The two former directors of the failed peer-to-peer finance firm Lendy Ltd, accused of misappropriating funds worth £6.5m via off-shore entities, have settled by means of a confidential agreement, the mouseinthecourt can exclusively reveal.
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Reporting by Daniel Cloake.
The litigation, dubbed ‘The Marshall Island Mystery’ by this blog, first emerged in June 2020 when a published judgment stated that the two former directors of Lendy, and companies associated with them, had been hit with a world-wide freezing injunction over their assets.
High Court Judge Mr Justice Zacaroli found that 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.”
The defendants have explicitly denied any accusation of wrongdoing throughout.
Extensive coverage of the claim can be read in “Lendy v Brooke & Others – The Marshall Island Mystery“.
What can now be revealed is that the parties have signed a so-called ‘confidential settlement deed‘ dated 24th October 2022 bringing an end to the litigation.
A court order, made by Judge Mr Justice Miles, records that Mr Brooke, Mr Gordon and the various companies listed as defendants are now allowed to dispose of properties covered by the freezing injunction.
The order anticipates that the properties may be sold, with permission of the claimants, “to pay any sums that are permitted under the terms of the confidential Settlement Deed.“
It is not known how much money will ultimately be paid to Lendy under the terms of the agreement.
The order also records that a legal protection, known as a charge, can be granted over several properties owned by the defendants in favour of Lendy and the Joint Administrators. It is understood that the personal homes of the two former directors are included in the list attached to the order.
We have approached Mr Brooke and Mr Webb for comment. It is not currently known if Lendy or the Joint Administrators will be withdrawing their allegations of fraud.
In July 2019 the Financial Conduct Authority published a letter from then CEO Andrew Bailey. The letter explains that the FCA are “carrying out an Enforcement investigation into the circumstances that led to the administration of Lendy“. It is not known what, if anything, has emerged from this investigation. We have approached the FCA for comment.
Mouse in the Court 
So, what does this mean for investors?
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