AlixPartners achieve successful outcome in the Administration of Indigo Michael Ltd

Managed wind down and continuing lending services amid insolvency.

London (12 September 2024) – Indigo Michael Ltd (IML), the company behind the popular short-term lending products Tappily and SafetyNet Credit, entered Administration alongside its sister company, Account Technologies Software Ltd (ATSL), following a decade of service to over 800,000 consumers across the UK. IML, known for its app-based financial solutions, had maintained positive cash flows but faced insurmountable operational and regulatory challenges that led to Joe O’Connor, Clare Kennedy and Simon Appell of AlixPartners to be appointed Administrators over the Companies.

IML’s decline was predicated by a large increase in customer complaints, which resulted in the Financial Conduct Authority (FCA) imposing restrictions on its operations. These restrictions severely impacted the IML’s viability, leading to a situation from which it could not recover.

In an unprecedented move within the UK’s short-term credit sector, the Administrators continued to trade the Companies in Administration where IML specifically continued its lending operations despite entering insolvency. This marks the first instance of a company in this sector maintaining lending services while insolvent, a testament to the innovative and strategic approach employed by AlixPartners, who were appointed as restructuring advisors, contingency planners, and subsequently, Administrators of the Companies. AlixPartners successfully stabilised trading operations to ensure customers experienced no disruption in accessing a critical form of credit. This achievement underscores the importance of effective stakeholder management during both the lead-up to and the duration of the Administrations. Balancing the often-conflicting objectives of various parties involved, AlixPartners executed a managed wind down and collection of IML’s loan book, while uniquely allowing new lending to continue under Administration.

This approach prevented a sudden loss of credit facilities for customers, thereby mitigating potential financial distress. It also played a significant role in enhancing the outcomes for creditors, ensuring that the ongoing lending operations optimised returns. The strategy implemented by AlixPartners in this challenging and unprecedented situation has set a new benchmark for handling insolvency within the short-term credit industry. By continuing lending operations during Administration, IML has provided a crucial lifeline to many of its customers while also securing the best possible returns for its creditors.The AlixPartners team was led by the Administrators and included Catherine Wiliamson, Gautam Sachdev, Andrew Livingstone, Melissa Brooks, Leeleya Bachoco, Tanvir Miah, Sadie Falconer-Bowen, Livi Peacock, Catherine Choumali and Christohper Robb. AlixPartners worked closely with Walker Morris LLP (Gawain Moore, Rebekah Daily and Jeanette Burgess) as the Administrators’ legal advisor, Hilco Global (Kevin Smyth and Julian Hall), and Atalaya Capital (Dermot Murphy and Everett Indart) as the secured lender to IML.