Bransgroves Lawyers offer the following services in relation to Syndicate Loans:
- Bare Trustee (Lender of Record) by a company directed and owned by the directors of the law firm (Private Mortgage Holdings P/L)
- Loan Servicing (free of charge) through our related company Direct Loan Servicing P/L.
- Controlled monies accounts (for progress payments on construction loans)
- Syndicate solicitor services (being a party to the syndicate deed – see below)
As syndicate solicitor we undertake various duties, some express and others implied. Among these are:
- Responsibility for PEXA credentials including (where applicable) holding the electronic certificate of title,
- Quasi trusteeship of member’s capital by virtue of 1 which obligates us to ensure that capital upon discharge is repaid to the investors,
- Coordinator of investor voting,
- a duty of utmost good faith to investors – including placing their interests ahead of our relationship with the broker who organised the loan and serves as administrative agent (in the event of a conflict)
If a syndicate loan goes into default, our policy is that there must be prompt, effectual and commercial steps proposed & executed by either the investors themselves or the administrative agent. By virtue of our contractual obligations we cannot allow affairs to drift.
Where Bransgroves is not satisfied that the administrative agent is taking sufficient action to progress enforcement (such as by failing to keep lenders up to date, failing to give lenders their options and failing to hold votes), Bransgroves will give 48 hours’ notice to the administrative agent, following which it will take over communications with the lenders and propose & execute the enforcement decisions of the investors needed to recover the investment.
In our 25 years experience enforcement we have seen that delayed enforcement equates to increased shortfalls . There are often sound reasons for entering into deeds of forbearance, however no good comes of allowing matters to drift, or from pegging hopes on unrealistic exit strategies. If a potential shortfall is apprehended then that fact needs to be faced & communicated squarely by all involved in order to best optimise its mitigation.
