Lendy investors are facing withdrawal delays due to a lack of staff to manage requests on behalf of the collapsed peer-to-peer lender.
The peer-to-peer property lending platform entered into administration in May 2019, leaving more than £160m outstanding on the loanbook, with at least £90m of those funds in default.
Its administrator RSM has been making interim distributions from repaid loans but has now warned some investors will have to wait to withdraw money that is owed to them.
RSM said there have been a “considerable number of withdrawal requests” following distributions made on two recent loans.
“As previously noted, the remaining team consists of a small skeleton staff and therefore investors should expect an extended lead time for withdrawal requests to be processed and payments made,” RSM said.
“The outstanding withdrawals will be processed over the course of the next few weeks and the Lendy support team will contact investors for any outstanding know your customer and anti-money laundering requirements.”
The administration process has been mired with difficulties and last year, administrators RSM received court approval to extend the administration process by three years to 23 May 2023.
It comes after the administrator of FundingSecure halted payments to investors, following a new legal claim.
The P2P pawnbroking platform, closed in October 2019 and CG&Co was appointed as administrator.
The administration is ongoing and has been extended by three years but investors were receiving interim payments.
However, these have now been stopped due to a claim from an unnamed creditor.
CG&Co said the creditor has made a claim relating to money in the client account under a legal term called a ‘quistclose trust’.
Under this term, a creditor can lend money to a debtor, which was FundingSecure in this case, for a particular purpose.
The money cannot be spent for any other purpose and will have to be returned if it is misused.
“The administrators have received a claim from a creditor relating to monies paid into the company’s client account prior to the administration, including an assertion that the said monies are subject to what is termed a ‘quistclose trust’,” CG&Co said.
“The administrators are currently investigating this claim and also taking legal advice on the same.
“However, pending proper investigation of the claim and its resolution, the administrators have no alternative but to suspend further payments to the investors by way of distribution from the client account/platform until further notice.”