Investor-lenders collectively received £ 1.98million in the six months leading up to 23 November, while administration fees increased by £ 499,397 during the period.
A progress report from the RSM administrator showed he had clawed back £ 2.52million in gross outputs over the six months – £ 1.7million in development finance loans and £ 800,000 sterling home loans.
There are currently 21 direct bridging loans with an outstanding value of £ 27.6million while there are 15 direct development finance loans with an outstanding value of £ 79.6million. .
18 of the 21 bridging loans outstanding and 10 of the 15 direct development loans are subject to formal insolvency proceedings against them, receivers or administrators having been appointed.
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Lendy took office in May 2019, leaving more than £ 160million overdue on the loan portfolio, with at least £ 90million of those funds in default.
The administration got bogged down with difficulties, with RSM having to solve “important problems in the process of underwriting and administration of the company”.
RSM’s time costs incurred since his appointment in 2019 have now reached £ 4,496,930 including investigation time, according to the latest progress report.
There was also a long dispute over the structure of the “distribution cascade”, which resulted in litigation between the investors and the administrator.
In August, the Lendy Action Group (LAG) – representing Lendy’s investors – won its case against RSM, with the judge ruling that Model 2 (M2) investors had priority in distribution payments.
M1 investors are defined as creditors which means their contingent payments will be pooled with other creditors including Lendy’s directors while M2 are defined as investors which means they can be able to recover funds directly from the loans they have helped finance.
RSM said it was in consultation with various stakeholders to agree on a cost base for costs already incurred to realize funds for M2 investors, following LAG’s legal victory.
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In its latest progress report, RSM said £ 2.42 owed to Lendy was held in the client account for the benefit of M2’s investors and would be distributed when an agreement is reached between the relevant stakeholders.
In the meantime, there have been no further M1 loan achievements. The joint administrators said that during the six-month period, several investors raised questions about a development finance loan and its treatment as an M1 loan and an action group has since been formed.
Last year, RSM received court approval to extend the administrative process for three years until May 23, 2023. Then, last December, it warned that the process could even exceed the 2023 deadline.