Lendy administrator costs breach £6.2m
Lendy’s administrator has racked up more than £6.2m in fees since the property lending platform collapsed in 2019, with no end to the process in sight.
Lendy fell into administration in May 2019 and RSM was appointed to oversee the process of unpicking the peer-to-peer lending platform’s £160m loan book, which included £90m-worth of defaulted loans. The administration process has been extremely complex, due to extensive corporate governance issues, the nature of Lendy’s business model and a number of court cases disputing the way realised funds should be distributed.
Read more: Lendy administrators warn of extended lead times for withdrawals
The latest report from RSM revealed that its fees totalled £382,622 during the six-month period to 23 November 2023, bringing the total time costs incurred since appointment to £6,271,344.
“The quantum of costs and expenses is higher than the estimates previously provided to creditors on 15 July 2019,” said RSM. “This is because the joint administrators were unable to provide a realistic estimate due to the uncertainty on the work that we required be undertaken by third parties.
“Legal costs incurred have been high due to the complexities of the case and the required actions that the joint administrators have been required to take.”
Law firm Shoosmiths, which advised on a range of issues including defending against claims relating to security on loans and pursuing negligence claims against surveyors and solicitors, has incurred almost £4m in time costs to date. The firm also has unbilled disbursements totalling £122,598.
Earlier this year, RSM successfully applied to the court to extend the administration process to 23 May 2025.
“It is not possible to ascertain at present when the administration will end,” RSM said. “Further information will be provided in subsequent progress reports.
“It is currently anticipated that the company will exit administration by way of Creditors Voluntary Liquidation.”
RSM’s report also showed that there are currently seven live development finance loans (DFLs) with an outstanding value of £17m. It defines a live loan as any loan where the administrators are pursuing and expect further recoveries, either through asset realisations or claims.
Read more: £1.2m sitting in unclaimed funds for Lendy investors
There were two realisations of DFLs in the reporting period, with £10.48m put into the client account.
The administrator’s report also said that there are currently seven live property bridging loans (PBLs) with an outstanding value of £5.8m. There were no realisations of PBLs during the reporting period.