LENDY’S administrator has confirmed that only customers who joined the platform since 2015 will be treated as investors, meaning earlier users will need to join the queue of creditors to claim any money back.
The collapsed property platform initially operated a structure whereby investors lent to Lendy itself, which then gave the money to borrowers, known as model 1.
However, this was not deemed as a P2P arrangement and a new structure – model 2 – was set up from 2015, meaning that investors began funding the P2P loans directly.
The administrator, RSM, confirmed in an update that model 1 investors lent money to Lendy so any recoveries will sit on its balance sheet and any recoveries will be distributed to all creditors.
Read more: Lendy distributions begin
Those who invested under model 2 will be treated as investors and have been told they will receive some funds back after costs are deducted for valuations, legal fees and loan recoveries, referred to as the “distribution waterfall.”
RSM said the loan documentation shows all recoveries are held in trust by Saving Stream Security Holding and there is an agreement in place for Lendy to be paid three per cent a year from the date of a default for providing enforcement and recovery services, up to a maximum of 10 per cent.
The documentation also provides for interest, default charges or exit fees to accrue to Lendy, which would form part of the estate to distribute to creditors, but RSM said it is taking legal advice on whether it is the correct beneficiary.
This could result in model 2 investors getting more money back.
“In the event that the administrators determine that Lendy is not legally entitled to all or part of such sums, a further distribution of any deducted sums will be distributed to the relevant model 2 investors,” RSM added.