MoneyThing has gone into administration, as it cannot afford the costs of a legal dispute with a borrower.
The peer-to-peer business lending platform announced in December 2019 that it was winding down its activities, blaming lower investor confidence and fierce competition in the lower-risk business loans market.
But earlier this month, it warned that it may have to enter administration if it did not reach a settlement agreement with one borrower over whether it is owed a portion of a loan that fell into arrears.
“The directors of MoneyThing have taken this decision in order to protect the interests of the companies’ creditors as a whole,” MoneyThing said in an announcement on its website.
“We have taken into account the tougher trading conditions experienced in 2020 as well as litigation by a MoneyThing borrower.
“The joint administrators will assume responsibility for managing the companies’ affairs. They will continue the orderly wind-down of the remaining MoneyThing P2P loanbook, return monies to lenders and conclude the firm’s business activities.
“The appointment is not expected to have a material impact on lenders or borrowers.
“MoneyThing’s existing directors will continue to provide full support to ensure a smooth handover and will remain involved in the business’s operational activities, reporting to the joint administrators.”
Tom Straw and Milan Vuceljic of Moorfields Advisory have been appointed as joint administrators.
Investors will continue to be credited capital and interest as per the terms they have signed up to with updates continuing to be provided through the lender portal.
Investor queries should be directed through the P2P platform as normal, but if they have any specific queries regarding the administration, they can contact the joint administrators by emailing: firstname.lastname@example.org or writing to: Moorfields Advisory, 88 Wood Street, London EC2V 7QF.
The Financial Conduct Authority, which also announced the administration, said that it is aware that some companies may approach customers of MoneyThing, offering to help them bring claims against the company and warned consumers to be cautious if approached by one of these firms.
It said for the majority of MoneyThing’s clients, there is no benefit in involving a third party in making a claim and any customer who believes they have a complaint against the firm should contact the joint administrators in the first instance.