FundingSecure administration held up by pandemic and fee dispute
The one-year anniversary of FundingSecure’s collapse has been marked by an extension to its administration, alongside court proceedings over a fee technically owed to the company from each loan.
Appointed administrator CG&Co had a three-year extension until October 2023 approved last month after it argued that the pandemic was delaying recovery and realisation attempts.
Court proceedings also started in October, regarding a five per cent redemption fee owed to the peer-to-peer pawnbroker on each loan, which is mentioned in its terms and conditions.
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Investors have argued that they were not aware of this and others say it had been waived on various occasions.
Documents from CG&Co show it has sought legal opinion from three independent solicitors who say the fee is correctly levied and payable. The issue will now be decided by the high court in Manchester.
Evidence from each side on why the fee should or shouldn’t be paid is due by the end of this month and a legal direction will be issued 28 days after.
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FundingSecure entered administration in October 2019 after being overcome by litigation surrounding inappropriate allocation of investor money and a separate claim regarding fraud on a portfolio of art loans.
CG&Co identified several issues with how the platform was run including client money failures and loans being mis-labelled as performing when they were in default.
An update from CG&Co in May 2020 said £11.9m has been recovered so far, out of total investments of £67.5m.
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