and foremost, we are not going out of business. Lending Club has a strong business, a large balance sheet and we are here to stay. We have $868 million in cash and securities, which could cover our costs for a long time. Second, Lending Club has no claim to the payments you receive from borrowers, since each Note is tied to a loan, and loan payments are passed on to Note holders. Third, with a $10.2 billion loan portfolio that generated over $18 million in revenue in the first quarter of 2016 alone, we could profitably service the existing Lending Club platform as a standalone business, even if we didn't facilitate a single new loan. Finally, and I am only mentioning this because some have asked, if all else failed we would transfer our loan servicing obligations to a third party backup servicer. We have a longstanding contract with a third party to service loans in the event Lending Club can't, so that you'd continue to receive borrower payments (regardless of LendingClub Corporation's status). See our prospectus for more detail.
   Why the Department of Justice subpoena? The Department of Justice often issues subpoenas in response to public disclosures such as ours, especially in light of the department's focus on financial services. The company is fully cooperating with the department's investigation.

LonghornSF

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Re: BRV Requests: Responses from Lending Club
« Reply #16 on: May 19, 2016, 11:12:44 PM »
I asked about the BRV and received the canned "we have a backup servicer arrangement" response. Blowing me off like that doesn't make me any more confident as an investor.  >:(

I'm sending a follow up email to clarify the legal status of my claim on the notes if Lending Club goes bankrupt. Let's see what they say.

rawraw

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Re: BRV Requests: Responses from Lending Club
« Reply #17 on: May 19, 2016, 11:22:35 PM »
^I think that's what you have to do.  They are doing their job, but letting them know retail aren't idiots is our job.

And while that email isn't anything new (except profitability as a servicer alone) to me, I bet majority of retail people do not read the Qs or Ks.  I'd guess the people on this forum are among the most informed retail investors they have.

P2PFact

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Re: BRV Requests: Responses from Lending Club
« Reply #18 on: May 19, 2016, 11:34:29 PM »
C'mon guys, it's obvious why LC doesn't want a retail BRV: It would push their VCs down the capital structure below retail noteholders. Right now, VCs get paid first. Why in the world would LC want to change that?
I don't know what you are talking about. VCs own equity of LC. We are unsecured debt holder of LC. Debt is in front of equity. If you are talking about whole loan guys. This BRV won't affect them. They are already isolated by the sweet BRV. Probably laughing at us retail guys at the moment for such stupidity. But what can you say? Little guys always get screwed.

lcelduderino

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Re: BRV Requests: Responses from Lending Club
« Reply #19 on: May 19, 2016, 11:50:44 PM »
How do you know that? VCs hold convertibles for all I know.

C'mon guys, it's obvious why LC doesn't want a retail BRV: It would push their VCs down the capital structure below retail noteholders. Right now, VCs get paid first. Why in the world would LC want to change that?
I don't know what you are talking about. VCs own equity of LC. We are unsecured debt holder of LC. Debt is in front of equity. If you are talking about whole loan guys. This BRV won't affect them. They are already isolated by the sweet BRV. Probably laughing at us retail guys at the moment for such stupidity. But what can you say? Little guys always get screwed.

Rob L

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Re: BRV Requests: Responses from Lending Club
« Reply #20 on: May 19, 2016, 11:52:17 PM »
Just want to make sure I didn't miss the memo so to speak.
LC has never issued any communication mentioning the term BRV or its concept; correct?
Absolutely no acknowledgement of the existence of such things; like area 51 if you will (until a few years ago).

Almost forgot; last month I got and email from LC asking me to participate in a "how are we doing poll".
Gave them high marks. Last question; Anything else we can do that was not mentioned? My answer; BRV.
« Last Edit: May 19, 2016, 11:55:54 PM by Rob L »

anabio

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Re: BRV Requests: Responses from Lending Club
« Reply #21 on: May 20, 2016, 12:25:40 AM »
I think everyone is putting too much stock in the concept that debt holders have standing. To set the record straight all one has to do is look back about 8 years to a company called Government Motors (which at one time was called General Motors). The government declared in a clear shot that legal structures are not important when they declared the unions to have standing above the bond holders. The unions got GM handed to them on a silver platter. The bondholders got...well you know what. Nothing says lawyers/judges can't do it again.
As Will Rogers stated: : I'm not as concerned about the return on my money as I am the return of my money

investny

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Re: BRV Requests: Responses from Lending Club
« Reply #22 on: May 20, 2016, 12:37:07 AM »


Quote
I'm Scott Sanborn, President and acting CEO of Lending Club. I've been on Lending Club's leadership team for the past six years as Chief Marketing Officer and Chief Operating Officer.

i did not get this email. got a different one with a lot less explanations. I wonder if they sent different emails based on account balance???

fliphusker

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Re: BRV Requests: Responses from Lending Club
« Reply #23 on: May 20, 2016, 12:37:24 AM »
C'mon guys, it's obvious why LC doesn't want a retail BRV: It would push their VCs down the capital structure below retail noteholders. Right now, VCs get paid first. Why in the world would LC want to change that?
I don't know what you are talking about. VCs own equity of LC. We are unsecured debt holder of LC. Debt is in front of equity. If you are talking about whole loan guys. This BRV won't affect them. They are already isolated by the sweet BRV. Probably laughing at us retail guys at the moment for such stupidity. But what can you say? Little guys always get screwed.
Can only speak for myself, I have not lost a dime and have not been screwed.  I also knew going into this that NO BRV existed.  Sure, could have put my meager money into something else, just like you, but I decided to take the leap.  Can I lose every penny I have here?  Yup.  Am I going to be pissed at LC for losing it all?  Nope.  I knew what I was getting into.  I am one of the least knowledgeable investors here.  But I am learning.  And one thing I know is that LC stock is leveling out, and the volume is down, which means less volatility.  I also know that grand juries are only a first step, in a very long process.  Ambulance chasers from stock investors are rampant with limited success.  I also know that 3 of the major big players who came and buy notes on LC, paused, not ceased.  The reason why they paused, no longer is with LC. 
I also know that there are plenty seeing the sky falling, and I am snapping up 6% discounts for notes that meet my filters and zero IGP

Fred93

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Re: BRV Requests: Responses from Lending Club
« Reply #24 on: May 20, 2016, 12:43:15 AM »
C'mon guys, it's obvious why LC doesn't want a retail BRV: It would push their VCs down the capital structure below retail noteholders. Right now, VCs get paid first. Why in the world would LC want to change that?

What are you smokin'?  There are no VCs with any instrument higher in the capital structure than the notes.

storm

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Re: BRV Requests: Responses from Lending Club
« Reply #25 on: May 20, 2016, 12:46:39 AM »
And while that email isn't anything new (except profitability as a servicer alone) to me, I bet majority of retail people do not read the Qs or Ks.  I'd guess the people on this forum are among the most informed retail investors they have.

I don't own LC stock, just borrower notes, so why is it necessary that I read the Qs and Ks?  But without a BRV and considering recent news, I'm thinking maybe I'm more invested in LC's success as a company than I originally thought.  I'm finding out that some things have changed in the Prospectus as well since I first joined.  Those changes really should be communicated to investors...not just thrown up on a web page.

bobeubanks

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Re: BRV Requests: Responses from Lending Club
« Reply #26 on: May 20, 2016, 12:47:42 AM »
Yup.  Am I going to be pissed at LC for losing it all?  Nope.  I knew what I was getting into.

Really, you aren't going to be pissed if you lose it all due to illegal activity by LC and/or RL? I'm not saying that is going to happen, but assuming this snowballs and turns into a huge fraudulent nightmare, are you really going to just shrug it all off?

storm

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Re: BRV Requests: Responses from Lending Club
« Reply #27 on: May 20, 2016, 12:54:06 AM »
i did not get this email. got a different one with a lot less explanations. I wonder if they sent different emails based on account balance???

I think they are sending it in reverse chronological order from the newest accounts to older accounts.  I opened an IRA a few months ago, and it has about a quarter of what my 8-year-old taxable account has in it.  The IRA e-mail receives the communications first.

rawraw

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Re: BRV Requests: Responses from Lending Club
« Reply #28 on: May 20, 2016, 12:55:52 AM »
And while that email isn't anything new (except profitability as a servicer alone) to me, I bet majority of retail people do not read the Qs or Ks.  I'd guess the people on this forum are among the most informed retail investors they have.

I don't own LC stock, just borrower notes, so why is it necessary that I read the Qs and Ks?  But without a BRV and considering recent news, I'm thinking maybe I'm more invested in LC's success as a company than I originally thought.  I'm finding out that some things have changed in the Prospectus as well since I first joined.  Those changes really should be communicated to investors...not just thrown up on a web page.
Your notes are registered with the SEC. There is a reason why LC had to file quarterly disclosures even as a private company. Responses like the above are historically why retail investors are legally prohibited from certain investments, which is a huge pet peeve of mine. It's not LCs job to baby sit you. They disclosed the risks, you didn't even have to think of it yourself.  If you want to complain, no one is forcing you to invest here. Plenty of checking accounts that are government guaranteed with no reading required

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fliphusker

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Re: BRV Requests: Responses from Lending Club
« Reply #29 on: May 20, 2016, 01:08:41 AM »
Yup.  Am I going to be pissed at LC for losing it all?  Nope.  I knew what I was getting into.

Really, you aren't going to be pissed if you lose it all due to illegal activity by LC and/or RL? I'm not saying that is going to happen, but assuming this snowballs and turns into a huge fraudulent nightmare, are you really going to just shrug it all off?
Nah, its like playing roulette at at the Gold Nugget, the ultimate responsibility still falls on my shoulders.  What good is it going to do being all pissed off?  I could sell everything I have right now and take a loss. 
Correct me if I am wrong.  LC sold $22 million in notes, those notes were found to have had their dates changed, then replaced by others 48 hours later.  Did the recipient freak out and call foul?  LR tried to talk the board into investing in a company that never transpired.  He was forced out.  An external audit found .01 irregularities in notes.  I am shocked it was that low. 
Am I wrong on what happened?