FUNDINGSECURE became the latest casualty of the peer-to-peer lending sector on Wednesday, leaving 3,500 investors in the dark about the recovery of their funds.
FundingSecure’s administrators, CG Recovery, have said that it is too early to say how much money they will be able to return to investors and when any payments will be made.
“The administrators are now evaluating the company’s current financial position and working to maximise recoveries either in the short or longer term,” CG Recovery said. “The administrators will continue to update the creditors and investors with the progress that they are making with their investigations.”
Investors’ online accounts are currently frozen, meaning no deposits or withdrawals are possible.
The administrators said they will be providing updates directly to investors, including information on individual loans as appropriate.
FundingSecure’s collapse has once again thrown into the spotlight the question of whether investors are defined as creditors.
CG Recovery makes a distinction between the two. The administrators say that within eight weeks of their appointment, they will be contacting creditors with details of their proposals for managing the administration.
Creditors will receive a letter with access to a website portal from where they will be able to download the administrators’ proposals.
However, it then goes on to address investors separately, saying that it will be providing updates to investors directly via the email addresses previously provided to FundingSecure. This suggests that they will be treated differently to creditors and will not necessarily be contacted with the same proposals.
There is also the question of whether CG Recovery will create a creditors committee and include P2P investors. Lendy’s administrator, RSM, appointed five people to its creditors committee, including investors Bruce Hattersley and Adam Bunch, co-founders of the Lendy Action Group.
Meanwhile, the Financial Conduct Authority has warned FundingSecure investors that some companies may approach them, offering to help them bring claims against the collapsed P2P platform.
The regulator has said that for the vast majority of FundingSecure’s clients, there is no benefit in involving a third party in making a claim and that investors should contact the administrator in the first instance.
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