“Unavoidable significant increases” to cost of House Crowd administration
The House Crowd’s administration process faces “unavoidable significant increases” in cost, the administrators have confirmed.
In the latest update to investors, Quantuma also confirmed that the administration process has been extended by at least another six months, with a tentative end date now set for 23 February 2024.
The House Crowd entered into administration on 26 February 2021, with Quantuma appointed administrator soon after. The end date of the administration has been pushed back a number of times since then, with a series of court-ordered six-month extensions put into place.
As a result of these extensions, and the duration of the wider House Crowd insolvency process, the administrators have now warned investors that the cost of the process will increase significantly.
To date, the administrators have received just under £1m in fees for their work on the wind-down.
Read more: The House Crowd administration set to drag on
“As previously explained, the joint administrators informed all investors that the duration of the wider House Crowd insolvency process and realisation of assets is now taking considerably longer than anticipated and made investors aware of the extended timeline until these matters can be brought to a conclusion,” said Quantuma.
“This extended time line has led to unavoidable significant increases to the costs of realising investor related assets, including the joint administrators’ remuneration.”
In March 2023, the joint administrators applied to the court to seek an increase in their current costs’ recovery basis from 11 per cent of all investor asset realisations, to approximately 26 per cent.
A hearing will take place on 30 October 2023, where The House Crowd’s investors will be invited to offer their views on the cost hikes.
“It is important to note that whilst the joint administrator welcomes these representation, the timeline set by the court has resulted in unplanned delays to the progression of the wider House Crowd insolvency process and ability of the joint administrators and liquidators to pay necessary expenditures incurred by the various House Crowd insolvency estate,” Quantuma added.
As a result, the company said that it had “no choice” but to ask the court for a “small uplift of 0.5 per cent to proportion of investor net asset realisations that could be deducted to fund necessary insolvency estate expenses.” This uplift was approved on 28 July 2023.
Read more: The House Crowd administrator awaits court clarity on distributions