LONDON (ShareCast) - (Sharecast News) - The High Court will hear claims by Azzurro Associates after defects in Funding Circle's documentation and processes have left it unable to pursue small business owners over personal guarantees.
Azzurro, which is owned by hedge fund giant Elliott Management, has been pursuing two directors of a business borrower in a case which will test claims that payment under the personal guarantees, which involved directors putting their personal assets on the line, was not due to Azzurro despite its acquisition of loans from Funding Circle.

In an interim ruling, Judge Terrence Phillips said the two guarantors had a "real prospect of success" in establishing that money they had personally guaranteed was not payable to either Azzurro or Funding Circle due to alleged issues with documentation and processes.

He stated there was a "more than arguable case" that assignments of rights in the case were not, "in effect, legal assignments of the underlying debts". Phillips also added that Funding Circle's definition of "lender" may have the "effect of limiting the ambit of the guarantee" to a "very narrow class of creditors" that would not include Azzurro.

However, Funding Circle believes there to be no question over the general enforceability of personal guarantees on its platform and was said to be confident that even if any issues with its processes were to be established at the Azzurro trial, it would be able to resolve them.

As of 0945 GMT, Funding Circle shares had sunk 23.84% to 95.20p.







Reporting by Iain Gilbert at Sharecast.com

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