Lendy investors may get just half of their money back
Administrators RSM said investors are expected to receive around 57p and 58p in the pound from the development finance and bridging loan books respectively.
However, individual loan recovery rates could range substantially between 7p to 100p of the capital provided by investors.
Lendy facilitated crowdfunded loans which were used to fund property development before it went into administration in May.
It admitted that two thirds of its active loans worth £112m were overdue in October last year. It restructured in December with three new board appointments, after asking the regulator to help with a legal dispute after two loans worth almost £9m went past due.
The estimates released by the administrator to creditors this week reveal the shocking state of the platform’s loan books.
In total, Lendy has 54 outstanding bridging and development finance loans worth a combined £152m, with 36 in insolvency proceedings.
The development finance book has 25 live loans worth £116m, with 14 in the insolvency process.
RSM also highlighted potential issues with Lendy’s anti-money laundering (AML) process.
“Before the joint administrators release any funds to investors they are required to ensure compliance with appropriate AML legislation,” the administrators said.
“An initial review of the company’s existing AML and client take-on procedures has noted certain deficiencies that have required further investigation.”