TrustBuddy investors to lose a chunk of cash on appointment of debt collectors
22 January 2016 | 5997 views | 1
Bankrupt P2P lender TrustBuddy says investors will lose a quarter of their cash after handing over £24 million of outstanding loans to a debt collection agency.
The Swedish lender, which was midway through a rights issue on the Nasdaq OMX exchange and had recently entered the UK market, filed for bankruptcy last year after it emerged that the company had been using lenders' capital to pay off soured debts. Subsequent investigations revealed a £3.5 million black hole in the company's finances.
Stockholm-based law firm Lindahl was appointed to oversee the winding up and recovery of customer capital after the company filed for bankruptcy in October.
In a statement, the firm says the appointed debt collection agency will pocket 25% of the value of all outstanding loans recovered in return for taking on the loan book.