Lendy administrator makes latest payout as it adapts to coronavirus pandemic
RSM has expressed confidence that it can continue to manage Lendy’s administration process during the coronavirus outbreak.
The firm said that it has the “appropriate continuity plans in place” to minimise disruption and maintain service levels.
“As much as reasonably possible we will continue to keep our offices open across the country, and our staff have the technology support in place to be able to continue to work remotely when and where required,” it said in an update for investors.
It comes as RSM revealed its latest distribution of recovered funds to investors.
Of the £1.65m realised from a Lodge Hotel loan, lenders will receive £1.05m after third-party costs and money owed that has been set aside because it is contractually owed to Lendy.
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The payout follows the “distribution waterfall” that has been put in place by RSM but is set to be challenged by investors.
The Lendy Action Group (LAG) has raised funds to appoint a solicitor to represent investors who are concerned about “mis-selling and misleading materials, and structure of notes, terms and conditions since Lendy’s inception.”
The proposed ‘distribution waterfall’ sees former Lendy investors split into two groups: model 1 and model 2, which impacts how they receive funds recovered from the collapsed peer-to-peer lender.
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.
Read more: RSM writes off £400k as Lendy admin costs spiral
Model 1 investors are defined as creditors, meaning their eventual pay-outs will be pooled with other creditors – including the Lendy directors.
Meanwhile, model 2 are defined as investors, meaning that they may be able to recover funds directly from the loans that they helped to fund.
