5 questions platforms should be asking themselves

 "How much money should a wind down cost ?" is an interesting issue, and as zlb says any pre-ordained notional pot would unlikely to have been enough, even if not plundered.

Perhaps naively I've taken the view in the past that a wind down of a p2p loan book shouldn't cost that much (relatively speaking) .... there is all the general stuff that any company admin involves, there is communicating with borrowers who are able to refinance, and the mechanics of formal demand + appointing administrators/receivers for the remainder.   The bulk of the work in realising the loanbook should be that performed by administrators/receievrs of the borrower not that performed by administrators of the platform.  Clearly the costs of the former are deducted before the proceeds are remitted to the latter.

So far we've had COL's administration with the complications of lack of regulatory approval, lack of database, etc; Lendy's administration with multiple loans with legal claims post recovery, complications with a certain infamous borrower and their legal actions, poor AML records; and FS's administration with various unsecured loans and legal actions under way. And in all three cases a number of borrowers of dubious repute, who will be doing everything possible to impede progress.

Put simply, the loanbooks at the time the platforms fail are a complete mess, and will take a significant amount of managing (and hence cost) at the level above the individual borrower administrators/receivers. Spelt out this seems so obvious ... why would a platform with a "nice" loanbook fail ? .... but is a factor I've overlooked.

My theory (as per posts I've made in years past) that the costs of a wind down might be mostly covered by ongoing revenue from the loanbook was erroneous, as its now obvious that a a failed platform's loanbook is likely to include relatively few loans that provide ongoing revenue, and relatively many loans which need a significant effort to manage the exit.