High court victory for Fundingsecure investors against administrators
In a landmark decision for the rights of ordinary investors CANDEY successfully acted for a representative group of 3500 peer-to-peer lenders in a dispute with administrators.
Following their appointment, the administrators of FundingSecure Ltd decided to keep for the company 5% of the proceeds from every asset sold, instead of returning those monies to the out-of-pocket investors. This compounded the investors’ woes as the company, currently under investigation by the Financial Conduct Authority, had been poorly managed by its former directors and had accepted grossly overvalued assets as security for the loans to which the ordinary investors contributed.
In a resounding victory for thousands of investors the Judge accepted the investors’ interpretation of the Terms and Conditions of FundingSecure. The Judge said that “the 5% Fee should be payable from the proceeds of realisation of an asset only after deduction of the sums due to the Investors.”
This will be of great significance to thousands of investors who faced negligible returns on investments due to the negligent and possibly fraudulent management by the Company.
The Judge also ordered that the investors’ costs be paid as expenses in the administration. This important ruling will ensure that administrators’ actions, in appropriate circumstances, are challenged by those who stand to lose out, in the knowledge that their costs may be covered by the company.
