Judane

[MuckleJoannie]

(2) That a "significant proportion" of the previously much talked about "shortfall of £411,000" is, according to the Development Trust "resulting from compound penalty interest accrued since 2004. The councilor's lawyers have advised the penalty interest could not be enforceable against the company".

 

 

I have seen literally hundreds of SIC loan agreements that were prepared by various lawyers including the same bunch that provided the advice above. The charging of penalty interest on late payments is a standard clause and now they say it is unenforceable

[icepick239]

With reference to the article posted on the Shetland News Website 15 Dec 2010.

 

SIC development committee chairman Josie Simpson instructed head of development Neil Grant to remind members about why last month they had voted overwhelmingly to relieve Judane of more than 400K of debt to SDT.

Mr Grant said the summary had been circulated to all councillors, including those who had not taken part in the debate on 9 December.

He warned the information should not be shared publicly because it could effect the compromise agreement between the council and Judane.

Mr Grant had circulated what he called an "Internal Summary Note", the contents of which would have probably baffled Einstein himself.

Why? - because the figures DO NOT SEEM TO COMPUTE.

The JUDANE/SIC/SDT figures are becoming the 'stuff of legend'.

As Ghostrider commented previously, maybe they can only handle peerie sums.

 

Two points:

This information was probably meant or destined to be 'leaked'.

(one of the posters now reckons that the SIC/SDT owes Judane)?

It appears to have been compiled in a rush.

 

Compound Penalty Interest:

It certainly is enforceable, as it would have been a standard clause in their agreement.

It is presumed, that Judane is a dormant company, (non-trading) and has not yet been struck-off the Companies Register, therefore all legitimate debts are still able to be accrued and owing by that company to the Lender.

Unless the SIC Legal dept has found something 'strange' their advice surely is incorrect.

 

If the Interest and Penalties ARE NOT enforceable, how would that effect all previous/current Borrowers, who have since/are paying back their loans including Interest.

 

If however, Judane was to be 'Liquidated' then it would certainly be pointless to try and collect overdue interest and penalties.

The external advice from the 'Bankruptcy Practitioner' should be followed up by getting a further opinion on this.

 

Directors Loans are indeed the last creditors to be paid in an orderly winding-up of a company.

If all Creditors are repaid or their debt greatly reduced, when the Land & Buildings are sold, that would ensure a better chance of re-imbursing any Directors Loan.

[Marooned in Maywick]

Quite happily draw a line under it once the building is sold and the proceeds go to clearing the rest of Judanes debt to SDT/SIC.

 

Yep.

 

In the meantime...is there anything to prevent Judane hiring/leasing/renting the building to T&N for the going rate then selling it on to them once any SDT shackles have been released?

 

I'd certainly hope so...

[swc123]

 

This does not really compute. Firstly, the £190k needs to be viewed in an if it comes light. Until receipt is in full, it is nothing more than an expected payment, counting chickens and all that, to do the sums with it included.

 

Even if it does arrive in full and there is a final £91k excess in the numbers, I have doubts SDT will break even when the compounded affects of inflation are factored in over the lifetime of the borrowings. Without analysing the details of all transactions in/out its impossible to know, but given the sums and timeline involved, break even has to be touch and go at best.

 

These are valid points and as you say without knowing times of payments it may be a case that break even is the likely scenario if the remaining money is paid back.

 

However I would much prefer that money continues to be invested locally in this manner rather than in a very dubious stocks and shares and banking system. Yes there are risks and income not realised but there is dicernible local benefit from it during the period of investment.

 

Note that does not necessarily mean I would have personally agreed with the investment in this case at the time, as obviously I am not privy to the facts of the case. It is a more general point I am making..

[Colin]

I am not privy to the facts of the case.

 

I wouldn't worry about that. Very few others have any either, but it hasn't stopped them.

 

All you need is a belly full of spite and bile and an axe to grind. Facts would just be an inconvenience.

[jimmy parks]

All you need is a belly full of spite and bile and an axe to grind. Facts would just be an inconvenience.

 

Here here Colin. Now that the facts is known the situation is not nearly as bad as first assumed. Seems like miniscule when compared with previous fishy related investments. Maybe now serial cooncil-bashers like Gostrider will take a rest. Or at least we can hope.

[Colin]

I think the person that has lost the most out of this whole situation is Chris Hodge when Judane decided not to sell him the factory after he'd spent a small fortune (of his OWN money) on it!

 

Chris Hodge was given two years to raise the money and buy the factory and, to the best of my knowledge, the rent paid during that time would have been deducted from the cost.

 

As for him spending a 'small fortune' on the factory. That was his choice and no one AFAIK forced him put in shelving or a cafe etc.

 

I would also like to know if not his own, just who's money you think he should have been spending?

[JustMe]

I seem to recall that Chris Hodge was all set to buy the building when the council's planning department decided that contrary to their earlier advice the discount warehouse did constitute a change of use and therefore required fresh planning permission. Now I am sure that somewhere in the original communication from the planning department there was some sort of get out clause that said that the advice that no change of use permission was needed was provisional and that Chris should seek independent advice but I still think the Council's planners did not exactly treat him fairly.

 

As for his spending on the building I think that having been told it was ok to change it from a factory to a discount warehouse it was reasonable for him to go ahead and spend on the conversions and as I understand it the cafe did get planning consent.

 

Seems to me that although the Shetland public may have lost out over this Chris has lost far more.

[giant]

If charging compound interest on Council loans isn't enforceable does the council now have to refund everyone who has been charged and paid this interest?

 

If this also means that all charges relating to late payment of council tax and rent aren't enforceable this could prove to be quite expensive for the council.

[Ghostrider]

All you need is a belly full of spite and bile and an axe to grind. Facts would just be an inconvenience.

 

Here here Colin. Now that the facts is known the situation is not nearly as bad as first assumed. Seems like miniscule when compared with previous fishy related investments. Maybe now serial cooncil-bashers like Gostrider will take a rest. Or at least we can hope.

 

Ya rekon?!? Maybe the actual £££'s losses aren't quite so depressing, but the inept misjudgements and questionable decisions, made by the same people in both cases, were equal contributors in both.

 

SSG were sinking fast when the council waded right in with cheque book in hand, where angels feared to tread, shortly after SSG sank completely and took it all with them.

 

Judane were sinking fast in 2003 when the council waded right in with cheque book in hand, where angels feared to tread, shortly after Judane sank completely, and *maybe* most of the principal will be repaid eventually.

 

SDT money is *supposed* to make the local economy more bouyant by assisting local businesses develop and return an income to the Shetland population. The net benefits of the 2003 investment in Judane were to allow how many employees? to earn a wage, for less than two years. The SDT would have been better off just to have put the Judane employees on the SDT books and paid them direct for two years. At best SDT *may* not make an "on paper" loss, but they may well make a loss once the affects of currency devaluation between '03 and '10 or whenever are factored in, and they certainly won't have earned any income for the Shetland population from the hundreds of thousands tied up in Judane. I'm struggling and failing to see what angle to take to find anything positive about Judane from 2003 to present.

 

Both the SSG investment and Judane investments were controversial when they were made, insofar as the staff handling such issues advised the SIC there was a high risk of them being problematic. Yet in their wisdom the SIC decided to crash ahead with them anyway, apparently without even putting in place any safeguards to recoup should the worst scenario outcome occur. Maybe if the SIC actually listened to, understood, and acted upon the advice they pay for (probably quite hansomly), there would be a whole lot less to bash the council for.

[unlinkedstudent]

I am not privy to the facts of the case.

 

I wouldn't worry about that. Very few others have any either, but it hasn't stopped them.

 

All you need is a belly full of spite and bile and an axe to grind. Facts would just be an inconvenience.

 

I resent the fact that you appear to be tarnishing others who post on here in such a manner, myself included. Where pray exactly is my belly full of spite and an axe to grind then? If I have broken the T&Cs for defending myself, I humbly apologise.

[Claudias]

 

I would also like to know if not his own, just who's money you think he should have been spending?

 

He should have emulated the Miller's and spent the council money.

[Para Handy]

All you need is a belly full of spite and bile and an axe to grind. Facts would just be an inconvenience.

 

Here here Colin. Now that the facts is known the situation is not nearly as bad as first assumed.

 

A loss of £484,000+ ect " Not nearly as bad " So its just chicken feed to you

jimmy parks?

So if it had been owed to you.

You would just wright it off, if so do you have a house for rent? And I will just not pay it and stick my fingers up at you.

[paulb]

i think this thread is going to get locked.

 

the money has been explained if she can back that up with evidence. which we hope the trust has seen then that's the end of the scandal.

 

chris hodge did employ quite a lot of people at one point. if he had been supported instead of what was done to him he could still be employing them. who knows his stock may have improved over time too.

 

the loans themselves are questions for the trust. i hope they are learning from past events. there website is out of date. any chance of finding out what percentage is invested in which sector. in 2006 they were mainly into fish has that changed.

[Ghostrider]

the loans themselves are questions for the trust.

 

Yes, and No. While they are initially the responsibility of the trust, the trust itself has a responsibility to the Shetland public and must continiously prove that they are doing their job competently, correctly and efficiently. In the same way as the board of directors of a company have to report back to their shareholders and explain themselves and their actions to their shareholders satisfaction, the directors of the SDT (aka the SIC) have the same responsibility to the Shetland public who are the ordinary "shareholders" of the SDT.

 

A great deal of what has unfolded relating to the Judane investment by the SDT is illustrative of the general and long-term issues that bedevil the SDT (SIC), and while a lot of answers have eventually been wrung out of those concerned relating specifically to the Judane investment, not all are wholly satisfactory nor have all concerns been addressed. In addition the Judane specific issues have also taken on broader meaning, being as some of them are yet one more example of a repetitive longer term problem, being as they are current, they are being cited as "Exhibit A" evidencing said problem in wider general discussions of it.

 

If this thread needs anything it is perhaps to modify the title to something along the lines of 'Judane & other problematic SDT investments'.