Why CYBG Remediation Support Group need your help

John Guidi Hunger Strike
John Guidi Hunger Strike

We need your financial help to stop aggressive legal action against a number of our group by, US vulture fund, Cerberus Capital, on our loans sold by Clydesdale Bank (now CYBG – Virgin Money). Donate to our crowd justice campaign here.

Set out below are the individual circumstances of the people we are seeking to help but all of them and many others besides have the following done to them.

The Clydesdale / Yorkshire Bank & Cerberus story

Between 2000 and 2012 Clydesdale and Yorkshire Bank invented a toxic loan product they branded Tailored Business Loans (TBL’s) selling them to approximately 12,000 small business customers. The loans were toxic in that they contained major misrepresentations, in particular, huge break charges were hidden in them.

So, when interest rates fell dramatically following the 2008 financial crisis and customers tried to switch to cheaper loans, they were charged huge breakage costs of up to 40% of the loan, many were unable to switch at all and became loan prisoners. Many businesses did not survive and were bankrupted. Some desperate customers committed suicide.

In 2014 Clydesdale Bank’s CEO at the time, David Thorburn admitted in evidence to the Treasury Select Committee that the toxic loans were designed to avoid regulation.

In 2015 and 2016 Clydesdale Bank sold customers’ loans to the unregulated American vulture fund Cerberus (who in turn set up various Promontoria badged businesses to hold these debts). These companies have aggressively pursued what is left of Clydesdale Bank’s victims through the courts, selling properties below value, placing good businesses into receivership and bankrupting individuals. You will see from the stories below that this is despite the businesses continuing to meet their payments.

There are many questions over Clydesdale Bank’s sale of customer loans, yet Cerberus continues to relentlessly persecute the victims.

This is where we need your help. Without funds for legal fees to defend against Cerberus, victims will be dragged through the courts to face bankruptcy and misery in what should be their retirement years.

Clydesdale Yorkshire Bank Remediation Support Group (CYBRSG)

Our group, Clydesdale Yorkshire Bank Remediation Support Group (CYBRSG) is formed from small businesses (SMEs) who have been through all or part of the destructive process above.

CYBGRSG is a voluntary group of victims who are lobbying on behalf of all affected by this scandalous behaviour that has been going on under the nose of the Financial Conduct Authority (FCA) and the government.

So far complaints to the bank and the Financial Ombudsman Service (FOS) regarding these unsuitable loans have been rejected.

In many cases, SMEs original complaints to the bank are still outstanding, but without money to defend themselves from these predators, they cannot fight and are destined to oblivion.

CYBGRSG, supported by MPs, has called for a stop to legal action by the bank and Cerberus until complaints are properly heard by the new Dispute Resolution Scheme (proposed for September), but this has fallen on deaf ears as Cerberus continues with court action and asset stripping. It is unregulated and has no moral compass.

What the money will be spent on

CYBGRSG has recently been supported on a pro bono basis by some leading legal and claims experts who have reviewed the experience of members, and with these fresh set of eyes have established a strong legal defence for those being brutalised by Cerberus.

To come “on the record” to deploy these arguments we will have to pay for this legal advice and so we are asking for contributions to get us parity in the battle against these immoral predators and their array of lawyers and barristers.

We expect to fight at least three cases in Scotland and England before we can go on the offensive with a group action.

Our targets

As we will be making the same argument, although in different hearings, through the same legal team we believe that the initial cost to stop these legal actions will be around £10,000 per case if we have to defend all six cases.

We are hoping that the message will get through that our members cannot now be crushed and Cerberus will back off meaning we are setting our initial target at £50,000.

We anticipate that we will have to take up the cases of others in the same situation but with the precedents established these should be less costly and this is reflected in our stretch target of £100,000.

We are appealing to all those who have been victims of any bank abuse to support this worthy cause by donating something; a little from a lot of people will get us there although larger donations are welcome to get us there more quickly – in some cases above we have little time.

If anyone else is in the jaws of Cerberus and needs help please contact us for more information on how we can help you as well.

Please contribute and spread this page to your friends and colleagues. We need the business community to stand together to protect itself as the FCA and the government are all too happy to turn a blind eye to wrongdoing by large financial institutions that are rarely held to account.

John Guidi

David Farndon, David Proctor & John Guidi CYBG Virgin Money protest
David Farndon, David Proctor & John Guidi CYBG Virgin Money protest

John Guidi is a property professional with over thirty years of experience in the business. He grew his portfolio of 150 rental homes in Scotland in the traditional way with help from high street banks, latterly Clydesdale Bank.

After a previously healthy banking relationship, Clydesdale Bank decided to ‘pull the plug’ without warning in 2012. John had never missed a payment and it is hard to see he had done anything wrong. This triggered a cascade of events which led to his bankruptcy.

John’s two asset-rich companies, Fairoak Ltd and Lightfoot Ltd, were systematically dismantled by Clydesdale. Clydesdale then sold his remaining facility to the ‘vulture fund’ Cerberus in 2015 who stripped all his companies’ assets by selling them at below market value. 

John is now fighting to prevent Cerberus from taking his family home.

In March, John highlighted his plight by going on a hunger strike and camping in front of the Glasgow headquarters of Clydesdale Bank.  After four days the bank agreed to talk to him, but no satisfactory resolution has been achieved, and he is still fending off legal actions. With his supporters, John continues his protest up and down the United Kingdom, despite his fragile health.

This tragic case illustrates the vulnerability of UK businesses to abusive treatment by lenders and vulture funds and the inadequacy of current regulation in preventing it.

https://www.theguardian.com/commentisfree/2019/mar/17/one-mans-fight-exposes-the-greed-that-still-drives-big-banks

https://www.thescottishsun.co.uk/news/4009311/glasgow-businessman-hunger-strike-john-guidi-clydesdale-bank/

David Farndon

David Farndon's Mum - Facing eviction as a result of CYBG Virgin Money and Cerberus
David Farndon’s Mum – Facing eviction as a result of CYBG Virgin Money and Cerberus

David Farndon purchased his first property in 1990 and worked tirelessly building his property portfolio to a value of over £3 million.  He trusted the friendly faces at his bank; he was a loyal customer, always paid on time and never defaulted on his loans.

He was a generous man and keen to give back, he was greatly involved in the local community, volunteering at Francis House Children’s Hospice and Wythenshawe Hospital, setting up the Eco Club at the school, and chairing the school PTA.

Then out of the blue and for no apparent reason, Clydesdale Bank said they wanted him to switch his loans to fixed rates after telling him interest rates were only going to go up. Clydesdale failed to tell him about the huge cost of breaking the loans.. When interest rates dropped David was unable to switch to a cheaper loan product.  All efforts to resolve matters were rejected by the bank. Things got worse when Clydesdale Bank sold his loans to Cerberus, harassing him to sell the property where his elderly mother lived. 

Afraid that any day they would make his mother homeless, David couldn’t sleep because of the worry and his mental and physical health deteriorated.  He could no longer afford to send his daughter to her special needs school, he couldn’t afford the vet’s bills and had to sell his car. One day David was found wandering around the streets not knowing where he was and was sent for a brain scan. 

David has no money to fight Clydesdale Bank or Cerberus and his credit rating has been affected to the point he cannot get a phone or lease a car. Bailiffs are knocking at David’s door as he cannot pay the council tax and other bills relating to his properties, as although the receivers are collecting his rents, he is still responsible for bills at his properties. 

David needs your help to fight his corner against Cerberus and pursue a claim against Clydesdale Bank.

Terry & Joe Jeavons

Joe and Terry Jeavons in Court pursued for eviction by Cerberus, mis-sold loans by CYBG Virgin Money
Joe and Terry Jeavons in Court pursued for eviction by Cerberus, mis-sold loans by CYBG Virgin Money

In 2008 Terry and Joe Jeavons borrowed money from Clydesdale Bank to refinance six apartments they had built to provide for their retirement pension.

The Jeavons believe Clydesdale Bank created a series of events to force them into default, culminating with the bank increasing their interest rate at a time when rates were falling. This led to the sale of some of their apartments below market value. The bank then instructed the Jeavons to empty their apartments meaning there was no rent to pay the loans. Clydesdale refused to negotiate. Unbeknown to the Jeavons they had been sold toxic loans with huge hidden break costs and it was these undisclosed costs which were preventing them from refinancing away from the bank.

Next, Clydesdale Bank tried to force the Jeavons to sell all the apartments but the Jeavons refused. In 2015 the bank dismissed the Jeavons’ complaints and sold their loans to Cerberus who demanded hugely inflated mortgage repayments, twice the “normal” amount. The repayments demanded were unaffordable, and so Cerberus appointed receivers over the apartments, one of which is their home.

Since 2015 Joe Jeavons has been in and out of hospital extremely ill with sepsis and remains under medical care today with septic arthritis, poor kidney function and high blood pressure. Joe needs two operations, but these cannot be undertaken with the sepsis still in his body. The stress of the relentless court action by Cerberus has taken its toll on Terry’s mental health, she continues to be treated for stress and anxiety by her GP.

The Jeavons put all their savings into their project. They have continued to defend themselves in court against Cerberus as ‘litigants in person’ as there is no money left for lawyers. Due to inexperience they have made mistakes in the court process and have been penalised by being debarred from defending themselves, whilst Cerberus abuse the court process and run up costs against them.

On 22nd July 2019, the Jeavons have an oral court hearing for permission to appeal and desperately need financial help to get proper legal representation to stand up to the injustice to fight back.

David Proctor

David Proctor had banked with Clydesdale Bank as a private customer since 1998. In 2005 Clydesdale encouraged David to transfer his two business accounts to Clydesdale.

David’s business, New Cornwall Developments was sold a ten year fixed rate toxic loan to fund a long term property investment. In 2013 David was advised by the bank it wanted the loans repaid four years before the due date in July 2017. David had no option other than to sell the property investment at below the market value, a loss of nearly £3 million. David’s business was charged £600,000 of hidden undisclosed break costs and his company’s loans sold to Cerberus in 2015. David was forced to place the business into a company voluntary arrangement (CVA) and is now fighting Cerberus who is pursuing a personal guarantee given in support of the toxic loan.

David’s other business, The Proctor Partnership Ltd transferred its loans to Clydesdale Bank in 2008 entering into a ten year joint venture agreement with the bank to help reduce Clydesdale’s losses on another customer’s bad debt. Under the JV Clydesdale agreed to fund the proposal and after ten years any capital gain would be shared 40/60 with the bank. In 2013, five years before the end of the JV agreement, the bank advised it was pulling out and wanted the loan repaid. In June Clydesdale Bank sold David’s second business loan to Cerberus who forced the sale of the property at below market value and is now pursuing David for the shortfall of £300,000, again under a personal guarantee.

Neither company defaulted on any of its banking covenants and never once missed an interest payment. Clydesdale Bank’s actions were solely as a result of its policy to pull out of property lending and allow its parent company, NAB, to exit the UK market.

Scott Simpson

Scott and his wife re-mortgaged their family home and borrowed money from Clydesdale Bank in 2002 to set up a property company, Property For Sale or Let Ltd, to provide for a pension in retirement. By 2008 the company had assets of £2.8 million.

Scott trusted Clydesdale Bank implicitly and to advise him correctly, so when the bank told him interest rates were going to rise for the foreseeable future, Scott accepted the bank’s recommendation to take out a series of fixed-rate loans between 2005 and the beginning of 2008. 

When the financial crash occurred in 2008 Scott asked the bank to switch to cheaper variable rate loans which would have saved his company £10,000 per month. The bank over the following six months led him to believe the loans would be switched to cheaper rates.  In April 2009 it was clear the bank did not want to break the existing loans and switch; the reason why only became clearer much later on in 2013. The loans had huge hidden and undisclosed breakage costs which would have put his business under threat had the switch to cheaper loans materialised.

Scott’s business continued to pay the high rates until 2013 when all borrowing would convert to much cheaper rates until 2023. Unfortunately for Scott, the bank had other ideas and, under threat, reduced the overall loan term by ten years at threat of calling in the loans.

In 2013 Clydesdale Bank valued the properties of Scott’s company at between £1.2 million and £1.8 million, despite a figure of £2.8 million in 2008 and 2011, clearly, the bank trying to engineer default. 

After Scott’s proposals to refinance were refused in 2013, Scott complained to the bank who accepted he could not have known about the potential scale of breakage costs applying to the company’s loans but refused to offer any compensation. The company’s complaint was referred to the Financial Ombudsman Service, but Clydesdale Bank sold the loans to Cerberus, who appointed administrators and eventually stopped the company’s complaints with the Ombudsman.

In 2016 and 2017 Cerberus and their appointed administrators, Duff & Phelps issued three claims/actions against Scott and his wife. 

Since this time Scott and his wife have had their retirement property sold under value and outside the auction it was to be sold at, and been in court six times, recently having to appear as a litigant in person as Scott could not afford legal representation.

Scott has one last chance on the 22nd July to save his family from destitution but without legal support, he has little chance.

The Simpsons are mentally and financially broken, they have no equity in their only asset, the family home of 25 years, no pensions, and no way of stopping the vexatious onslaught from Cerberus and their appointed administrators, Duff & Phelps, without your help.

Donate to our crowd justice campaign here.