Investors to get 10 per cent of proceeds from Lendy-backed Gloucestershire project

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  • 21/07/2021
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Investors to get 10 per cent of proceeds from Lendy-backed Gloucestershire project
Investors who backed failed peer-to-peer firm Lendy are expected to receive around 10 per cent of proceeds from the sale of six Gloucestershire properties worth around £1.4m.

 

In an update to investors last week, receivers RSM Restructuring Advisory said that lenders’ contractual entitlement was estimated to be around £104,720. It noted these were interim distributions and there could be further disbursements in the future.

It said that the firm had been trying to the sell the properties since 2016 but that the sales process had been “challenging” as Lendy insisted on securing an unachievable price.

Following its appointment in 2016, the receiver secured a range of offers in excess of £3m, however, these were rejected by Lendy who said that they would only accept offers in accept of £4m.

RSM Restructuring Advisory said that it was not able to secure offers at this level and the level of interest for the assets dwindled between 2017 and 2019.

As the properties would be held for a period of time the receivers asked for more funds to maintain and secure the site, which was declined by Lendy and led to a deterioration of the plot.

The receivers also explained there were problems relating to litigation from crowdfunders who had advanced funds to the borrower, title issues, multiple security and insurance issues as well as securing vacant possession from the original borrowers.

They noted that the underlying conveyancing was “time consuming” due to the delayed completion timetable.

The update continued that total third party costs were estimated to be £672,421, which include £223,611 to insurer JLT Specialty, £156,000 in legal fees to Shoosmiths and £49,199 to RSM itself.

Lendy, founded by Liam Brooke (pictured), went into administration in May 2019 due to concerns around levels of arrears and defaults.

In a progress report in June this year RSM Restructuring Advisory said that there were 16 live development finance loans with a value of £83.1m and 31 live property bridging loans with an outstanding value of £34.6m.

Around 11 of the development finance loans and 28 of the bridges are in insolvency proceedings.

It added that joint administrators had realised £13.3m in gross realisations over the past six months across 12 loans in its loan book.

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