Goliath Won

GOLIATH WON

Part One

COPY LETTER FROM OUR LEGAL REPRESENTATIVES TO THE IVA PRACTITIONERS

VERY URGENT 15th September 2015

Dear Sirs,

Our Clients: Mr Gordon William Hoyles and Mrs Kathryn Hoyles

Your Client: …………..

We write further to the above matter and understand that you have been instructed on behalf Mr….., our clients IVA supervisor

1. We understand from your client that he intends to terminate our clients’ IVA agreements and commence bankruptcy proceedings from tomorrow 16 September.

With respect, we have been seeking documentation from your client since 19 August. We were subsequently informed by your client’s colleague on 28 August that arrangements would be made to provide us with a copy of your client’s file upon receipt of signed authorities from our clients, copies of which were sent by email the same day.

2. We did not hear further from your client, despite numerous chasers, until 9 September when we were telephoned by Mr…who informed us that we would not be provided with a complete copy of our client’s file as he considered it disproportionate to do so and he stated that we should make any specific requests for documents we may require. We immediately wrote requesting documents and we were informed that your client would only refrain from terminating the IVAs for a period of 7 days i.e.until 16 September. Despite the deadline set by your client of tomorrow, no documentation has been forthcoming.

3. You will note from our letter of 9 September that our clients have raised serious concerns that your client mis-sold them their IVAs as he, inter alia, failed to advise them of all their options as required, and we are instructed that he had advised them that their only choices were to sign the IVA or be made bankrupt. On the limited information available to us, it appears that it may have been more beneficial for our clients to seek to enter into informal arrangements with their creditors albeit we cannot properly advise our clients without sight of the documentation we have requested.

4.It appears unconscionable for your client to terminate our clients IVAs in circumstances in which our clients have been actively seeking information/documentation from your client in order to enter into meaningful discussions with a view to finding a resolution to this matter. In the event that the documentation sought clearly shows that the IVAs were not mis-sold then our clients may wish to make their best proposal to vary the terms of the IVAs albeit we naturally require time to consider the documentation, liaise with the individual creditors and advise our clients accordingly. Please kindly provide us with names and contact details for all our clients’ creditors under the IVA in this regard.

5. In view of the contents of our letter of 9 September, please confirm that your client has now sought consent from the creditors to refrain from commencing bankruptcy proceedings until these issues have been resolved. We further note that to date we have not been provided with any evidence that your client is being placed under pressure from the HMRC to terminate the IVAs.

6. We should be grateful for you to confirm that your client shall not take any action to terminate the IVA and commence bankruptcy proceedings until we have been provided with the documentation sought and given 14 days to consider the same to enable us to advise our clients, which we consider to be highly reasonable in the circumstances. In the event your client is not prepared to agree to this reasonable proposal our client shall give serious consideration to making a complaint to your client’s regulatory body and shall refer to the chain of correspondence between us on issues of conduct and costs in any subsequent bankruptcy proceedings.

We look forward to hearing from you by midday tomorrow in view of your client’s deadline.

Yours faithfully,

…………LAW

From that you can see we needed help with these people. They were walking all over us and trying it on with our specialist solicitor.

Here again I think dates and actual correspondence the best and most interesting way to tell the story. Such a presentation, call it reality literature, perhaps a bit cold, a bit formal, will nevertheless both fascinate and inform. If the tale gets a bit mixed up, doesn’t flow easily in parts it will help the understanding of our experience, confused, emotional turbulence. We were thinking back and to and up and round in all directions. Frightened, handling a welter of stuff, we were in a fight, backs against the wall with a smash and grab in progress.

Personal P.38 Para 25.1

Partnership P.40 Para 11.4

Question: Give reasons for your insolvency?

The cause of our failure in a nutshell is the devious practices of the Bank RBS

and their people.

Our involvement with them started with an unsolicited and pretty anonymous phone call asking did I want to borrow some money. Having answered yes, thinking to refinance, I was told someone would ring me in the next 20 minutes to half an hour.

That someone was a man called X, an official of the Royal Bank of Scotland, a Business Development Manager MLIA(DIP) DIP.CRM who at the same time, we were told later, was running his own mortgage brokerage. He got us a fixed interest loan over five years at what proved over time to be high interest. There was no alternative offered nor could I get answers to the question, “What happens after 5 years?”

We signed the paperwork for the loan of £300k at Birch Motorway Services, Heywood, Lancashire on the M62 about 5.30 one wet evening, which at the time I thought a bit grubby.

X shortly afterwards organised a second loan of approximately £250k to enable us to buy no.30, Marine Parade with written agreement of further funding to refurbish the property.

Shortly after the deals were done X disappeared off the radar and we were handed over to a new manager Y, who obstructed all future negotiations.

I believe the Bank realised there had been jiggery pokery, got the wind up and tried to cripple us to sweep the whole thing quietly under the carpet. We were expected to cave in. We didn’t.

Instead, having no other option, we pursued the development of No.30 by other means. Private loans, overdraft facilities, credit cards and finally a loan from a Brewing Company. A loan which RBS did everything they could to stop.

We lost thousands and thousands in taxes (Council taxes), in fees (Valuations, planning applications, legal) and mortgage interest payments during time wasted without being able to develop no.30 to an earning condition.

Down the line as the expenses mounted and we were struggling to keep up we were told by the IVA Practitioners, our Bank insisted we enter into IVA’s which thus persuaded we did.

Thus, I believe the Bank is the main cause of our failure.

I believe we would likely have weathered the national economic downturn and the more severe local decline had we not been so abused by the Bank.

Attached also document prepared by a financial advisor as corroboration of the above being the agenda of a meeting with RBS and the Brewing company March 2010.

In addition, however it must be borne in mind that costs have been rising and new industry norms have introduced extra expenses that were not there in 1996 when we purchased the Hotel. An example of this is agents like Booking.com who take 20% of our room rate and worse still Expedia who take 25%. These organisations accounted for 80% of our bookings. To this VAT at 20% takes huge chunks out of turnover. These costs we can’t pass on to the customer without pricing ourselves completely out of the market.

19 September 2011

Extract of letter to us from IVA Team

Dear Mr & Mrs Hoyles,

Your proposed Individual Voluntary Arrangements (IVAs) and Partnership Voluntary Arrangement (PVA)

Following your meeting with us on 6 September 2011 regarding your financial position and the various options available to you in the circumstances, you have decided that steps should now be taken to put proposals to your creditors for IVAs and a PVA.

We have discussed the alternatives to IVAs which may be available to you, including bankruptcy, during our meeting and a summary of these options is attached to this letter so you can review them again before proceeding. However, from the information you have provided and the options we have discussed, it appears that IVAs and a PVA is the most appropriate option for you due to the Bank’s insistence on this on this approach for support going forward and to preserve the value of your assets.

9th December 2011

Dear Z,

I don’t know what you think of this bank proposal. I think it’s a bit brutal.

You talk about overcharging and they want 6% above. And this is interest on interest

and some of this interest is at 29% at that. Where has the 3.5-4% gone?

Note the £3000 per month expected has become £3416.66.

And how can you build a case of overcharging and at the same time we meekly agree to

being what appears to be overcharged?

It seems to me these people called the Bank are shunting us into an expensive IVA

determined at the same time this will only have a life of 6 months and they then intend

to sell us up. It doesn’t make sense. It looks to us like we are being slowly and gently

eased into destitution.

Could it be, is it possible, that the best way forward for us would be to take the form of a

limited company, an entity that doesn’t age; could be more easily re- financed and from

which we could expect an on-going income, whether we are active in it or not.

We have young people who would become Directors; intelligent, responsible people of

good background, education and character that work with us and we’ve known for several

years.

Please consider these ideas. Our position seems to get more desperate by the day and we’re as worried and undecided as we ever were.

Yours truly,

Gordon

Dear Z,

First understand I am unlikely to go it alone and act against your best advice. However

I hope you will think seriously about my doubts and ideas.

Starting at the bottom £225 a month to wet-nurse us and save us the stress of opening envelopes is an offer I would gladly accept. I trust we will get a clear picture of what you will do. If this offer is purely IVA-related, then you will have to suggest different fees should we not go there.

If the bank won’t play it any other way than a IVA is there another bank and have we really exhausted the possibilities of an investor?

The accountant’s bill; Please have a go at him.

The credit card debt: It has always been my opinion that credit card debt is the best kind of debt. Whilst this is not the standard wisdom there are no penalties for early settlement, there are no questions asked about what you might want the money for, and if you make the payments a chunk of the payments are still available for you if you need it. Our present position with the credit card companies has deteriorated. Some of them are asking for the whole of the outstanding amounts at once. Whereas £30k over a year might be manageable £100k right now certainly is not unless of course you know where there is £100k lying about.

On this same issue i.e., interest, this morning I spoke to the IVA Accounting firm, and it seems their costs and fees could come to £40k made up of £9k up front, 15% of the money they handle paying the outstanding unsecured loans and expenses. I can’t see the sense in giving them £40k when that same £40k could make a significant reduction to our debt burden and that without us having a bad credit record.

Is it true that we would still pay off £100k on the credit cards and a further £40k to the IVA firm? We are thoroughly mixed up. Someone says pay this and pay that. Someone else says pay nothing.

Try to fight our way out of this jam or surrender to an IVA whilst we don’t fully understand, and nobody’s made the effort to give us that complete information of the ramifications of an IVA.

On top of that last week a young lady from the Inland Revenue descended on us and we had to pay her £2500 to go away. Fortunately, we were able to give her the money but if we spend all the money we have we can find ourselves with no cash. We have £24k in one account, and £3k available in another currently.

Gordon

extract from Sunday Times Insight article 24/11/2013, Titled, RBS ‘legalised theft’

“the Bank of England is expected to address allegations of abuse when he publishes the results of his own inquiry tomorrow.

The Sunday Times has also investigated allegations that RBS has pulled loans on businesses and swept their properties into its own land bank. Our evidence has been shared with Tomlinson.

The Leeds-based businessman became one of Cable’s two ‘entrepreneurs-in-residence” in May with a brief to shake up the banks. His allegations centre on RBS’s Global Restructuring Group (GRG), which has been described as a ‘hit squad” by a senior politician.

Firms have told Tomlinson GRG purports to help struggling companies but often does the opposite. They allege it plunges viable firms into difficulties by imposing huge fines, driving up interest rates and withdrawing loans.

Entrepreneurs claim they were forced out of business only to see RBS’s property division, West Register, buy their properties for knock-down prices. Others claim they were left penniless after healthy organisations were taken into GRG.

Tomlinson reports: “From the cases I have heard, there is a clear risk of a perception arising that the intention is to purposefully distress a business to put them in GRG and subsequently take their assets for West Register.”

Edinburgh-based West Register has acquired more than £1bn of UK property assets. Documents seen by this newspaper show that the firm:

Works alongside GRG to buy up properties. In one email an executive instructs GRG to “get control” of a development owned by a customer because West Register has an “appetite” for the property. The customer’s lending was withdrawn days later.

Scoops up “distressed” properties at a fraction of their value. One luxury residential development valued at £54m was bought for £16m.

Receives inside information about the sale of GRG assets so that it can outbid rivals. In one case, West Register was leaked details of sealed bids.

Hundreds of small-business owners have lodged complaints about abuse by GRG and the bank is understood to be bracing itself for a deluge of lawsuits. Alison Loveday, a lawyer representing 40 GRG “victims”, accused RBS of orchestrating a campaign of “legalised theft”.

Sir Andrew Large, a former deputy governor of the Bank of England, encountered “serious allegations” about GRG’s tactics during his review of small-business lending at RBS, some of which will be reflected in his report published tomorrow.

Large has already called for a “forensic inquiry” into the allegations of abuse by GRG. RBS has agreed to investigate.

RBS said yesterday: “In the boom years leading up to the financial crisis, the overheated property development market became a major threat to the UK economy.

“RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.

“Facing up to these mistakes has been a difficult, but essential part of making RBS a safe and strong bank once again. That has been one of GRG’s main tasks. GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.”

“We are already committed to an inquiry to investigate how customers are treated by rBS when facing financial difficulties and ensure that we provide them with appropriate support.”

Bernard Jenkin MP,

House of Commons,

London

SW1A OAA

27th November 2013

Dear Sir,

The revelations regarding RBS and small business at last make sense of the treatment we have endured at their hands.

The story is long and on-going. We have correspondence and records going back to 2007 that demonstrate their skulduggery but briefly; We accepted their mortgage offer to purchase the property abutting our hotel. We accepted with their promise to advance funds to develop and modernise the building No.30 Marine Parade, Dovercourt. When it came to it, they did not provide these funds and what’s more did all they could to prevent other people funding the project.

In the mix is a dodgy valuation that the bank insisted on, non-cooperation in a planning

issue: interest rates as high as 29% and advice that was more to the Bank’s advantage than ours.

We really do need all the help we can get to overcome this terrible giant. One estimate is that RBS have caused us extra expense to the tune of £200,000 over and above what would have been realistic costs.

Thus, with a subtle creeping brutality which we have fought and fought they have brought us to the brink of bankruptcy.

Please can you help us to get a fair deal.

Yours faithfully,

Gordon Hoyles

Partner, The Hotel Continental 28-29 Marine Parade, Dovercourt, Harwich CO12 3RG