Administrator probing transfers made by funder on brink of collapse

A ‘large proportion’ of the £16m loan book of a litigation funder was moved to subsidiaries as the company hovered on the brink of administration, it has emerged.

Insolvency specialists handing the affairs of Fenchurch Legal this week published a notice of administrator’s proposals, following their appointment on 1 April.

Administrator Vincent A Simmons revealed that investigations have already been carried out in relation to share transfers in former subsidiary companies. This was after an assessment of the company’s loan book which showed that various ‘substantial’ payments were made by Fenchurch Legal immediately before his appointment.

Simmons said: ‘A large proportion of the loan book appeared to have been transferred to subsidiary companies immediately prior to my appointment and those shares in seven subsidiaries were also subject to transfers the day before I was appointed, which caused significant diminution in the value available to the company.’

There is no suggestion in the administrator’s report that there has been any wrongdoing.

Fenchurch Legal, incorporated in April 2020, provided small loans to law firms running high-volume cases in areas such as housing disrepair, tenancy deposits, personal injury and PCP car finance mis-selling. The company operated from leasehold premises in central London. It had eight employees and was funded by various investors including loan note holders from the US and Israel.

Trading was described as ‘reasonably strong’ in the first year, based on filed accounts, but since then the company has reported net liabilities each year.

In late 2025, Fenchurch issued legal proceedings against a secured lender, Lowry Trading, in connection with a debt dispute. Nothwithstanding those proceedings, a credit facility was due to expire on 31 March and a demand was made for repayment of sums due to Lowry. Failure to pay resulted in an application to the High Court for the appointment of Simmons of BV Corporate Recovery & Insolvency Services on 1 April.

Fenchurch challenged that appointment but the court dismissed its application on 7 May. Staff had been retained pending the outcome of this challenge but were mostly let go the day after court dismissal. Simmons said he became aware during this period of uncertainty that shares had been transferred which ‘may have constituted significant assets of Fenchurch Legal Limited’.

Company director Louisa Klouda was served with notice to provide a statement of affairs in April, but this has yet to be received. The administrator estimated that the loan book had a gross value of £16m, funding 9,500 claims at the time of his appointment.

Companies House records show that Fenchurch Legal ceased to have significant control of seven different companies (each featuring the Fenchurch name) on 31 March, with Klouda becoming a person with significant control on the same day.

Simmons added in his report: ‘There has already been significant investigations carried out which I will continue with in relation to share transfers in former subsidiary companies and assignments of portions of the loan book together with various substantial payments made by the company in the days immediately prior to my appointment for which I have sought explanation.’

He expects to give an update on the progress of these investigations in his next report.

Given ongoing uncertainty, potential distributions to secured and unsecured creditors remain uncertain.

Secured creditors include Legaleze Ltd (owed £7m), Lowry Trading (£1.1m) and Mintos Marketplace (owed £933,000). Lowry Trading contends that the sum owed is actually in excess of £4m. Unsecured creditors are owed around £910,000.