Type of refusal

Non-enforcement in crowdinvesting

In crowdinvesting, refusal rarely looks like a broken promise. It looks like a platform that stops paying interest, a nominee that stops responding, or an SPV that reports a write-down with no supporting accounts. The investor's legal claim runs against that structure. The structure decides what happens next, regardless of how the underlying business is performing. Other forms of non-enforcement are set out on the O8 overview.

The contractual mechanism used

Most crowdinvesting agreements route the investor's money through a nominee or a special purpose vehicle rather than to the issuer directly. Subscription terms usually give the platform or the SPV discretion to suspend distributions, extend maturity, or reclassify the instrument as subordinated debt once the underlying project underperforms. That discretion is drafted broadly enough to cover almost any shortfall. The clause behind non-payment is rarely called a refusal. It is called a suspension or a change in repayment priority. The mechanics of this asset class are set out on the crowdinvesting and platform debt page, and the broader pattern is covered under payment and redemption defaults.

The document that decides the framing

The subscription agreement decides whether the investor holds a proprietary right in the underlying asset or only a contractual claim against the platform or the SPV. The marketing materials carry no legal weight on this point. In most structures the claim is contractual, ranked behind the SPV's own creditors and behind any secured lender to the project. Where the instrument is styled as a loan note, the note terms and any security package govern what can be enforced and against whom. Portugal and the UK use different document layers for the same product. Those layers are set out separately on the Portuguese structure page and the UK structure page.

The cross-border question

The investor, the platform, and the underlying project are often in different jurisdictions. A judgment against the SPV or the platform is useful only where that entity holds assets, which is rarely where the investor lives. Recognising and enforcing a foreign judgment is therefore a separate procedure, covered under cross-border recognition and enforcement. The route differs by country pair, shown here for US to Cyprus and US to Germany. Whether an interim measure is available while that process runs depends on the case file. This firm does not charge success-based fees, and its registration is checked in the public register.