> the whole thing transfers to a trust, 'Portfolio Financial Servicing Company (“PFSC”)'[3] to continue collecting from borrowers and paying lenders. The "payi

> the whole thing transfers to a trust, 'Portfolio Financial Servicing Company (“PFSC”)'[3] to continue collecting from borrowers and paying lenders. The "paying lenders" part is partially correct. Only the Lenders that are part of LC Trust I, Lending Club Advisors (LCA), and one another entity (name escapes me at the moment) will get paid as these entities are Bankruptcy Remote Vehicle (BRV). As I mentioned in another comment, the Retail Lenders don't have any BRV protection so they will be considered unsecured creditor of Lending Club. As debt is senior to equity, debt holders will get paid before equity holders. The unsecured creditor is subordinate to any senior debt holder, the retail lenders will be last one to be paid before equity holders. Source: Read the SEC Filings - prospectus and 10-K. Also from your PFSC link: "If the underlying loans are determined to be part of Lending Club’s bankruptcy estate, PFSC may not be able to make payments on the Notes."