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Peer2Peer Finance News | September 16, 2019

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Confusion surrounds status of Lendy provision fund

Confusion surrounds status of Lendy provision fund
Kathryn Gaw

LENDY’S administrators have warned that recovering funds from the defunct platform’s provision fund “is a complex point and is not anticipated to be resolved in the short term.”

In a letter to investors, administrators RSM confirmed that the company which held the provision fund – Lendy Provision Reserve Limited – has also entered administration, and RSM is working with the bank to secure the monies held. However, this is expected to be a long and “complex” process, with further updates and clarifications expected soon.

In the same letter, RSM reassured investors who have requested balance withdrawals that their money is being held within the client account, even if the amount has been deducted from their ‘Available Funds’.

RSM confirmed that Lendy’s bank balance matched its client account balance of £10.17m. However, since Lendy has been made subject to an asset restriction by the Financial Conduct Authority (FCA), withdrawals from the company’s bank account have been limited.

“No payments will be released until a full reconciliation has been completed,” the administrator added.

A further update on Lendy’s accounts and client and investor withdrawals will be made later this week, and RSM will publish a full report to creditors before 19 July. This report will outline the administration strategy and RSM’s proposals for achieving the purpose of the administration, for each of Lendy’s companies.

Lendy went into administration on 24 May after a series of rising defaults and investor complaints. Since then, an action group has been set up by angry Lendy investors, to ensure they are treated fairly in the administration process.

Read more: Lendy administrator: Withdrawal restrictions set to continue