A crowdfunding campaign set up to take legal action over the way Lendy administrator RSM plans to distribute recovered funds looks set to reach its £25,000 target just one day after going public.
The Lendy Action Group (LAG) – set up by disgruntled Lendy investors after the platform fell into administration last year – wants to challenge RSM’s ‘recovery waterfall,’ which sets out the order in which lenders will be repaid.
It has already raised £21,000 on the Crowdjustice platform this morning, taking it close to its minimum target of £25,000 to pay for legal counsel.
Lendy 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.
RSM has decided that the model 1 group will be defined as creditors, but the model 2 group are investors, meaning that they will be treated differently with regard to the distribution of recovered funds.
LAG has suggested a contribution to the fund of £1 for each £1,000 invested, but said that investors should contribute as much as they can afford. There is a minimum donation of £5.