The Press Association

Boost for Icelandic bank savers [allegedly]

2009-04-08 23

Three-quarters of savers who lost money through the collapse of the offshore arm of an Icelandic bank will get all of their cash back now a Scheme of Arrangement has been approved.

An Isle of Man court has approved a Scheme of Arrangement for Kaupthing Singer & Friedlander Isle of Man (KSFIOM), saving the bank from liquidation.

The scheme, which still has to be approved by savers and creditors, is thought to offer a better outcome to the 10,000 people who had money deposited with the bank than a liquidation would have.

It is estimated that 54% of depositors will get back all their money within three months under the scheme, while 76% will have received 100% within two years.

However, future payouts are less certain for the remaining 24% of savers who had balances of more than £50,000, with the amount they will get back dependent on the level of assets that are recovered.

Around £540 million of the £900 million of assets needed to repay savers are currently under the control of the liquidator provisional, including a loan book which needs to be run down.

The Isle of Man government has also agreed to contribute up to £180 million towards compensating depositors as part of the scheme. However, there is around £400 million belonging to the bank which was held by its parent company, Kaupthing Singer & Friedlander, and was frozen by the UK Government.

It is not yet known how much of this money, if any, will be returned to the provisional liquidator.

The scheme will be put to the vote of savers and creditors on May 19, with a further court hearing scheduled for May 28. There are two classes of savers and one class of creditor, and the scheme needs to be approved by 75% according to value and 50% according to number of all classes in order to go ahead.

If these groups fail to approve the scheme, it is likely KSFIOM will instead be put into liquidation. This would trigger payouts from the Isle of Man's depositor compensation scheme of up to the first £50,000 lost, plus any other money that was recovered during liquidation.

Copyright © 2009 The Press Association. All rights reserved.

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Savers get Lawyer over Iceland Bank

Posted 14/11/2008 - 18:15 by Tricky Dicky

2008-11-13 23

Savers get lawyer over Iceland bank
1 hour ago

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Help needed for offshore savers

Posted 25/10/2008 - 14:20 by Mandy_Italy

2008-10-23 23
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Savers in bid to get money back

Posted 21/10/2008 - 12:41 by C_south_africa

2008-10-21 (All day)
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