Type of refusal

Refusal to refund in crowdinvesting

In crowdinvesting, refusal usually appears as a platform freezing payouts after announcing that the issuing SPV is in default. The instrument is typically a loan or subordinated note. The freeze is framed as a contract event, drafted into the terms in advance. See how these instruments are structured in the crowdinvesting and platform debt primer.

The contractual mechanism used

Refusal is written into the loan agreement before any dispute starts. Most crowd debt carries a subordination clause: the claim ranks behind senior creditors, and under qualified subordination it is postponed for as long as repayment would itself trigger the issuer's insolvency. The platform is typically only a servicer under the terms, with no payment obligation of its own. A separate clause lets it suspend payouts on notice of impending default, without any court having found that a default occurred. That clause is often what a claim under our refund and non-delivery claims work has to unpick first.

The document that decides the framing

Two documents can decide how the claim is framed. The loan or participation agreement gives a contractual right to repayment against the issuer, sometimes against the platform if it gave a guarantee, rarely against any asset directly. A pledge, trust deed or security agreement, where one exists, gives a proprietary right capable of following collateral through the issuer's insolvency. Crowd debt is usually unsecured, so the first document controls. Where a security interest was granted, the second document decides who ranks above the investor. Our payment and redemption default service and the reading on demanding money back when a refund is refused abroad both start from this distinction.

The cross-border question

Three places can matter: where the issuing SPV is seated, where the platform operates, and where the investor's money physically sits once collected. Enforcement lands where the issuer or platform holds assets. That place is often different from where the investor lives. This is covered in the broader refusal to refund overview and in the insights on this refusal type. Whether an interim measure can hold assets in place before judgment is established from the facts of the case, and which authority is competent for a given contract is determined by the applicable procedural rules. The underlying loan terms differ meaningfully by governing law, compare the German-law version of this asset against the Dutch-law version. The firm does not work on a success-fee basis, and its registration can be checked in the public register linked below.