Fenchurch Legal administrator investigates loan book transfers after failed challenge

Fenchurch Legal’s administration has moved from appointment fight to asset investigation, after the High Court dismissed a director’s challenge to the appointment of Vincent Simmons of BV Corporate Recovery & Insolvency Services, leaving the administrator to untangle a disputed loan book with a stated gross value of about £16 million.

In proposals dated 13 May, the administrator said he is investigating the litigation funder’s loan book, the validity and priority of security and assignment arrangements, share transfers involving subsidiaries, and substantial payments made shortly before the administration began.

Fenchurch, incorporated in April 2020, traded as a litigation funder providing small loans to law firms handling high-volume claims, including housing disrepair, tenancy deposit, personal injury and PCP car finance mis-selling claims. It had 8 employees and was funded by various investors, including loan noteholders in the US and Israel.

The company entered administration on 1 April after Lowry Trading Ltd, a secured lender, applied to court. According to the administrator, the appointment followed Fenchurch’s failure to pay a demanded sum or make any payment after a credit facility fell due on 31 March. Fenchurch disputed both the amount allegedly outstanding and whether repayment was due, and had already issued proceedings against Lowry in late 2025.

Director Louisa Klouda challenged the validity of the appointment and sought to set it aside on 10 April. The High Court dismissed that challenge on 7 May, allowing Simmons to continue in office. During the challenge period, the company continued to trade under the administrator’s control, funded by loan book collections, but it stopped making new loans from 1 April and effectively ceased trading on 8 May, when most employees were dismissed.

The administrator said the loan book has a stated gross value of approximately £16 million, but its realisable value is highly uncertain because parts of it appear to be subject to competing security interests, assignments and pledges. A specialist debt collector quoted more than £40,000 plus VAT merely to assess the book, while a forensic review found no obvious surplus without significant funding to test the validity of each competing claim. Simmons said any collection effort could take three to four years.

A central focus of the administrator’s investigation is the period immediately before the appointment. Simmons said he became aware that shares in various subsidiary companies had been transferred into Klouda’s sole name on 31 March, the day before his appointment. He is also investigating assignments of parts of the loan book to third-party lenders immediately before the appointment and, in one case, after the appointment.

The proposals identify further investigative work around the sale of shares in seven subsidiaries, all of which were said to have little or no apparent value, and around substantial payments made by the company in the days before administration. The administrator has requested explanations for these transactions, and said he will provide further information in the next progress report. Bermans have been instructed to advise on the loan book, assignments, loan agreements, validity of the appointment, director challenge, and related matters.

The secured creditor picture is also contested. The proposals list registered charges in favour of As Mintos Marketplace, Huddle SPV 17 Ltd and Legalese Ltd, with Huddle’s debenture assigned to Lowry in 2024. The company’s director estimated secured debt at £232,806 to As Mintos Marketplace, £1.06 million to Lowry and £7.04 million to Legalese, while Lowry contends that it is owed more than £4 million.

Read the administrators’ proposals here.