Lendy Administrators seek repayment of so-called ‘Brankesmere Dividend’

The Joint Administrators of Lendy seek repayment of so-called ‘Brankesmere Dividend’ said to be worth over £861k as it is revealed £1.5m of FCA Remediation payments remain outstanding to members of the public involved with failed P2P firm Lendy.

The Administrators of Lendy were recently given permission to join Brankesmere Limited as a defendant in the ‘Lendy v Brooke and others’ litigation which has been ongoing since June 2020.

According to documents recently filed at the High Court it is alleged that the former director of Lendy Ltd, Mr Liam Brooke, caused dividends totalling some £861k to be unlawfully made.

The so-called Brankesmere Dividend was said to have been paid to Lendy Group on 6^th September 2018, and “loaned” from Lendy Group to Enebral and by Enebral to Brankesmere Limited.  According to the filings Mr Brooke was, at all material times, a director of each of these companies.

It is said Brankesmere used the funds to purchase the property at Brankesmere House, Queens Crescent, Southsea, England, PO5 3HT from Lendy on 12 September 2018.

The administrators claim that at the date of the Brankesmere Dividend the Lendy management accounts incorrectly showed a retained profit of some £3,157,872.  The administrators claim this total was wrong as it failed to take into account:

• Corporation tax of £1,367,555 arising out of offshore payments said to have been wrongly claimed as allowable expenses
• £829,668 said to have been understated out of a £1,576,507 liability towards remediation payments to investors following intervention by the FCA
• £226,000 described as the 23 July 2018 Dividend
• £860,000 described as the Teal Dividend on 25 July 2018

The administrators claim that “The Management Accounts, if properly prepared, would have shown that there were zero profits available to be distributed” and that “by causing the Brankesmere Dividend to be paid, Mr Brooke acted: in breach of his fiduciary duty to act in the best interests of the Company, and/or failed to exercise his powers only for proper purposes, and/or failed to avoid a situation of conflict and/or failed to exercise reasonable skill, care and diligence.”

It is understood that the defendants have been given an opportunity to file a defence to these new claims by 4:00 pm on 10 December 2021.

In an exclusive statement given to mouseinthecourt made prior to these new revelations, Mr Liam Brooke said he “vehemently denied” the claims which “were brought prematurely and, as a result, have caused great distress to us and our families”.  Mr Brooke added that if “the administrators insist on proceeding with their claims … then we are ready and prepared to defend ourselves to trial to clear our names”.