An update on P2P platform administrations

The administration process for collapsed peer-to-peer lending platforms has proved lengthy to say the least, running into several years in some cases.

Here Peer2Peer Finance News updates you on the progress of the ongoing administrations.

Read more: The ongoing legal cases that could shape the future of P2P

Collateral

Collateral collapsed into administration in February 2018 and entered into liquidation in April 2019.

The P2P pawnbroker and property lending platform has been in the news lately with the Financial Conduct Authority commencing criminal proceedings against two former directors of the platform, Peter and Andrew Currie, with both facing two charges under the Fraud Act 2006 and one charge under the Proceeds of Crime Act 2002. Earlier this week, they both pled not guilty to all charges at Westminster Magistrates Court.

Last year, administrator BDO said it was seeking legal advice on setting a deadline for claims from investors before it can start repaying money owed, after a “limited number” of investors disagreed with BDO’s analysis of their loan exposure.

FundingSecure

FundingSecure fell into administration in October 2019.

Last May, FundingSecure administrator CG&Co stopped interim payments to investors after receiving a claim from a creditor relating to money in the client account under a legal term called a ‘quistclose trust’.

Then in November, CG&Co said it had provided a significant amount of information at the creditor’s solicitor’s request and that it had sought advice about the return of investor funds.

It said the suspension of payments to lenders stayed in place while the creditor’s solicitors continue to assert their client’s claim to the funds.

Lendy

P2P property platform Lendy entered into administration in May 2019, leaving more than £160m outstanding on the loanbook, with at least £90m of those funds in default.

Administrator RSM has said it had to unpick “significant issues in the company’s underwriting and administration process”.

In December, the latest progress report from RSM revealed that 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.

Over the six months, RSM showed had recouped £2.52m in gross realisations, £1.7m from development finance loans and £800,000 from property bridging loans.

MoneyThing

MoneyThing was pushed into administration in December 2020 as it could not afford to defend itself against future litigation from a borrower.

Earlier this month, MoneyThing’s administrator Moorfields Advisory said it was unable to provide a clear estimate about loan realisations until the outcome of its 17 February court case on the direction of payments, while its time costs have risen to £588,966.

Its latest progress report revealed that funds held on trust totalled £3.08m from six borrowers as of 20 December 2021, made up of £2.86m in recovery proceeds, £204,581 from default interest held on trust as a contingency and £20,307 was the balance of funds held on trust as at the date of administration.

In October 2021, MoneyThing’s administration was extended until 20 December 2022 and Moorfields Advisory said in the progress report that a further extension is likely.

The House Crowd

The P2P property lender went into administration on 26 February 2021 and the process has already been extended to 24 February 2023.

In the latest administrators progress report in September, administrator Quantuma said it would apply to court for directions on the fairest distribution mechanisms to return funds to auto-invest and self-select retail lenders.

They said this was because inaccurate record keeping made it unclear as to how net bridging and development loan realisations should be properly and accurately distributed to retail lenders.