In 2020 the former directors of the FCA Regulated peer-to-peer finance firm Lendy faced accusations of the misappropriated of £6.5 million via off-shore accounts in a civil claim at the High Court.
The claim settled by means of a confidential agreement in October 2022 and it was subsequently revealed that the total amount repayable to Lendy was some £3.4m.
This is the complete story.
Lendy Background
Lendy Ltd was a so-called peer-to-peer lending company which facilitated the crowd funding of loans by members of the public secured against property and other assets.
A fuller background to the company can be read from paragraph eleven onwards of this court document.
The company was placed into administration in May 2019 following action taken by the Financial Conduct Authority and Damian Webb, Phillip Rodney Sykes and Mark John Wilson of RSM Restructuring Advisory LLP were appointed as joint administrators.
In June 2020 this claim was filed at the High Court.
The Claims
The claims concern the alleged “misappropriation of funds in excess of £6.5 million by the first two defendants, by making payments for no proper purpose, purportedly justified by false invoices and at least two service level agreements created after the event.“
Unless otherwise indicated all parties explicitly deny any accusation of wrongdoing.
The Claimants
The Company:
(1) Lendy Ltd (A company registered in England) (in administration)
And its Joint Administrators:
(2) Mark John Wilson
(3) Phillip Rodney Sykes
(4) Damian Webb
The claimants have instructed Pinsent Masons LLP
The Defendants
Former Directors:
(1) Liam John Brooke (born June 1982) of Queens Crescent, Portsmouth
(2) Tim Alastair Gordon (born July 1979) of Ryefields Park, Chichester
And companies linked to the directors:
(3) LP Alhambra Limited (A company registered in England, director Liam Brooke)
(4) RFP Holdings Limited (A company registered in England, director Sara Bryce Gordon)
(5) Brankesmere Limited (A company registered in England)
Defendants (1) + (3) have instructed Isadore Goldman
Defendants (2) + (4) have instructed Dutton Gregory LLP
We are awaiting information for Defendant (5)
Key Court Files
The Claims
Amended Particulars of Claim
The Defence Statements
Liam Brooke & LP Alhambra Limited
Tim Gordan & RFP Holdings Limited
Brankesmere Limited
The Response
Liam Brooke & LP Alhambra Limited
Tim Gordan & RFP Holdings Limited
Brankesmere Limited
In the Media
“Marshall Island Mystery: Lendy Directors to pay £3.4m, report reveals” – Mouseinthecourt 22/12/2022
“Lendy directors settle in Marshall Island Mystery fraud case” – Mouseinthecourt 31/10/2022
“Lendy Administrators’ permit ex-director to sell property” – Mouseinthecourt 01/02/2022
“Lendy Administrators seek repayment of so-called ‘Brankesmere Dividend’” – Mouseinthecourt 12/11/2021
“Investors call for arrest of Lendy directors as new allegations come to light” – P2P Finance News 17/07/2020
“Lendy Investors Demand the Arrest of Former Directors” – Crowdfund Insider 15/07/2020
“Lendy directors ‘used sham invoices’” – The Times 02/07/2020
“Lendy investors demand inquiry into audit ‘failures’” – The Times 24/06/2020
“Former Lendy directors Liam Brooke and Tim Gordon have assets frozen” – Bridging And Commercial 22/06/2020
“Lendy directors Liam Brooke and Tim Gordon have assets frozen” – The Times 20/06/2020
Timeline
22nd December 2022
The seventh progress report of the Joint Administrators’ records a headline settlement figure of £3.4m.
You can download it here
31st October 2022
A Court Order records that the parties have “agreed terms of settlement in a confidential Settlement Deed dated 24 October 2022“
Read the mouseinthecourt write-up here
You can download the order here
19th September 2022
A consent order is granted by the Court. This concerned extending a deadline for setting a date for the Case Management Conference.
You can download it here
6th September 2022
A consent order is granted by the Court. This concerned extending a deadline for setting a date for the Case Management Conference.
You can download it here
13th August 2022
A consent order is granted by the Court. This concerned a deadline for setting a date for the Case Management Conference.
You can download it here
June 2022
A case management hearing is listed but adjourned to the first available date after September 1st.
3rd February 2022
A consent order is granted by the Court. This concerned dates for filing and service of documents.
You can download it here
1st February 2022
The High Court alters a worldwide freezing injunction to allow ex-Lendy director Tim Gordon to sell a property.
Read the mouseinthecourt write-up here
You can download the order here
28th January 2022
The claimants respond to the Amended Defence of the first and third defendants
You can download it here
The claimants respond to the Amended Defence of the second and forth defendants
You can download it here
The claimants respond to the Defence of the fifth defendant
You can download it here
25th January 2022
A consent order is granted by the Court. This concerned dates for filing and service of documents.
You can download it here
10th December 2021
Brankesmere Limited (fifth defendant) filed its Defence Statement at the High Court
You can download it here
8th December 2021
Mr Liam Brooke and LP Alhambra Limited (first and third defendants) filed an amended Defence Statement at the High Court
You can download it here
8th November 2021
An Amended Particulars of Claim is filed by the claimants.
You can download it here
2nd November 2021
The claimants’ successfully apply to have the company ‘Brankesmere Limited’ joined to the litigation.
It is understood that Brankesmere Limited own the freehold over Brankesmere House in Portsmouth.
Judge Deputy Master Arkush gives permission for Lendy and its Joint Administrators’ to amend their Claim Form and Particulars of Claim. The defendants also have permission to amend their written submissions.
You can download the order here.
And read the mouseinthecourt write-up: “Lendy Administrators seek repayment of so-called ‘Brankesmere Dividend’”
3rd September 2021
The documentary ‘Lendy Ltd v Brooke & Others – the Marshall Island Mystery‘ is published on YouTube.
2nd September 2021
The mouseinthecourt received an exclusive statement from Mr Liam Brooke.
These claims are based on an incomplete understanding of the way Lendy’s business worked and the underlying facts. They were brought prematurely and, as a result, have caused great distress to us and our families.
The allegation that the £6.8m paid to off-shore companies was for the personal benefit of the directors is vehemently denied. These were legitimate payments to Anthony Smith for the work that he arranged to carry out. The simple fact is that the majority of the company’s revenue and profitability was attributable to the work Anthony Smith arranged to carry out. Lendy was an internet based company that, in basic terms, matched borrowers and lenders. He provided the core of the company’s SEO and online marketing work, which directed lenders and borrowers to our websites. I have known and respected Mr Smith for a long time. He is very good at what he does and was paid well to ensure that Lendy had the extensive online presence that it did.
The contractual documents regarding Mr Smith and the work that he carried out have now been located and are with the administrators. Furthermore, a data analysis is being undertaken which will demonstrate the extent and breadth of the SEO and online marketing work undertaken by Mr Smith.
If the administrators insist on proceeding with their claims despite this new information, then we are ready and prepared to defend ourselves to trial to clear our names.
Statement of Mr Liam Brooke exclusively obtained by the mouseinthecourt
25th February 2021
The Claimants filed their Response to the Defence Statement of Mr Tim Gordon and RFP Holdings Limited (second and forth defendants) at the High Court.
You can download it here
The Claimants filed their Response to the Defence Statement of Mr Liam Brooke and LP Alhambra Limited (first and third defendants) at the High Court.
You can download it here
29th January 2021
A consent order is granted by the Court. This concerned dates for filing and service of documents.
You can download it here
30th November 2020
Mr Tim Gordon and RFP Holdings Limited (second and forth defendants) filed their Defence Statement at the High Court
You can download it here
25th November 2020
Mr Liam Brooke and LP Alhambra Limited (first and third defendants) filed their Defence Statement at the High Court
You can download it here
1st October 2020
The Claimants filed their Particulars of Claim at the High Court.
You can download it here
8th July 2020
A consent order is granted by the Court. This concerned dates for filing and service of documents.
You can download it here
12th June 2020
A consent order is granted by the Court. This concerned dates for filing and service of documents.
You can download it here
3rd June 2020
A Part 7 claim form is issued and filed. The text in red is added in October 2020.
2nd June 2020
A World-Wide freezing injunction granted against defendants 1, 3 and 4.
See the mouseinthecourt write-up here
Read the Judgment of Mr Justice Zacaroli here
The “evidence demonstrates a good arguable case as to the misappropriation of funds in excess of £6.5 million by the first two defendants, by making payments for no proper purpose, purportedly justified by false invoices and at least two service level agreements created after the event. There is also a good arguable case, it seems to me, that these payments were made to offshore companies with whom the directors were connected.”
1st June 2020
Proceedings are commenced at the High Court.
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Claim No: BL-2020-000856
BETWEEN:
(1) LENDY LTD (IN ADMINISTRATION)
-and-
(2) MARK JOHN WILSON
(3) PHILIP RODNEY SYKES
(4) DAMIAN WEBB
(IN THEIR CAPACITY AS JOINT ADMINISTRATORS OF LENDY LTD)
Claimants
-and-
(1) LIAM BROOKE
(2) TIM GORDON
(3) LP ALHAMBRA LIMITED
(4) RFP HOLDINGS LIMITED
(5) BRANKESMERE LIMITED
Defendants
Mouse in the Court 
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