The private market assets platform Yieldstreet struck a deal to recoup some of its legal expenses for an ill-fated series of marine loans — but its customers are less fortunate.

Yieldstreet is getting $5 million in a settlement with the borrowers who defaulted on the marine loans, the startup told customers last week in letters obtained by CNBC.

But since the company’s recovery cost “well exceeds the entire settlement amount,” it’s unlikely investors will see any repayment, Yieldstreet said. The deals are being closed and financial statements showing losses will be filed by February, the company said.

“We recognize this outcome is disappointing,” Yieldstreet said in the investor letter. “Yieldstreet pursued this extensive recovery effort because we are committed to exhausting every reasonable avenue for investor recovery.”

Yieldstreet put its investors into deals totaling $89 million in loans that were supposed to be backed by 13 ships, according to a lawsuit filed by the startup against the borrower in that project. The loans float money to companies that take apart ships for scrap metal; the vessels themselves are the collateral on the deals.

Yieldstreet lost track of the ships and then pursued the borrower, which it accused of fraud. While it won monetary awards in a number of jurisdictions outside the U.S., the borrower avoided paying the startup by concealing their assets, Yieldstreet said in the August investor letter.

The episode garnered media coverage and in 2020 contributed to the collapse of a high-profile partnership with BlackRock, the world’s largest asset manager.

The news of this latest loss follows CNBC’s report last month that Yieldstreet customers in four real estate deals worth $78 million have been wiped out, with roughly $300 million of other deals on watchlist for possible losses.

This year, Yieldstreet changed its CEO and announced a new business model that leans more on distributing private market funds provided by established Wall Street firms including Goldman Sachs and the Carlyle Group.

In a statement provided to CNBC, Yieldstreet said the investor letters refer to marine loan deals from 2018 and 2019 in an asset class that the firm no longer offers.

“While substantially less than the amounts invested by the funds and ultimately the investors, this settlement allows us to bring closure to litigation that could otherwise continue indefinitely,” Yieldstreet said in the statement.

The firm “takes its fiduciary responsibilities seriously and, throughout the recovery effort, advanced its own funds in an effort to protect its investors and has absorbed significant losses alongside its investors,” the startup said.

Arman, an investor who plowed $180,000 into marine loans in 2019, called the result a bitter disappointment. After receiving $16,000 from Yieldstreet in a class action settlement tied to the soured marine deals, he estimates that he lost more than 90% of his original investment.

CNBC is withholding Arman’s last name from publication at his request.

“My mother passed away in 2018, and I didn’t know where to put the money,” Arman said. “I thought this was somewhere safe to put it, and it wasn’t.”

The Yieldstreet marine loan deal was supposed to mature in six months, a relatively short-term investment.

Instead, it stretched into a six-year saga for Arman, who works as a firefighter and paramedic near the West Coast.

“They are now washing their hands of the whole thing,” he said. “They are taking $5 million to cover their own expenses, with no regard for investors.”