Lendy administrator RSM has made its latest distribution from the collapsed peer-to-peer lender, as investors gear up for legal action regarding payments.
P2P investors received £1.75m from a total realisation of £2.65m.
The remaining amount covers third-party costs and controversial fees owed to Lendy as part of the contracts, worth more than £700,000.
This is part of a “distribution waterfall” RSM is operating for P2P investors on the platform, with funds repaid after costs are deducted for valuations, legal fees and loan recoveries.
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.
The money owed to Lendy is being set aside while RSM seeks legal clarification on its status.
It comes as the Lendy Action Group reached its £75,000 target at the end of last week to challenge how funds are distributed in the courts.
The group said funds will be used to get advice on the best legal strategy and it has provided counsel with “thousands of pages containing amongst other things, mis-selling and misleading materials, structure of notes and terms and conditions since Lendy’s inception.”