Funding Circle says Azzuro Associates loan default case is resolved

(Alliance News) - Funding Circle Holdings PLC on Tuesday said the loan default case involving Azzuro Associates and the guarantors of two defaulted loans has been resolved.

The London-based lending platform focused on small and medium enterprises said the case has been resolved after a settlement initiated by the personal guarantors, resulting in a payment to Azzurro.

The case involved loans which came from the Funding Circle platform and were subsequently sold by investors to Azzurro.

In 2020, Funding Circle sold hundreds of small business owners' personal guarantees to Azzurro, a debt buyer that is ultimately owned by New York-based investment fund Elliott Management. Personal guarantees are a business owner's personal promise to repay outstanding company debt.

Claims that defects in Funding Circle's documentation left Azzurro unable to pursue some small business owners over personal guarantees were heard by the High Court.

The settlement was for more than the outstanding balance of the loans at default, Funding Circle noted.

Further financial details of the settlement were not disclosed.

The company said the settlement validates its position that the debt had been assigned and payment was due to Azzurro.

"As stated at the time of press reports in February, the validity of the loans and personal guarantees has never been in question, and we were confident that Azzurro would succeed in demonstrating its right to bring the claims," Funding Circle said.

Shares in Funding Circle were up 4.8% at 128.00 pence in London on Tuesday morning.

By Michael Hennessey, Alliance News reporter

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