Bondholders in Cattles, the embattled sub-prime lender, could end up losing more than £650m that they are owed by the business.
The West Yorkshire-based company has struggled following allegations of financial irregularities that have resulted in the suspensions of several executives, including finance director James Corr and chief operating officer Ian Cummine.
Bondholders are owed £750m in total, which is due to be repaid in 2014 and 2017. A source close to a leading bondholder said they would be lucky to get '12p in the pound' once the business has been restructured. Cattles' bonds are believed to be currently worth about 6p.