The Kingston story: Bidders fail to pay up for auctioned cows

BoatMad

freedominacup wrote: »

Honestly only executives in large organizations who are messing with opm would ever consider running up legal bills to make a point. No point in pursuing a debtor with no ability to pay.

But the Kingstons . For example , have clearly significant assists , like land , buildings , the herd etc. It's not the same as " no ability to pay " , they may have zero cash flow , but they have Assets and that's what the bank is trying to realise

BoatMad

tomwaterford wrote: »

There would be uproar amoung ordinary taxpayers if it came out that the banks were doing deals to let people off with money and keep assests way beyond what the ordinary person working could ever afford after the tax payer effectively bailed out banks already

Banks only do deals, where they form the opinion , that the remaining business can succeed and potentially repay more to the bank then if that bank just secured a judgement

In the case where they form the opinion the situation is hopeless , they will proceed to a complete liquidation , they do not write off anything , expect that overall they may realise a loss on that Loan , when they crystallise their loan book losses on an aggregate basis.

Water John

I'd say, keep going, you're crafty enough. I'd say the only thing you're exposed to is the Atlantic.

Bass Reeves

rangler1 wrote: »

Banks will finish this at any cost, they have to make an example

Buford T. Justice V wrote: »

The longer it's going on, the worse the authorities involved in this are looking. They want blood at any cost.

This may yet end up a pyrrhic victory for them.

A bank will recover as much as possible no matter if it costs them more than that unless you can bring something to the table that they cannot touch. In reality in this case there is land worth 1.5-2 million and maybe more and stock worth another million. Borrower offered 1.2 million bank was never going to settle for that.

It is not so much blood or a pyrrhic victory but the reality is that if banks did not recover full security all you would have to do is mess them around to get a discount

BoatMad wrote: »

I suspect the bank is not happy that it is not recovering as much as it can. the fact is they will proceed to sell ALL the kinstons assets until the judgement value is recovered. Thats the way it works

The kingstons will need to then declare bankruptcy to regularise their affairs and allow them to start again ( in whatever capacity )

given the mounts they owe other creditors , they would wise to seek bankruptcy protection as soon as possible , assuming they havent done so all ready. The last thing they need is a series of creditor judgements that will will encumber them perpetually

Judgments are immaterial in bankruptcy cases. The real losers in bankruptcy cases are those with good jobs where a lien is put against future earnings. If bankruptcy is declared in a situation where you were running a business then as you have no other work there can be no lien put on that. As well I imagine that this farm was run as a limited company so other creditors are company creditors not like banks that may have personnel guarantees

freedominacup wrote: »

Honestly only executives in large organizations who are messing with opm would ever consider running up legal bills to make a point. No point in pursuing a debtor with no ability to pay.

But the reality is that in this case there is assets. There is only one way to limited access to such assets and that is to borrow within the limited company but banks will only give you limited money. If you want tpo borrow serious money then it is a case of a personnel guarantee. Catch 22

Water John wrote: »

And what dear Tom, do you think happens with developers buying assets at knock down price from NAMA???
Welcome to the real world. Deals done.
Larry was even bailed out.

Larry borrowing were within a limited company. Because at the time it has stragetic importance ( it was August and at that time about 50% of the national cattle kill took place between that and November) the company was put in receivership.

Larry had a value to the company in that he was the only one that understood the running of it. The banks did a deal however how he really won was that the reason that the company went insolvent was because of debts from Iraq. It was assumed that these would never be paid. However with the downfall of Sadam the new government paid off these debts.

Water John wrote: »

Yes Tom, seems to be 3 more in Cork lined up by the same stable. that is why the sheriff is trying to clear her lines. One, very high profile.

Problem is when other banks feel freed up to cut to chase.

And if the banks did not pursue these debts would you leave money on deposit with them. I think I and anyone with common sense be withdrawing deposits if we had any from such banks.

BoatMad wrote: »

But the Kingstons . For example , have clearly significant assists , like land , buildings , the herd etc. It's not the same as " no ability to pay " , they may have zero cash flow , but they have Assets and that's what the bank is trying to realise

BoatMad wrote: »

Banks only do deals, where they form the opinion , that the remaining business can succeed and potentially repay more to the bank then if that bank just secured a judgement

In the case where they form the opinion the situation is hopeless , they will proceed to a complete liquidation , they do not write off anything , expect that overall they may realise a loss on that Loan , when they crystallise their loan book losses on an aggregate basis.

This is the reality of the situation it is not ability to pay rather it is what is bezst outcome for the bank. The bank may take a hit here but what are the odds that in other cases lads will play ball and allow the banks or even aid the banks in recovery of the loan. Or they may bring a proper deal to the table.

BoatMad

Judgments are immaterial in bankruptcy cases. The real losers in bankruptcy cases are those with good jobs where a lien is put against future earnings. If bankruptcy is declared in a situation where you were running a business then as you have no other work there can be no lien put on that. As well I imagine that this farm was run as a limited company so other creditors are company creditors not like banks that may have personnel guarantees

not sure what your point is here, a Judgement made outside bankruptcy may or may not continue be in effect for the rest of your life , dischargeable debts remain etc,

BoatMad

This is the reality of the situation it is not ability to pay rather it is what is bezst outcome for the bank. The bank may take a hit here but what are the odds that in other cases lads will play ball and allow the banks or even aid the banks in recovery of the loan. Or they may bring a proper deal to the table.

the " best outcome " for the bank is clearly the borrower continues to have the " ability to pay". when the borrower breaks his or her borrowing contract , then its the banks decision how to proceed. The bank must act to protect its business, what else could you ask it to do

Bass Reeves

BoatMad wrote: »

not sure what your point is here, a Judgement made outside bankruptcy may or may not continue be in effect for the rest of your life , dischargeable debts remain etc,

Generally all debts are settled within a bankruptcy and judgement's are set aside where there is no visible income. Also people cannot pursue you for unsecured debt that is within a limited company. I may be wrong but I would be surprised if in most of these large farms/borrowings if the farm is not run as a company to limit tax liability. Unsecured credit within these company's are company debts not personnel debt.

Where the issue with judgement's comes into play is if you have an external income from a job or profession which exceeds your needs. A lien can be extended on this income into the future that you may have to continue to pay or you may be refused bankruptcy.

BoatMad

Generally all debts are settled within a bankruptcy and judgement's are set aside where there is no visible income.

yes but certain leins and judgements can survive bankruptcy

I may be wrong but I would be surprised if in most of these large farms/borrowings if the farm is not run as a company to limit tax liability.

I think this is not the case as far as Im aware, most are simply self employments

It matters not, firstly in most cases the reckless trading laws can be used to lift limited protection , especially where assets remain. Secondly in the case of bank loans , there will be PGs , which renders the limited ( LTD) concept useless in that case. ( as the deveopers found to their cost )

IN the case of commercial business , there is usually a far smaller percentage of assets over trade income , hence little is to be gained by trying to recover assets . In the case of farms the opposite is true

handlemaster

If people want to protest at the actions of the bank on this farm they should also protest at every business that banks move on after having financial difficult. This would keep things balanced and fair for all. Then we would arrive in a situation were banks would not lend ... Where would we be then ?

handlemaster

How much would a farm like this be turning over a year ?

Milked out

Bass Reeves wrote: »

Generally all debts are settled within a bankruptcy and judgement's are set aside where there is no visible income. Also people cannot pursue you for unsecured debt that is within a limited company. I may be wrong but I would be surprised if in most of these large farms/borrowings if the farm is not run as a company to limit tax liability. Unsecured credit within these company's are company debts not personnel debt.

Where the issue with judgement's comes into play is if you have an external income from a job or profession which exceeds your needs. A lien can be extended on this income into the future that you may have to continue to pay or you may be refused bankruptcy.

It depends how far along they are, if a lot of cap. Expenditure had been carried out it may have made more sense to stay as a sole trader, with these lads have jumped in numbers so fast it may have been the case

freedominacup

BoatMad wrote: »

But the Kingstons . For example , have clearly significant assists , like land , buildings , the herd etc. It's not the same as " no ability to pay " , they may have zero cash flow , but they have Assets and that's what the bank is trying to realise

You refered to other creditors tying them up in court for years pursuing unsecured debts. That's what I was replying to. That said if you believe ACC are going to do better out of the course of action they're following than by coming to an arrangement where the Kingstons trade out I think you're deluding yourself. The bank is already 400000 worse off four months after they appointed a receiver. If they'd given the cattle to the Kingstons or anyone who'd take them day one they'd have been better off.

BoatMad

freedominacup wrote: »

You refered to other creditors tying them up in court for years pursuing unsecured debts. That's what I was replying to. That said if you believe ACC are going to do better out of the course of action they're following than by coming to an arrangement where the Kingstons trade out I think you're deluding yourself. The bank is already 400000 worse off four months after they appointed a receiver. If they'd given the cattle to the Kingstons or anyone who'd take them day one they'd have been better off.

My experience with Banks, suggest that where they form an opinion that if you can trade out , they will work with you. They have facilitated the Kingstons over many years and had restructured the loan and advanced even more for sheds. This is an eight year saga coming to a closure

The fact is this enterprise had overtraded and failed. There little more to say

The bank is merely trying to pick up a few pieces to setoff against its losses


in the situation they were in, the Kingstons would require significant new and fresh capital injections, and even then unlikely to trade successfully never mind met any new loan obligations

the system cannot protect people from themselves

melissak

OttoPilot wrote: »

Completely inappropriate became it bails out and rewards those who took on too much risk.

Addressing another poster, if a farmer was basing his investment decision on the sums in '08 and not taking into account his repayment ability should the market deteriorate, he should lose everything because he's an idiot. Same as many property developers from the boom.

Are you a farmer? I hope you are and that karma affords you an opportunity to learn empathy..

handlemaster

melissak wrote: »

Are you a farmer? I hope you are and that karma affords you an opportunity to learn empathy..

Why get all nasty. Say what you have to say without the .... I wish you ill will.... next posters will be calling the banshee

whelan2

Back on topic. Anyone at the auction?

melissak

handlemaster wrote: »

Why get all nasty. Say what you have to say without the .... I wish you ill will.... next posters will be calling the banshee

A lot of farmers overextended themselves based on false promises. A lot of good people worked their arse off for years and lost everything. The old man had to watch his animals sold off and faces the probability of losing the farm he has worked day in day out for 50 years. A lot of farmers are mortgaged up to their eyes. They are one quirk in the market or crop failure etc from being in this position. They would do well to remember this. Not to pour scorn on misfortune
Empathy is a great thing it is not "Ill will" to hope you achieve it

handlemaster

melissak wrote: »

A lot of farmers overextended themselves based on false promises. A lot of good people worked their arse off for years and lost everything. The old man had to watch his animals sold off and faces the probability of losing the farm he has worked day in day out for 50 years. A lot of farmers are mortgaged up to their eyes. They are one quirk in the market or crop failure etc from being in this position. They would do well to remember this. Not to pour scorn on misfortune
Empathy is a great thing it is not "Ill will" to hope you achieve it

Whats a promise worth ? Most people have empathy when business owners get into difficult. Thats it though. Thats business if it doesnt work out dont go crying I was promised this and that , thats just nonsence.

Buford T. Justice XIX

Buford T. Justice V wrote: »

The longer it's going on, the worse the authorities involved in this are looking. They want blood at any cost.

This may yet end up a pyrrhic victory for them.

Bass Reeves wrote: »

It is not so much blood or a pyrrhic victory but the reality is that if banks did not recover full security all you would have to do is mess them around to get a discount

It will end up being a pyrrhic victory because of the way they went about this foreclosure.

Farmers may tolerate the messing around for one farm but, if it's repeated with expenses like the hugely excessive costs of security for the farm and the firesale of expensive stock, farmers and farm organisations won't be long getting their backs up and stopping these type of sales.

I don't think many farmers like to see this type of thing going on but recognise that it may be necessary in some cases.

But the stripping and sale of assets for far less than they're worth and excessive profiteering of those involved will not be tolerated for long at all!

BoatMad

Buford T. Justice V wrote: »

But the stripping and sale of assets for far less than they're worth and excessive profiteering of those involved will not be tolerated for long at all!

I dont think farmers have much in the way off control over what happens. Land will always find a buyer

greysides

melissak wrote: »

Empathy is a great thing it is not "Ill will" to hope you achieve it

Mod: Okay, that's enough on that subject!

flutered

tomwaterford wrote: »

There would be uproar amoung ordinary taxpayers if it came out that the banks were doing deals to let people off with money and keep assests way beyond what the ordinary person working could ever afford after the tax payer effectively bailed out banks already

take a real decco at nama

BoatMad

flutered wrote: »

take a real decco at nama

which is not a bank for a start

flutered

tomwaterford wrote: »

In fairness Larry goodman was bailed out well before I was born :pac:


Look it....those deals at knock down prices off nama are a perhaps just a reflection on how over priced they were??
(Much like Agri land prices)


If a case like this was to come out of let's face it a bankrupt individual being allowed hold onto an asset worth potentially millions and taxpayers having to put up with it...theirs be uproar....esp in a political environment at the min



Though from talking to/dealing with people in that locality this is rumoured to be the first of four farms so it could be a long summer and a marker will be set down??

nama hired guys that ran their buisness into the ground, that had the cream safely removed to friends and family, then sold the buisness's back to the developers

BoatMad

flutered wrote: »

nama hired guys that ran their buisness into the ground, that had the cream safely removed to friends and family, then sold the buisness's back to the developers

whose business was run into the ground

flutered

Buford T. Justice V wrote: »

It will end up being a pyrrhic victory because of the way they went about this foreclosure.

Farmers may tolerate the messing around for one farm but, if it's repeated with expenses like the hugely excessive costs of security for the farm and the firesale of expensive stock, farmers and farm organisations won't be long getting their backs up and stopping these type of sales.

I don't think many farmers like to see this type of thing going on but recognise that it may be necessary in some cases.

But the stripping and sale of assets for far less than they're worth and excessive profiteering of those involved will not be tolerated for long at all!

many are making money bar the farm owners

freedominacup

handlemaster wrote: »

Whats a promise worth ? .

Between farmers. Everything. It therefore colours how we approach all business transactions.

freedominacup

BoatMad wrote: »

Land will always find a buyer

No it won't. More than one hardy boy has been happy to walk away from a bank purchase after a couple of years content that he "only" lost 50-100k on the deal. Land like this does not find buyers. Atm it's hard to sell unencumbered land. Three farms withdrawn from sale in my parish in the past four months. In all cases they were completely free sales. Why would anyone put themselves in for hardship buying land in this situation?

Buford T. Justice XIX

freedominacup wrote: »

Between farmers. Everything. It therefore colours how we approach all business transactions.

This x 1000!

BoatMad

freedominacup wrote: »

Between farmers. Everything. It therefore colours how we approach all business transactions.

This is true of most business relationships, more deals are done on a golf course on the back of promises then anywhere else. Trust is a vital commodity in personal business relationships and all business is between " people"