History: lest we forget it.

Posted 10/02/2009 - 03:32 by follow_the_tao

To give some context, which I feel we need to remember, here is a November article from Manx Herald.
It is self explanatory.

Given the behaviour of the IoMG since this date, drifting, arriving at the deficient SoA we saw at the last court hearing, with nay a word or a public statement of their decisions to preclude the alternatives they once considered The volume of the chorus of apologists at this moment is nearly overwhelming. If this was a maritime situation we would simply be looking at the captain who placed the ship so near the reefs, in a storm they were watching arriving, that it went aground.

It would be obvious that it was negligence or a failure of judgement so serious that the competence of the operatives will be forever remembered as criminally/civilly deficient

That was more or less the comment of the TSC.

We now find ourselves in a PR/legal battle.
The only chance, and at the moment it doesn't look that good, is to contribute to the legal effort.
In my opinion this applies to all except the small deposit holders who the IoMG have bought off with their last minute/retrospective change to the DCS.

THe IoMG is playing poker. I didn't open an account with Kaupthing in the IoM to end up playing poker.

We need a public enquiry. Why is this bank the worst failure in Europe? Well done IoMG!.

Every depositor that passes through this site needs to be thinking about how we can raise our profile and confront the IoMG and HMG, and the financial professionals, with this spectacular failure in which we look to lose, whilst "they" have booked their profits already.

For the bondholders and the the depositors with a liitle more that the DCS 50K the game the IoMG is playing ought to anger them. For the smaller depositors the comments of the TSC about "How long will it take you to pay out?" ought to be uppermost. The comment of the TSC that they'd already made a fortune ought of the running their financial industry and in the moment when they screwed up (my opinion) the have deep pockets an short arms.

Here is the article. For those who have been tracking the situation developing, you might try to remember what (if any) comment you have seen about any the directions mentioned here by the IoMG key players.

IoMG I love you. kiss

Manx Herald Isle of Man: KSF (IOM) continues to be the subject of a slow death

KSF (IOM) continues to be the subject of a slow death

Herald Editor on 27 November, 2008 02:27:00

Deputy Deemster Andrew Corlett acceded today (Thursday 27th Nov) to the wish of
the Treasury to delay the winding-up of Kaupthing Singer Friedlander Bank (IOM)
for a further 60 days.
He agreed to allow more time for either the ‘high level’ meetings, between
officials from the IOM, the UK and Iceland to succeed, or a restructuring or
sale of all, or part, of the business to have a chance of success.
Making the application for the 60 day adjournment was the Attorney General,
John Corlett and Alan Gough, and this was supported by advocates representing
the largest number, by value, of creditors of the insolvent bank.
The Attorney General told the court that although the ‘high level’ meetings
had not produced any positive results so far the government has not given up on
them. He added that the Financial Supervision Commission, who had previously
supported the action to wind-up the bank, is now prepared to allow time to
explore possible alternatives to liquidation.
He said that the Island authorities believe that the £550 million of KSF (IOM)
funds transferred to the UK was in trust and therefore ring-fenced, but that
this is disputed by the authorities winding-up the UK division of KSF.
He also explained that the working party, established by the Chief Minister,
continues to search for a resolution to the problems faced by the bank. To this
end, the Treasury had appointed specialist corporate restructuring consultants,
Alix Partners.
Mr Gough took over at this point and summarized, for the benefit of the court,
the contents of an affidavit submitted by David Lovett (Alix Partners) in
support of the adjournment.
He said that a number of options are being considered, some of which appear to
offer a better prospect to creditors, of recovering their money, than a
traditional winding-up.
A sale of the business or a recapitalization, including Treasury support, are
two options under consideration, as is a restructuring involving other third
parties; with a traditional liquidation being the last option. He acknowledged
that this last option may be favoured by small investors but doubted it will
have widespread support.
He also admitted that preventing damage to the reputation of the IOM is a
consideration behind the decision to try to avoid liquidation. In so saying, he
said he was confident that creditors will be better off, and get a quicker
payout, if one of the alternatives succeeds.
He suggested that under section 132 of the Companies Act creditors will get an
opportunity to vote on any proposals brought forward by the Treasury, which will
enable them to participate in any decision.
However, he accepted the two month adjournment will delay payouts, and so the
Treasury is proposing to go to Tynwald to obtain permission to make a special
payout; not that he could anticipate how Tynwald will react to the proposal.
Whilst he could not make any promises that the delay would result in a change
to creditors’ prospects he said by winding-up today they would never know if a
better result could have been achieved.
It then came as no surprise when he said he would be unable to give too many
details of the work to be undertaken by Alix Partners for ‘confidentiality’
and other reasons.
He reminded the court that the government is a creditor to the tune of £10.7
million and along side the government are creditors owed, collectively, £173
million who support the adjournment; but that the creditors opposing the
Treasury’s petition are owed less than £1 million.
Deputy Deemster Corlett was not sure that the last figure was correct but did
not labour the point.
Mr Gough continued that the court had a discretionary power in respect of the
adjournment but His Honour was bound to consider if there was a benefit in
ordering the winding-up, for which he said there is a low threshold, but in this
case it was not a creditor seeking the winding up but the bank.
Accepting that there had to be a good reason not to order the winding-up he
said a balancing act had to take place and there was less objection to granting
the adjournment than dismissing the petition. He also quoted the Demaglass
Holdings case as the legal guidance for this situation; and that he believed the
court had the flexibility to allow some restructuring or other action time to
sort out the problem.
In closing he said, if the 60 day adjournment was granted, he would be happy to
provide a report to the court on progress 14 days before the next court date.
In reply to a question from His Honour, Mr Gough said he saw no sense in
setting a shorter period and repeatedly coming back to court when more
productive work could be done.
Mr Cain, representing the provision liquidator, Michael Simpson, said his
client retained his neutral stance. He gave an overview on some of the work
being undertaken by the liquidator, and some of it involved very complex legal
arguments. Although some assets had been recovered and others identified, which
totalled over £100million, some of the businesses holding the assets were
claiming set-off against debts from other parts of KSF. So at this stage he did
not have an accurate indication of the amount recoverable for creditors.
He said that 66 expressions of interest had been lodged in respect of either
purchasing the whole of the business or the loan book. 15 had followed this up
with further inquiries, some of whom, he said, are now conducting due diligence
Mr Cain informed the court that Mr Simpson had held talks in Iceland with the
parent bank, but he had come back with little hope that the guarantee would be
honoured; albeit he had put the bank on notice.
Apparently 38 people remain employed by KSF (IOM) and Mr Simpson is very
pleased with the professional way they have conducted themselves, even though
they face an uncertain future.
Mr Cain said Mr Simpson wants to get the best deal he can for creditors and
that includes making an early payout.
Mr Wild, appearing for the FSC, said his client thought the Treasury are trying
to improve the position of the creditors and would therefore support the
petition. He also confirmed, at the request of the Deputy Deemster, the FSC
would not be seeking to recover their costs from the creditors’ pot; and would
only be doing what they were statutorily required to do in this matter.
Mr Clucas, appearing for KSF (IOM), said, on the one hand, the board remained
of the opinion they could not meet their obligations, so the bank should be
wound-up; but they noted the information provided by the provisional liquidator
and the possibility of an improvement in the position.
Perhaps any balancing had to give greater weight to the creditors but he
remained of the view any proposals from Treasury had to be firmed up sooner
rather than later.
His Honour then called on Mr Morris, who he suggested probably represented the
biggest, in value, creditor group - including several insurance companies - and
perhaps, unsurprisingly Mr Morris said they supported the adjournment.
Countering the view of the majority heard so far, was Mr Wright, who said he
represented a number of individuals, and the action group formed by
approximately 2000 ‘small’ creditors, who collectively are owed about £40
He argued that more information should be provided first before a decision was
taken on the adjournment. He sought a delay of 14 days to allow time for a
number of questions, posed by the creditors, but as of yet unanswered, to be
dealt with so that he could properly advise his clients so they could make
informed decisions.
He claimed, for example, that people were being “very precious” about the
terms of the parent company guarantee that today the court had been informed was
He said he didn’t think the delay would prevent Alix Partners from getting on
with their work; and stated that he did not think providing answers to the
questions, which were neither seeking commercially confidential nor significant
information, could assist all parties.
An individual creditor, Mr Hughes then addressed the court very passionately
and eloquently.
He began by saying he believed the provisional liquidator, at an earlier
sitting, had mislead the court regarding taxation issues and the appointment of
a joint liquidator.
He then stated that he had been “shocked” when he discovered the terms of
the parent company guarantee and that he feared it could not be called upon. He
pointed out that it allowed Kaupthing Bank to dispose of it shareholding, and by
doing so the guarantee then fell. Therefore, the winding-up order should be
issued immediately to prevent KB (HF) manoeuvring itself out of the guarantee.
He said that the FSC knew the bank was insolvent but was supporting the
adjournment, despite no evidence to support their position, so their opinion
should be disregarded.
He also believed that as Alix Partners could offer no assurance of improving
the situation then a decision had to be made now to wind-up the bank. He added
this would not stop Tynwald approving a special resolution to give support to
His Honour inquired of the Attorney General if he had a view on the 14 day
The A. G. was not in favour but offered a further insight into the thinking
behind the ‘special scheme’ to allow a “payment on account.” He said
this may be from money already recovered by the liquidator provisional or by
indemnity of the Treasury. He suggested if the proposal is to be brought to the
December Tynwald it would be under the provisions of the Finance Act; and that
the special scheme could perhaps either use half of the £150 million already
voted through by Tynwald or even ‘new’ money.
Whatever, they would need to move pretty quickly and he hoped it might allay
some of Mr Wright’s concerns; not that he wanted to get “bogged down” in
answering Mr Wright’s questions.
Mr Corlett then offered to make sure all the parties are kept advised of any
Mr Gough then chucked in his two penny worth on the delay. He said it would be
a waste of time and that there are far more important things to progress. He
pointed out that it is planned to publish some Q&A’s on the website soon; and
hoped that would be satisfactory.
Making his decision His Honour said, taking into account the Demaglass case, he
would accept the arguments put forward by the Treasury, and others, for the 60
day adjournment.
He added it was open to Mr Wright, if necessary, to come to court to seek
directions on how the liquidator provisional should provide answers to his
He then turned to some of the issues raised by Mr Hughes and he was concerned
that the court had perhaps not been properly informed when making its decision
on the appointment of the joint liquidator.
Mr Wright said that all his clients want is an end to the “obsessive
secrecy” and greater openness and transparency; which he said is necessary if
creditors are to retain confidence in the process.
Mr Cain apologised for any previous oversight and assured the court that no
mischief was intended. He was of the opinion that Mr Simpson is trying to be as
open and transparent as the situation allows him to be.
Noting what had been said by the parties, His Honour cautioned everybody that
“considerable care” should be taken when presenting affidavits; but took the
matter no further. Finally, it was agreed that the request by KB (HF) to
‘drop-out’ of the case should also be heard at the reconvened hearing on the
29th January 2009

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