Hundreds of millions of pounds raised from private investors purportedy to fund motor finance redress claims has apparently vanished, administrators of litigation funder Woodville Consultants reveal today. In a formal statement of proposals, administrators Robert Goodhew and Andrew Stoneman of Kroll Advisory say that the company's directors have yet to answer 'basic questions regarding the use of investor funds'. 

Investigations are ongoing into tens of millions of pounds apparently advanced to companies with the same directors and shareholders as Woodville. 

Woodville was placed into administration on 16 July. The administrators' statement concludes that rescue as a going concern is not practicable. It also reveals 'significant concerns regarding the nature, recoverability and value of the company's assets when compared with its liabilities'.

According to the report, the Pontypridd company, incorporated in 2012, concentrated its lending to 10 law firms and 'associated entities', primarily based in Wales and northwest England. Funding provided to certain firms may have been used for wider working capital requirements as well as for funding cases, the report states. 'Surprisingly', loans to only one firm appear to be secured. Some law firms have also 'shown reluctance to cooperate', with the administrators. Two firms on the loan book, ASL Boston and McDermott Smith, owing a combined £51.7m, are subject to insolvency proceedings.

Overall, the administrators 'have significant concerns as to the realisable value of the loan book and it appears clear that there will be a significant shortfall from law firm realisations as compared to the amounts due to investors'.

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The statement reports that information about law firm borrowers 'was not readily available to the extent required or expected' and the administrators' work 'has been hampered by a lack of cooperation from both the directors and the related parties'. It continues: 'The administrators are taking advice on enforcement action should the directors (and others) continue to fail to cooperate.'

'Connected parties' owe Woodville a total of £37 million, the statement finds. 'These balances principally comprise loans and advances to entities associated with the company's directors, management and related businesses.' One such was the £17.6m paid to a company named Integrity Protect No 1 Limited, which shares Woodville's shareholders and directors.  'The purpose, commercial rationale and recoverability of these transactions remain under review.'

Woodville also advanced £8 million to a wholly owned subsidiary, Horizon, which went into receivership two weeks before Woodville's collapse. The administors are investigating the relationship between Horizon and Woodville. 

Another concern is over 'performance bonds' issued to investors purportedly to protect their capital. 'It is possible that these products have been mis-sold or misrepresented,' the administrators state.  

Unsecured creditor claims total £298,681,307, the statement reveals. At the time of administration, Woodville had £254,734 cash in the bank. The administrators raised £650 from the sale of office furniture and equipment. The administrators estimate that their fee will come to £3m.