FundingSecure has reached six months in administration, with little clarity about what progress has been made.
CG & Co was appointed as administrator for the collapsed peer-to-peer pawnbroking platform in October 2019 and now has a month to file a six month progress report.
Here are four questions that will hopefully be answered.
How much is in the client money accounts?
The administrator highlighted “significant failures” by the company in properly managing client account funds in its initial findings last year.
Loans to borrowers were “from time to time” a mixture of client and company money and it is unclear who owners some of the assets and who is entitled to any money gained from their realisation.
It had sought permission to take legal advice on asset ownership, so investors will be hoping for extra clarity.
What are the underlying assets worth?
CG&Co warned in March that there may be discrepancies between loan valuations and what some of the property developments are actually worth.
CG & Co said FundingSecure instructed valuers verbally but did not always instruct the basis of the valuation in writing.
It warned that this may lead to legal action against valuers.
How much has been recovered?
As of March, CG & Co was reviewing the actions of loans that were already in recovery by FundingSecure before it collapsed as well as those that have collapsed since the platform entered administration.
Investors will also want to see if the coronavirus outbreak is delaying the recovery process.
RSM, the administrator of P2P property platform Lendy, gained a three-year extension to its administration last month in part due to restrictions caused by the pandemic, so investors may be nervous that the same could happen here.
How much could investors get back?
CG&Co was unable to provide an estimated outcome at the end of last year due to client money discrepancies and also because the loanbook was found to be incorrectly labelled, with loans described as performing actually just being extended.
There was £2.02m in one client account and £797,160 in another, based on a CG&Co update at the end of 2019.
The company’s statement of affairs at the time, provided by FundingSecure director Nigel Hackett, shows £937,011.87 is owed to unsecured creditors but Hackett said he was uncertain of the value of fixed charges – including securities and director loan accounts – as he was unaware of the position of the company’s former executives.
There is also 21,381 owed to employees, £3m for a floating charge creditor, £3,525 in called up shared capital from ordinary shareholders and £937,011.87 is owed to unsecured creditors.
Investors will be hoping that progress has been made in making sense of these numbers.