Creditors report, page-237

This statement of yours is incorrect: ‘My reading of that is that FC's relationship was with BIG's customers, & it should recover its outlays from them. Why they are trying to recover them from BIG now, I don't know.’

The relationship was with Big, as no SMEs had signed up for anything other than allowing Big to come and shoot a free video in their business, as they were going to be ‘specially featured on the review channel’.

The business agreed to allow big to come and film, obviously for Big the hope was that they’d like the video so much once it was done that they’d agree to purchase it to use for their own self promotion.

FC then forwarded the full amount of the potential future sale to Big. I can’t remember the exact percentage splits, but of this money ~25% went straight back to FC as a fee for the service (obviously also falsely inflating their own earnings ), ~35% was able to be used by Big to go and film the business to create the video that they would later try and sell to the sme, and ~45% would be places in an account belonging to FC until a time at which Big secured an actual sale, at which point this remaining 45% was released to Big. If no sale was made, they’d already unfortunelay just spent 55% of the money they hadn’t earned through the sale.

This makes it very clear that FC knew they were forwarding money for a purchase that had not been made, otherwise they would have kept a fee but given all the money to Big and then collected the repayments from the SME over the life of the loan like in your HN example. The fact that they kept this money in their own account until a sale was made, means that they were aware that there was no purchasing sme at the time they originally sent the money to Big, and that they had no contract with an sme to recoup until the point that they released the final 45% in response to a sale.

What hasn’t been discussed (that i’ve read) is that this same sales method was used with the ‘BIG Cares’ program. Big told the NFP charities that they had been selected to feature on the sponsors ‘channel’, and could they come and film them. You can see watching the BIG Cares videos that the people are really grateful to be interviewed and to tell their story. That’s because at the time of filming, they just thought a story was being done on the good work they do. I doubt a cent was actually collected from NFPs, but the bigger loans from FC for these more expensive packages were still counted in the ‘receipts from customers’ that were sold to investors as the cash flow success story.