The House Crowd (THC) administration process is expected to take between 18 months to two years, at a cost of £869,527.
According to the joint administrators’ latest progress report, they have incurred £421,995 from 1,366 hours of work since the platform collapsed in February 2021.
It is estimated that a further £447,532 of time costs will be charged in continuing the administration process and finalising the outstanding matters.
The report from 24 February to 23 August 2021 showed that £169,600 in expenses have been racked up, including from IT, solicitors, accountants, payroll, collecting books and storage and in advisory fees to Equitivo. £153,980 has been paid to date with £10,076 remaining unpaid.
During the six-month period, £30,941 in solicitors’ costs have been incurred, of which £25,357 has been paid.
£20,875 has been amounted in time costs from Bovill, which was instructed to provide P2P regulatory guidance, of which £20,275 has been paid and £7,484 in legal fees have been racked up.
Equitivo was retained by the administrators as former consultants to THC to advise and assist with their knowledge of the platform and its processes. The firm’s time costs for the six-month period amounted to £53,980, of which all has been paid.
£13,699 was racked up in pre-administration costs, including from Quantuma, JMW Solicitors LLP and for Equitivo’s pre-appointment consultancy costs. The joint administrators’ remuneration costs including the pre-appointment costs, have not yet been approved, so they said they are taking steps from the court to approve these.
The joint administrators said they will seek an extension to the maximum 12-month period of administration from unsecured creditors.
They said that they will apply to court for directions on the fairest distribution mechanisms to return funds to auto-invest and self-select retail lenders, because it is currently unclear as to how net bridging and development loan realisations should be properly and accurately distributed to retail lenders due to inaccurate record keeping.
The joint administrators said they have successfully reconciled the monies held with third-party payment providers Mango Pay and Woodside Corporate and have asked that all of the concerned retail lenders provide their bank account details so that their funds can be returned to them.
To date they have returned £84,000 out of £103,000 to retail lenders and are awaiting bank details from some investors to pay out the remaining £19,000.
The joint administrators have identified non-invested funds held by THC in its pre-administration bank accounts and have contacted the relevant retail lenders for their bank account details to get this paid.
The joint administrators have recovered around £85,000 from THC’s former solicitors Jane Hartley Associates, which possessed some undeployed monies from the platform’s retail lenders. These funds have been ring-fenced in separate bank accounts before being repatriated back to retail lenders.
They said the directors’ statement of affairs estimated House Crowd Property’s special purpose vehicle loans have a book value of £76,018, but the realisation of this is uncertain.
After advice from CASS and discussions with the City regulator, the joint administrators said they plan to create a process that will make sure funds that come into their possession and are considered client money will be put into segregated ring-fenced bank accounts for retail lenders to be paid to them.
The peer-to-peer property lending platform went into administration on February 26 2021 and Frank Ofonagoro, Jeremy Woodside and Frank Wessely at business advisory firm Quantuma were appointed as joint administrators with consent from the Financial Conduct Authority.