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[ira01]

Shielding assets pre Bk.  Can't be legal

A lot of times, it is perfectly legal.  Like when someone in debt puts money in their retirement account (shielding it from BK), or uses unsecured debt to pay off secured or non-dischargeable debt (like student loans).  In those cases, it depends on the timing.  Since Prosper isn't likely to go BK until the end of the year at the earliest, any of those moves would probably be perfectly legal. 

[yankeefan]

.. and wouldn't Prosper's interest in the LP,(versus the LP's assets) likely be attachable by a winning litigant?

[havastat]

I suspect Prosper has been ramping up its spending, more or less like Lending Club, in the hopes that its business would rapidly balloon and it would be able to cover its expenses with the increased volume and end its period of losses. Its volume has been ramping up, but slowly, nowhere near the rate it would need to begin staunching the fiscal bleeding.

Attempting to protect its assets from potential creditors in the event of bankruptcy and reassure prospective investors psychologically (whether or not its efforts would legally successful) is certainly an understandable move. Since the P1 class are a big group of potential creditors, this includes trying to shield its assets from them. Not in the P1 class's interests, of course, but not exactly nefarous.

[xraider]

I don't know how disclosing an impending bankruptcy would reassure new investors....

[Staneslav]

a

[Ray Kremer]

Meanwhile, as long as there are post charge-off recovery payments, me-thinks we're still "on board"...?

True, but those are just gravy. For the most part, when the three year terms on all your notes are up, you're done. If you've at least broken even at that point you know you will be able to walk away from Prosper relieved that you survived intact. Many others can't say that much. (Though from other statistics I've seen I'm led to believe that most of the big losers were the early lenders and people from the time period when I sunk money in have generally done okay.)

[Xenon481]

Meanwhile, as long as there are post charge-off recovery payments, me-thinks we're still "on board"...?

True, but those are just gravy. For the most part, when the three year terms on all your notes are up, you're done. If you've at least broken even at that point you know you will be able to walk away from Prosper relieved that you survived intact. Many others can't say that much. (Though from other statistics I've seen I'm led to believe that most of the big losers were the early lenders and people from the time period when I sunk money in have generally done okay.)

Actually, according to Prosper's SEC filings, when the 3-year (or X-year) term of your notes are up, you are completely done. Not just "for the most part".

Per Prosper's SEC filings, Prosper keeps all payments made by borrowers after the maturity of the note and are not obligated to send you any portion of those payments.

[Beerbud1]

Meanwhile, as long as there are post charge-off recovery payments, me-thinks we're still "on board"...?

True, but those are just gravy. For the most part, when the three year terms on all your notes are up, you're done. If you've at least broken even at that point you know you will be able to walk away from Prosper relieved that you survived intact. Many others can't say that much. (Though from other statistics I've seen I'm led to believe that most of the big losers were the early lenders and people from the time period when I sunk money in have generally done okay.)

Actually, according to Prosper's SEC filings, when the 3-year (or X-year) term of your notes are up, you are completely done. Not just "for the most part".

Per Prosper's SEC filings, Prosper keeps all payments made by borrowers after the maturity of the note and are not obligated to send you any portion of those payments.

I've gotten post charge off collection payments...

[Xenon481]

Meanwhile, as long as there are post charge-off recovery payments, me-thinks we're still "on board"...?

True, but those are just gravy. For the most part, when the three year terms on all your notes are up, you're done. If you've at least broken even at that point you know you will be able to walk away from Prosper relieved that you survived intact. Many others can't say that much. (Though from other statistics I've seen I'm led to believe that most of the big losers were the early lenders and people from the time period when I sunk money in have generally done okay.)

Actually, according to Prosper's SEC filings, when the 3-year (or X-year) term of your notes are up, you are completely done. Not just "for the most part".

Per Prosper's SEC filings, Prosper keeps all payments made by borrowers after the maturity of the note and are not obligated to send you any portion of those payments.

I've gotten post charge off collection payments...

I was specifically responding to Ray's comment about Post-SEC Notes beyond their maturity term.

[NewHorizon]

And I guess I added to the confusion.  I'm receiving a trickling of post charge-off payments from pre-SEC loans - from a few borrowers who value the social aspect of peer-to-peer lending.  But, alas, cutting lenders off after post-SEC loan maturity kinda puts another dent in that whole thing...

[mothandrust]

I have corporate bonds that were supposed to mature in 2004, and the company went BK in 2003.  Every year the trustee continues to disperse money back to the bondholders--even though the Note is well past maturity.

Worse, this encourages Prosper to delay collection efforts, say, if the borrower is on month 30 of a 36 month term.  If Prosper waits 6 months, then it can go into high gear with collection calls and threats and whatnot, knowing that Prosper will be able to get those last 6 months of payments and screw the lenders.

[xraider]

Exactly, Moth.  With that completely lame move, it's in Prosper's interest to delay collection efforts.  Of course, their crack collection team likely won't be more effective for them than it was for us.

[havastat]

The Prospectus says:

The final maturity date of each Note is the date that is one year after the initial maturity date. Each Note will mature on the initial maturity date,
unless any principal or interest payments in respect of the corresponding borrower loan remain due and payable to Prosper upon the initial
maturity date, in which case the maturity of the Note will be automatically extended to the final maturity date. If there are any amounts under
the corresponding borrower loan still due and owing to us after the final maturity date, we will have no further obligation to make payments
on the Notes of the series even if we receive payments on the corresponding borrower loan after the final maturity date. However, because we
may, in our sole discretion and subject to our servicing standard, amend, modify, sell to a third-party debt purchaser or charge-off the
borrower loan at any time after the 31st day of its delinquency, and because we generally charge-off a loan after it becomes more than 120
days past due, a borrower loan may never reach the final maturity date.

It doesn't look like the initial maturity date matters. It's the final maturity date a year later, not the initial maturity date, that ends Prosper's obligation to repay on the notes even if it receives payments from the borrower.

[Ray Kremer]

Actually, according to Prosper's SEC filings, when the 3-year (or X-year) term of your notes are up, you are completely done. Not just "for the most part".

Per Prosper's SEC filings, Prosper keeps all payments made by borrowers after the maturity of the note and are not obligated to send you any portion of those payments.

Just because they are not obligated to doesn't mean they won't. I know people have gotten recovery payments past the end of the three year term. Yes, per the terms of the filing that could go away at any time, but at the moment it is still happening.

Not that I'm really expecting any more payments from my defaulted notes anyway.

[havastat]

There's been some recent movement in the class action lawsuit. The judge has ruled that members of the class should be notified and ordered seting up a website (www.ProsperClassAction.com) and has suggested the matter could be decided on summary judgement, skipping the need for a trial. Prosper may be thinking about the possibility that it might lose the lawsuit and face liability for damages.