Tuesday, 15 January 2013

Couple who used New Labour government financing model as template for their own lifestyle mystified and angry at Judge declaring it to be "completely stupid" ....

Says Bob E in response to this article from The Telegraph:

The judge, who heard the High Court trial last year, said the Gatts had been successful property developers who "lived the lifestyle of prosperous, indeed wealthy, people".

They sold their £2 million home in Kent in 2004 and moved to Melksham Court, a medieval manor house with substantial grounds and outlying cottages [which appears to have cost £4 million]. There, they had space for Mrs Gatt's stable of quarter horses, a £240,000 mobile home, as well as Mr Gatt's Ferrari and collection of Harley Davidson motorcycles.

"Plainly, they were not afraid of borrowing, as some people are, but regarded being overdrawn for business and living purposes as a normal condition, confident of being able to repay when their ship came in," continued the judge.

Disaster struck for the couple in April 2008 when they were refused remortgage finance by RBS on their home, which they needed to plough into development projects. They soon learned that Barclays had provided reports to credit reference agencies stating that Mr Gatt's account was "delinquent", since it was £260,000 overdrawn when the agreed limit was only £1,500.


Graeme said...

wow! that is some discrepancy to be overdrawn 260k against a facility of 1.5K. What exactly were the bankers doing? Did no one ask for security?

Mark Wadsworth said...

G, bankers got paid when they made loans; not when loans were repaid :-)

Lola said...

Is it that we get the gummint we deserve, or does the gummint set the example for us to follow?

I have seen quite a few Gatt's over the years - they all seem to think that property and debt is a one way bet, up.

Graeme said...

as usual, it's the bonus culture....a professional HR department demands targets and objectives for bonus payments. the targets get set and agreed. No one looks to see whether the targets make sense overall.

it's the bonus culture. people get paid to destroy, unless the bonus objectives are worded very intelligently. I look back at bonuses that I could have gained by making stupid decisions that would have weakened the company.

I was a fool.

Woman on a Raft said...

a £240,000 mobile home

Surely it isn't possible to spend that much on a caravan? And, if they did, why not live in it and unload some of the other items pdq and cover the overdraft?

Mark Wadsworth said...

L, bit of both.

G, that explains why the bank lent them money. Or does it explain the Gatts' own behaviour as well?

WOAR, it'll be one of these luxury American things, I've seen them on the telly and yes, you can spend £240,000 on one (gold taps and all that stuff). Perhaps they couldn't live in it because the bank had repossessed it?

Bayard said...

This is nothing new: there is a chapter in "Vanity Fair" entitled "How to live on nothing a year", i.e. on borrowed money. The only difference between that couple and the Gatts is that they borrowed by not paying their bills and the Gatts borrowed from banks.