Collateral loanbook ‘remains challenging’ two years since collapse

Collateral investors are still unclear about how much money they will get back from the collapsed peer-to-peer lender, more than two years after it entered administration.

BDO, which is now managing the liquidation of the company, said it has completed reconciliation of individual investor loan exposure and is awaiting feedback from investors to check the documents for accuracy.

However, BDO’s annual liquidation report said the realisation of the loanbook had “proved particularly challenging.”

It has taken enforcement action on the majority of the platform’s property loans and work needs to be done to make the underlying security marketable for sale, while the pandemic has made it harder to sell.

Read more: The Collateral administration two years on

Even where sales have been made, there are still expenses to be paid so the money has not yet reached BDO.

There are still issues with valuations of Collateral’s P2P pawnbroking loanbook and BDO said it is seeking clarification from the directors on discrepancies.

BDO is also awaiting a response on a discrepancy between the balance held in the client account and Collateral’s records.

“Distribution levels will depend on the quality of the loanbooks and the associated costs incurred to secure a settlement or sale of the underlying property,” BDO said.

“Based on the legal advice that we have received to date, and without waiving privilege in respect of the same, the platform loans are assets held on trust on behalf of investors.

“The return to investors will vary significantly between different loans based on the net realisations achieved.

“Accordingly, each investor will in all likelihood receive a different rate of return from the other investors, depending on their own particular exposure to the loans in their own portfolio.”

BDO said interim distributions will be made on some recovered loans once investors have reviewed their exposure.