March 25, 2020
Today another e-mail about Covid-19 from crowdestor
E-mail from Crowdestor
Thank you all for your kind and understanding responses, as well as, for placing your concerns, questions and doubts. We have gathered and analysed all the information and would also like to come up with more explanations in order to give more clarification and avoid any misunderstandings.
1. Legal aspect
Starting from mid-March 2020, several EU countries declared a state of emergency and restricted the flow of people. This not only led to proclaim decisions for restricting the physical spread of the virus, but also initiated to provide immediate business support and mitigate its potential consequences.
On March 20, 2020 in Latvia a law has been implemented on The Management of State Threats and Their Consequences in Connection With The Spread of Covid-19 (hereinafter – Crisis law) which introduces temporary measures in several areas to mitigate the possible economic consequences of stabilizing the situation, which came into force from the day when emergency was declared in Latvia – 12.03.2020.
One of the ways in which the legislation seeks to protect businesses and individuals affected by the crisis is by preventing immediate debt recovery processes. The Crisis Law introduces a new order in debt recovery procedure and litigation.
The Crisis Law corresponds for insolvency proceedings prohibiting creditors from filing an application with the court for the insolvency of a debtor until September 1, 2020.
The Crisis Law also foresees new deadlines after which the right to engage in debt recovery takes effect. An application for enforcement of an obligation or the decision on the use of the commercial lien can only be filed after 60 more days are delayed. If contract allows to submit an application of enforcement of an obligation after 30 days are delayed, The Crisis Law prolongs this term to a total delay of 90 days.
Similar regulation in regards to business support and protection is being implemented in other EU countries.
As 80% of Loans are issued in Latvia, followed with loans in Germany, UK, Georgia, etc., we believe we have taken the best possible action forward to correspond with the actual situation in market.
2. CROWDESTOR recovery period
With trying to force payments on struggling businesses right now or defaulting any of the projects it would still be 30 day period waiting from the borrower-investor contract agreement plus the 60 day period enforced by the law, which translates Recovery period. Therefore, patience, continuous communication with Borrowers and trust in the way forward is honestly the best action plan right now. Recovery period applies to all our borrowers.
We respectably would like to address you again with the seriousness of the current state, as it escalates unpredictably and with every passing day we are doing our best to respond to the circumstances, but we all need to recognize that this situation is unprecedented and we cannot draw from past experienced crisis to the ongoing situation in the world right now.
With this in mind, we once again explain that we apply the Recovery period for all our borrowers, as from the moment Crisis act states – 12.03.2020. This means no interest or principal payments during this period will be enforced. Nonetheless, any delayed payments before this period will be enforced.
3. We will monitor the situation and inform you instantly
Some borrowers might be hit less and are in a more confident situation than others and some might be able to manage their payments as consistent, which potentially is true. However, as the situation is unclear right now, the same policy applies to all, until we have received information to state otherwise. We are in persistent communication with all our borrowers and we monitor every single project individually. In case they will be ready to proceed with payments or we will see them as eligible to pay, we will very straight forward invite them to do so. We ask you to keep your trust in our diligence in assessing the situation appropriately.
4. We act in best interest of investors, borrowers and CROWDESTOR
Answering to investors that initiate that we protect only borrowers or we are opening doors to other creditors, adapting the Recovery period, no, we do not protect borrowers nor open doors to others. We have limited legal instruments at the moment and so does other creditors have, but even if we had legal rights to default a project, a defaulting scenario today for many of borrowers will not benefit anyone, as current market conditions are nonexistent or extremely low at best.
5. CROWDESTOR will recover, so will our Investors
More importantly we would like to stress out that following the worldwide situation developing every day, it would be indecent and grossly misleading to tell you that business is running as usual, however with the measures that we are taking now at CROWDESTOR, we are confident in our business and our people to outlive this turbulence and come out even stronger.
This is the time we also utilize to further continue working on our growth and development plans as we have promised earlier in the year. We will follow with news in following one or two weeks.
We want to encourage you to think more of your health and wellbeing these days. Yes, there are some missing days on payment scheme but we will make sure it will turn around in the longer term.
P2B investments are still the most sustainable and meaningful investment opportunity on the market and states will support the businesses segment as it truly adds value to the society, so please do not miss out to be a part of that even in times like these.