Tiuta Plc enters administration

Bridging lender Tiuta Plc has today been placed into administration.

The FSA has confirmed it approved the decision on 11 September but the decision still needs to be approved by the courts. A notice of intention has been filed to make David Rubin & Partners the firm’s administrator, although this has not been finalised.

It says: “Following the administration of Tiuta International as the principal lending arm, a decision has been taken with reflection and approval of the FSA to place Tiuta plc into administration. The process has yet to be completed and this step has been taken to preserve the integrity of the underlying business, the reputation of the Tiuta brand and also the lending platform.”

Earlier this morning, Mortgage Strategy revealed the directors of Connaught Asset Management had placed the company into administration. Two Tiuta subsidiaries, Tiuta International and Tiuta Development Finance, used The Connaught Series 1 and Series 2 Ucis funds to fund their lending.

Peter Hollis of KPF Advisory was appointed the administrator on 18 September, the same day CAM directors filed the notice to appoint administrators.

Last week, Money Marketing revealed 92 per cent of investors voted in favour of placing the £118m Income Series 1 fund, which provided a £105m funding line to Tiuta International, into liquidation.

Last month, Money Marketing revealed Tiuta Plc made a pre-tax loss of £37.8m in the 18 months to 30 September 2011.

The Series 1 fund was suspended in March and interest payments were not made. A review was commissioned to ascertain its true value.

Last month, Mortgage Strategy revealed investors faced losses of up to 50 per cent. An independent review by Duff and Phelps suggested recoveries would be between £46.5 and £53.2m of the £105.5m used to fund Tiuta.

A decision to wind down the Series 1 and £18m Series 2 fund, which was used to fund another Tiuta subsidiary called Tiuta Development Finance, was made in June. A Series 3 fund, which was not linked to Tiuta loans and raised around £22m, was wound down in July due to a spike in redemptions.

CAM bought Tiuta International and Tiuta Development Finance, the Tiuta Plc subsidiaries that used the Series 1 and Series 2 funds respectively , for a £1 in June. In July, Mortgage Strategy revealed Tiuta International had been placed into administration by CAM.