A candid email sent between the two co-founders of the failed peer-to-peer lending firm Lendy, which anticipated impending insolvency, was sent over 14 months before the firm collapsed, the mouseinthecourt can exclusively report.
Lendy 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.
Lendy was fully authorised by the FCA and had some 10,500 active investors on the platform.
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.
Reporting by freelance journalist and blogger Daniel Cloake.
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Liam Brooke, 43, co-founded Lendy Ltd with Tim Gordon, 46, in 2012.
As part of on-going legal proceedings against the auditors of the firm, as extensively covered on this site, an e-mail sent between the two entrepreneurs has emerged in evidence.
In the email dated 6th March 2018 Mr Brooke summarised Lendy’s financial position to Mr Gordon.
[Lendy] needs a lot of cash going forward to fix some of the losses that are on the horizon. I totalled it up at c£10m which is very likely going to happen and soon. Its enough to break the company unless fundamental reform happens immediately.
The business as it stands does not work, we are unable to fund the developments that we are legally liable for.
There are already legal issues starting to arise on this basis. Costs are going to rise imminently from a litigation point of view. How do we fund the existing developments?
We could use company money to fund the tranches to kick the can a little further down the road and hope something comes along.
In summary, Tim – the company is bust, the model doesn’t work, there is going to be a massive explosive fall out shortly and we are both on the hook to sort it out.
The FCA won’t sign us off and the banks won’t lend us any money.
Mr Gordon reportedly replied later the same day:
I’d potentially be in favour of coming clean with the FCA about the proximity to insolvency that we find ourselves, to reiterate to them that remediation (however minor) would simply have the effect of accelerating the collapse of the platform.
Filings at Companies House indicate Mr Gordon resigned four months after sending this response.
One notable business action carried out following this email was the second year of Cowes Week sponsorship, a popular annual sailing regatta held on the Isle of Wight.
Lendy used Cowes Week to launch their so-called Lendy Wealth products – which encouraged investors to lock their money in for up to 365 days promising a return of “up to 10%”. Liam Brooke appeared in a promotional video for the event, replete with typo ridden subtitles, explaining why investors came to Lendy:
Lendy Promo Video “Lendy Cowes Week 2018 – coming soon…“
Despite Brooke’s private prognosis that there would be a “massive explosive fall out shortly” the company continued to trade. Just eight days after the email was sent a loan of some £4m, collectively financed by some 3,100 members of the public, was facilitated by Lendy.
The loan, known to investors as PBL199 – Suffolk House, Trade Street, Cardiff in due course defaulted. It took some 5-years for investors to get just 62.5% of their capital back.
In total some £15.6m of losses were said to have been incurred for investments made after the 1st March 2018, the week of the email, court filings seen by the mouseinthecourt have claimed.
Despite Tim Gordon’s response that even a minor remediation order from the FCA could cause the company’s collapse both Brooke and Gordon paid themselves £226k in dividends in July 2018.
Two dividend payments of circa £850k were then said to have been made to Lendy Group Limited, a non-trading shell company, in July and September 2018. As of the date of the first payment Brooke and Gordon were both directors and shareholders of Lendy Group Limited.
Litigation filed at the High Court, in which it was alleged that both Brooke and Gordon misappropriated funds worth £6.5 million via off-shore accounts in the Marshall Islands, didn’t proceed to trial after they settled with the joint administrators of Lendy.
The confidential agreement was signed in October 2022 but it is understood repayments of some £3.4m were anticipated to be received by the company. As of May 2025 some £1.37m remains outstanding.
During the course of the litigation, and at all times, the directors have strenuously denied any accusations of wrongdoing. None of the assertions made have been tested in court.
The emergence of this email offers new insight into the challenges Lendy faced in its final year and the internal concerns held by its founders well before the company’s collapse.
While investors continued to place funds into the platform and new products were launched, behind the scenes, serious doubts had already been expressed about the business’s financial sustainability.
A few weeks ago we reported that 182 Lendy investors have died waiting for justice as administration enters 73rd month. It is not known when or indeed if the full picture will ever emerge.
We’ll be keeping a keen eye open for any further developments going forward.
Mouse in the Court 