LENDY’S administrator RSM has said that its remuneration and expenses have overshot its original estimates as the process has been “very much more complex” than it envisaged.
Between 24 May 2019 and 23 November 2019, RSM said it has incurred time costs totalling £1,736,829, working on the administration of the collapsed peer-to-peer property lender.
As of 23 November 2019, RSM has logged £926,377.94 of expenses, including more than £50,000 on legal fees and more than £6,700 on stationery and books.
“The loanbook has proved to be in a significantly worse state than was immediately ascertainable on our appointment,” said RSM in a 19 December update.
“Negotiations with borrowers and overseeing both the realisation of property assets and the performance of receivers/administrators to realise secured assets have been complex, difficult and time-consuming.”
Other issues that took longer than expected included the analysis of the legal position of ‘model 2’ loans – a different structure that Lendy implemented for investors in 2015 – and compliance with anti-money laundering regulations.
The high volume of investor communications was also cited as a factor, as well as the need for RSM to take on some of the more routine functions to assist in the administration due to “staff losses” and “under-performing staff” on the Lendy team.
In July, RSM proposed a fee cap of £1.025m plus VAT for the first 12 months of the investigation, which was voted on by Lendy’s creditors committee.
“The amount of the expenses incurred is higher than the estimate provided to creditors on 15 July 2019,” RSM said.
Lendy fell into administration in May with a loanbook value of £152m, leaving thousands of investors in the dark about the recovery of their funds.
RSM said in the update that £7.3m has been realised collectively from eight loans following the platform’s insolvency.
RSM said that there are currently 20 live development finance loans (DFL) with an outstanding value of £101m. 15 of the live loans currently have formal insolvency proceedings against them.
Four DFL loans have been realised, with gross realisations of £2.8m.
Meanwhile, there are currently 22 live property bridging loans (PBL) with an outstanding value of £29m. 16 of the live loans currently have formal insolvency proceedings against them.
Four PBL loans have been realised, with gross realisations of £4.5m.