Lendy investors were collectively paid out £1.98m in the six months to 23 November, while administrators’ fees rose by £499,397 over the period.
A progress report from administrator RSM showed that it recouped £2.52m in gross realisations over the six months – £1.7m from development finance loans and £800,000 from property bridging loans.
There are currently 21 live bridging loans with an outstanding value of £27.6m while there are 15 live development finance loans with an outstanding value of £79.6m.
18 of the 21 live bridging loans and 10 of the 15 live development loans have formal insolvency proceedings against them, with either receivers or administrators having been appointed.
Lendy entered into administration in May 2019, leaving more than £160m outstanding on the loanbook, with at least £90m of those funds in default.
The administration has been mired with difficulties, with RSM having to unpick “significant issues in the company’s underwriting and administration process”.
RSM’s time costs incurred since its appointment in 2019 have now hit £4,496,930, including investigation time, according to the latest progress report.
There has also been a lengthy dispute relating to the ‘distribution waterfall’ structure, which resulted in a court case between investors and the administrator.
In August, the Lendy Action Group (LAG) – representing Lendy investors – won its legal case against RSM, with the judge ruling for model 2 (M2) investors to be given priority in distribution payments.
M1 investors are defined as creditors, meaning their eventual payouts will be pooled with other creditors, including the Lendy directors, while M2 are defined as investors, which means that they may be able to recover funds directly from the loans that they helped to fund.
RSM said it is in consultation with the various stakeholders to agree a cost basis for costs already incurred to realise funds for the M2 investors, following LAG’s legal victory.
In its latest progress report, RSM said £2.42 owed to Lendy is being held in the client account for the benefit of M2 investors and will be distributed when an agreement is made between the relevant stakeholders.
Meanwhile, there have been no further realisations of M1 loans. The joint administrators said during the six-month period several investors raised queries in respect of a development finance loan and its treatment as a M1 loan and an action group has since been formed.
Last year, RSM received court approval to extend the administration process by three years to 23 May 2023. Then, last December, it warned that the process could even overshoot the 2023 deadline.