Divorce court lender watches as $2m loan payment is delayed by another year
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Legal lender ASK Funding is waiting to find out if $2 million it lent to a party now in the Family Court will be paid back.
ASK (ASX:AKF) is a kind of litigation funder, offering loans to people who start legal proceedings over relationship breakdowns, estate claims and personal injury matters.
In its half-year report ASK said it had lent a “Single Matrimonial Loan” worth $2 million to a borrower in Western Australia in May 2015, to be paid back by 2016.
The borrower didn’t pay and ASK started proceedings against the hapless protagonist for $2.5 million.
Come February this year, the Family Court awarded ASK’s debtor $2.8 million.
But the decision was appealed, and it looks like the matter will drag out for another 12 months.
Family Court delays are a risk ASK recognises.
“A significant factor in the timing of the recovery of Matrimonial Funding loans is the inordinate delays being experienced by litigants in the Family Court of Australia which in many cases is beyond the control of the parties to the court proceedings in question and extends to years,” the company said in its half year report.
On the up side, should ASK ever receive its dues, “net assets are anticipated to increase by $800,000 representing an increase of 1.2 cents per share on the 31 December 2017”.
ASK made almost $1 million in revenue in the latter six months of calendar 2017.
Losses widened by 75 per cent to $95,000, as three matrimonial loans worth $2.4 million took up 81 per cent of its loan book.
ASK closed its books to new loans in 2012.