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Peer2Peer Finance News | September 19, 2019

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Lendy administrator outlines the state of collapsed P2P lender’s loanbook

Lendy administrator outlines the state of collapsed P2P lender’s loanbook
Marc Shoffman

LENDY investors are likely to receive an average of 57p on the pound for development finance and 58p for every pound from bridging loans funded on the collapsed peer-to-peer lending platform.

RSM, administrator of Lendy since its collapse in May, has revealed its first statement of affairs, warning of a lack of clarity over the value of loans and who the unsecured creditors are.

The document shows that 22 of the 29 bridging loans made via the platform are in insolvency proceedings, with 14 out of 25 development loans in the same situation.

The document reveals the outstanding value of the bridging loans is £36m, secured against assets historically valued at £81m.

However, RSM warns the current reported values are “significantly lower.”

There is a notable concentration of assets in Scotland with £10m of the £36m being secured against Scottish assets.

Some of the schemes were dependent on subsequent securing of development finance and planning permissions, which never materialised.

RSM said there may be other insolvency proceedings but it also hoped to refinance some of the portfolios.

It is estimated that £9.4m is owed to unsecured creditors but RSM is seeking legal advice on which investors this applies to.

It is believed that only investors who lent via the platform up to early 2015 are creditors as they were lending to the platform, then known as Saving Stream, before their funds were distributed.

The platform was restructured late in 2015 so investors were operating under P2P agreements but RSM says Lendy’s terms and conditions are unclear on the position of investors.

RSM said it is aware of a number of claims from investors.

As at the date of appointment, RSM said Lendy had £904,384 in cash.

It currently holds £2.6m in its client money account, which includes sums held by investors and requested for withdrawal, while there is also £7.4m that has not yet been distributed.

RSM said it would provide further details regarding loan repayments “in due course.”

Read more: Interested firms circle Lendy but administrator sits tight

The administrator is seeking approval from creditors to conduct an orderly wind down of the loanbook that focuses on making the appropriate distributions to investors and creditors, to investigate and commence recovery actions and to appoint a creditors committee to help oversee the work.

A meeting and vote to consider the proposals will be held at the National Conference Centre in Solihull on 31 July.

Read more: Lendy administrator: Withdrawal restrictions set to continue