Administration - State of Play & Significant Information (L)

TO ALL M2 LENDERS
27 July 2023
Dear Sir or Madam,

Lendy Ltd - In Administration (“the Company”) & Saving Stream Security Holding Limited – In Administration (“SSSHL”)

In the High Court of Justice, business and Property Courts in Birmingham, Insolvency and Companies CR-2019-BHM- 000443 & CR-2019-BHM-000444

Court Application for Directions

The Joint Administrators have previously set out the details of their application to Court for directions (“Application”) and the Judgment that was handed down by the Court on 12 August 2021. This Judgment dealt with the first part of the issues in the Application which is set out in the Joint Administrators’ progress reports to creditors. As previously advised, the Court held that M2 Loan realisations fall outside of the Lendy Administration estate and are held by Lendy solely for the benefit of the M2 Lenders. The second part of the issues in the Application primarily relates to the Cost Protocol which is discussed in further detail below.

Cost Protocol

As previously advised, in the period since the Judgment was handed down the Joint Administrators have been working with their legal advisors and Gunnercooke LLP, who represent the Lendy Action Group to agree an appropriate way to deal with the applicable costs and expenses which Lendy has incurred in collecting and realising the M2 loans. This was agreed as a Cost Protocol in the form of a Court order which was approved by the Court on 20 July 2023 (‘the Protocol’). The Joint Administrators will provide further detail on the Protocol in due course. For the purpose of this letter and the enclosed documents, the Joint Administrators have adopted the definitions in the Protocol.

M2 Committee

In accordance with the Protocol, the Joint Administrators are seeking nominations for membership of an M2 Committee which will be formed in accordance with the Protocol.

Such nominations are to be received by email to Lendy.Restructuring@rsmuk.com or by post to 25 Farringdon Street, London, EC4A 4AB no later than 5:00pm on 10 August 2023. Nominations will only be accepted from investors who have an ‘M2’ investment and who are not a member of the Company’s Creditors’ Committee. Please note that M2 Lenders will also have to sign a Non-Disclosure Agreement in the form attached.

Noting the number of investors this note is being circulated to the Joint Administrators request that, to manage costs, investors do not telephone the RSM team.

Please note that, in order for the M2 Committee to be formed, there must be at least three and no more than five M2 Lenders to be represented on the M2 Committee. In accordance with the Protocol, Lisa Taylor, first respondent at the directions hearing and representative of the Lendy Action Group will be a founding member of the M Committee. If three or four M2 Lenders nominate themselves to be members of the M2 Committee, the M2 Committee will be formed and the Administrators will contact the M2 Committee members accordingly.

If more than four eligible candidates apply to become M2 Committee members (Lisa Taylor already being a member), the Joint Administrators will ask the M2 Lenders to vote on which candidates are to be appointed. M2 Lenders will be admitted for voting for the balance of their outstanding M2 investment. A proof of debt form is enclosed, however if M2 Lenders are unsure of this balance, the Joint Administrators have this detail and will admit M2 Lenders for the amount from the Company records.

I look forward to hearing from you. In the meantime, if you have any queries please direct them to the email address provided below.

Yours faithfully
for and on behalf of
Lendy Ltd
Damian Webb
RSM UK Restructuring Advisory LLP
Joint Administrator

Lendy.Restructuring@rsmuk.com

Encls.