Loans listed under the new Claims Underway tab are loans for which the security property has already been disposed of and an amount of capital and/or interest remains owing to investors which Lendy is or is preparing to take action to recover. The action is likely to be based upon the liabilities of the borrower under the loan agreement, a personal or corporate guarantee given by a third party against the loan, or the negligence on the part of one of Lendy’s third party professional advisers.
A borrower will remain liable for all sums outstanding under the loan agreement that are not recovered from the sale of the security property. Once the security property has been sold, Lendy may then take action for the recovery of any outstanding amounts against the borrower for this sum. This applies to both corporate and individual borrowers.
Similarly, once the security property has been disposed of we may be able to take action under any personal or corporate guarantee that has been given against the loan. A guarantee against a loan is an agreement entered into by a third party that they will be liable for sums due from the borrower under the loan agreement. Guarantees can be given by both individuals and companies, and the guarantor will usually be connected in some way with the borrower.
If Lendy are unable to recover the full loan amount from the disposal of the security property, this may stem from an error made by one of the third parties who advised Lendy in connection with the particular loan. If the advice given by a third party professional advisor is negligent, and this negligence impacts upon Lendy’s ability to recover the full loan amount, then Lendy may be able to pursue a claim against the third party and their insurers.
We will provide updates for all loans listed under the Claims Underway tab on an ad hoc basis as and when developments occur for us to report on. Where legal proceedings are taken against the borrower or the guarantor(s) or a third party professional advisor, sometimes the information we will be able to divulge will be limited so as not to prejudice our case against the relevant party, or to avoid waiving legal privilege in connection with the legal advice provided to us by our solicitors. We anticipate that these claims will typically take a period of between nine and 12 months from being issued to reaching resolution.