Lendy’s administrators are now able to make an interim distribution of loan proceeds to investors on a number of specific loans.
Priority of payment has been given to the costs and expenses of Lendy, Saving Stream Security Holding Limited (SSSHL) and the investors in connection with the enforcement of the security.
The P2P lender has separated the loans into two models: Model 1 and Model 2.
Due to each model having very different legal bases, the treatment of distributions will also be considered differently between the two.
- B&C roundtable: Are hybrid offerings an opportunity or necessity?
- Two-thirds of Lendy's live loans have administrators or receivers appointed
- Lendy enters administration
Under Model 1, investors will be deemed to have lent money to Lendy, which then subsequently lent money to borrowers as the principal.
Investors under Model 1 are creditors of Lendy for the value of their investment.
Any recoveries from a Model 1 loan — either as a result of enforcing security and selling a secured asset, or by way of the borrower refinancing — will form part of Lendy's administration estate for distribution to all valid creditors of Lendy.
Model 2 will see investors who are deemed to have lent money to the borrowers via Lendy acting as agent with SSSHL acting as security agent for the benefit of both Lendy and the investors.
According to the contractual documentation, each loan has to be reviewed and analysed on its own merit and terms and, as a result, there may be some slight variance to these general distribution principles.