RSM has written off £400,000 associated with the spiraling costs of the Lendy administration.
By February 2020, RSM had estimated that the administration costs for the first year would reach £2.5m. In July 2019, the Lendy creditors committee approved a first-year fee cap of £1.025m plus VAT.
However, between 24 May 2019 and 23 November 2019, RSM incurred time costs totalling more than £1.7m, which led to a new request for £2.1m to be made available to cover costs.
The peer-to-peer property development platform fell into administration in May 2019, following months of speculation about mounting defaults in its loanbook.
“We believe the costs in the first year will be £2.5m,” said Damian Webb, RSM’s lead administrator on the Lendy case.
“But we’ve only asked for £2.1m – we’re writing off the remaining £400,000.”
Webb told Peer2Peer Finance News that “this is not an ordinary administration”, and “a lot of the issues that we’ve identified I’ve never come across before.”
He added that he and his partner Philip Sykes have been spending at least 2.5 days per week on the case, as well as having a full-time member of staff managing the loanbook, with two to three other team members working on other related matters.
They have also seconded lawyers to advise on recovery action.