The administrator of collapsed peer-to-peer lender Collateral is seeking legal advice on setting a deadline for claims from investors before it can start repaying money owed.
Peer-to-peer pawnbroker and property lender Collateral collapsed into administration in February 2018 and entered liquidation in April 2019.
The administrator BDO has previously highlighted issues with matching investor funds to loans and recovering money that has been lent.
Its latest liquidation update revealed that a “limited number” of investors disagree with BDO’s analysis of their loan exposure.
BDO said it has asked investors to provide proof if they think they are owed money and it is also seeking legal guidance on setting a deadline for when investors can make claims.
It said that payments can only be made to investors once this is resolved.
“Without waiving privilege in the legal advice received, the liquidators have been advised to seek directions from the court with a view to setting a bar date by when investors must assert any new trust claims and raise any queries in relation to their existing trust claims,” BDO said in an update to creditors and investors.
“Following that bar date, all investors’ trust claims will be finally quantified and investors will not be permitted to assert any other trust claims.
“The liquidators will also seek court directions to provide a mechanism for dealing with any disputed claims.
“Once investors’ claims have been finally determined under this court-directed procedure, the joint liquidators will be in a position to make a first distribution from those loans that have been realised to date.”
The report also highlighted that Collateral’s directors have “provided limited assistance,” highlighting discrepancies with money held in client accounts, bank accounts and the value of loans.
BDO said the Collateral directors have not been able to “satisfactorily explain” significant discrepancies in values of its P2P pawnbroking assets.
These will now be put up for auction to recover funds.
BDO said the realisation of a “significant number of the properties” has been challenging as there have been issues with prohibition notices, construction defects, planning and health and safety issues, unauthorised tenants and issues with the security registered.
This will affect how much investors will get back, BDO warned.