MoneyThing’s administration will rack up £300,000 more in fees than previously anticipated, its insolvency practitioners have said.
Administrator Moorfields Advisory, which has been overseeing the wind-down of the peer-to-peer lending platform since 2020, said that fees are now expected to total £728,837.50.
This is up from a previous estimate of £430,367.50.
“The first fee estimate was provided at an early stage in the administration when the administrators were still establishing the status of the loans and degree of work required to oversee them and operate the platform,” the administrator said in its first progress report, filed with Companies House.
“Since the administrators issued their proposals it has become clear that the volume of work required to manage the wind-down of the loan portfolio and operate the platform is considerably higher than previously estimated.”
The number of outstanding loans has reduced from 50 to 38 over the administration period to date, which is less of a reduction than the administrators were anticipating. This requires a longer period of management and oversight with regular involvement of senior staff, the administrator said.
MoneyThing was pushed into administration in December 2020 after revealing it could not afford to defend itself against future litigation from a borrower.
It had announced plans to close in 2019, blaming lower investor confidence and fierce competition in the lower-risk business loans market.
The administrator’s progress report also revealed that there is uncertainty surrounding the distribution of recovered funds to investors.
Under the structure of MoneyThing, loans are held and protected by a separate company, MoneyThing Security Trustee Limited (MTSL).
The main platform, MoneyThing Capital (MCL), acted as an agent for MTSL, and took charge of arranging loans and chasing payments. It is now dealing with loan portfolio, which is largely in default.
The administrator had understood that MCL was able to recover certain costs in priority to repayment to lenders, but there is now uncertainty over this position due to various borrower loan agreements and lender terms and conditions, as well as arrangements between MCL and MTSL.
The administrator is submitting an application to the court for directions on where MCL’s costs of dealing with defaulting loans rank in priority to lender repayments.
“Until the outcome of this application is known, the joint administrators are unable to provide a clear estimate of future realisations from this source,” the report said.