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Peer2Peer Finance News | July 16, 2018

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BDO inundated with requests to join Collateral creditor committee

BDO inundated with requests to join Collateral creditor committee
Marc Shoffman

COLLATERAL investors and creditors have supported the formation of a committee to assist in the administration of the failed peer-to-peer platform.

BDO, which was appointed administrator of Collateral in May, had proposed setting up the creditors committee if sufficient creditors and investors were willing to be members.

It said that both groups of stakeholders had voted in favour of the committee. It also said that it has been inundated with requests to be on the committee itself and will be liaising with nominees.

Peer2Peer Finance News has learned that direct lending specialist BondMason is one of the investors to have put itself forward.

The idea of a creditors committee is to assist the administrators on strategy and approve their fees.

“The administrators would very much welcome the formation of such a committee as they consider that this would provide significant assistance in relation to the issues that we foresee are likely to be encountered in relation to the administrations, particularly in a case such as this where there are a significant volume of interested stakeholders,” BDO said in an update last month.

“Such a committee will be formed of between three and five investor/other creditor representatives who will represent the interests of all investors and creditors.

“Its job is to liaise with the administrators in relation to matters of strategy and also in relation to agreeing the basis and level of the fees.”

Read more: Collateral collapse has far-reaching ramifications

BDO’s latest update said that it has received more nominations than the maximum number of members allowed.

It also revealed there have been no objections to resolutions that will see the Collateral companies wound up through a creditors voluntary liquidation, leaving BDO to manage the administration.

BDO took over the administration of Collateral in April after the Financial Conduct Authority opposed the appointment of Refresh Recovery following the platform’s closure in February.

Read more: Collateral investors may face a returns shortfall