Affadavits now on the public site

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
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Posted: Sat, 14/02/2009 - 00:48

The affadavits we have been waiting for are now been posted on the public site. It is late and there is a lot of detail. However i note that the DCS is still a loan. Again the regulations stipulate that once everyone has received £50K and those over £50K have received 60% the scheme will then revert to paying back the IoM. Not until the DCS has been repaid will those still awaiting 40% get any further recompense.
Whereas all other governments pay in full this government wants its money back whilst depositors still await for their money. Why could they not just say we will collect money once everyone has their full 100%.
This is not a compensation scheme but a well crafted loan.
John

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SOA OR DCS - Schedule pf payments

  • Anonymous
  • Offline
  • Sat, 14/02/2009 - 18:24

If we as depositors are required to vote for the SOA then we need to be informed by the IoM Treasury how payments to depositors will be made in the case of the DCS as it would probably take up to 10 years for the participating banks to raise the funds required. If the Treasury proposes to advance funds to accelerate payments to depositors in an SoA scenario (50k GBP paid within 2 years) I do not see why they cannot do the same in the case of liquidation.


Comparison needed

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 14/02/2009 - 19:35

Íf they wanted to, then IOMG could take out a loan and cover us all 100% - but they won't; nor will they offer up any more money if liquidation goes ahead and the DCS is triggered - simply because they are not legally obliged to. After all it would be us, the depositors who voted for liquidation not them. In neither scheme is the IOMG likely going to lose big money in the long term.

Irrespective, as LondonTeam have requested, a proper comparison is what is needed for a range of depositors liabilities. Unfortunately without a better understanding of the KSFUK situtation - when and how much will be returned, then when the 50k minimum under liquidation/DCS will be payed (for those of us in the > 50k groups at least) is, in my opinion anybodys guess. So at the moment, with deference to bond holders: 50k/(20k) minimum guaranteed over 2 years or 50k minimum/(SFA) over ???. Not withstanding the possibility that enough will be recovered in two years to pay everyone up to 50k where applicable.

That then leaves us with what rights we give up going down the SOA route versus the DCS'and how that might affect us getting 100% back (in a reasonable time frame). I'm no legal eagle so ultimately we need a simplified description from a qualified lawyer ("John Wright where are you) of what we are giving up in each case in order to make the best informed decision for our own particular circumstances. Not clear to me that we don''t give up certain rights under the DCS as well as the SOA -but best left to the experts.

Note: I am not endorsing either the SOA or the DCS - simply put I don't believe I have enough factual information to make än assesment.


Also what we do with these "rights";...

  • Anonymous
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  • Sat, 14/02/2009 - 20:48

...likely time-frame and costs of pursuing these claims; chances of success


London Team Blog

  • Anonymous
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  • Sat, 14/02/2009 - 12:34

This is a copy of our blog post.. I was going to create another topic.. but rather than proliferate them, it seems best to add it to this one:

Well, the affidavits finally arrived.. 24 hours late and at a time when our lawyers won't be able to review them without weekend work! Should we be surprised?

On first reading, we are very disappointed. Obviously, we need to hear what our lawyers have to say. They may see some magical ray of light where we, as lay people, can’t.

Seems to us that IoMG and Alix Partners have spent the time converting the examples we had last time into words.. but the result is the same except:
They have hired Gabriel Moss, a respected QC, to consider similar schemes in financial institutions in the UK and advise how the scheme might retain our, and a liquidator’s, legal rights. He recommends retaining the provisional liquidator and giving him/them extensive extra powers.
The scheme IoMG are proposing retains the LP, but we see no extra powers.. yet.. and we already know how powerless Mike Simpson is at present from his replies to questions on legal avenues!

One positive thing. The IoM Treasury have agreed not to recover the 10 million quid they have invested until we have 100% back. Seems Allan Bell, at least, may have got the message.

They propose to convert currencies at October 8th which is grossly unfair to currency account holders.
There is absolutely nothing for bond holders
They still plan to recover their money, used to accelerate payments and provide a DCS equivalent, when depositors have recovered 60p in the pound.
They have not answered the DAG lawyer's questions.
We still don't have an SoA we could vote on.


is not only unfair, it must be illegal

  • klauseriksen
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 15:33

Using Oct 8th as the date for exchange rate calculations is not only unfair, it must be illegal. Foreign currency holders with less than £50K equivalent will actually receive LESS from the SOA than they would from the DSC. Thus it goes against the main principle of the SOA that ALL should get the SAME or MORE from the SOA than the DSC. I myself am a foreign currency depositor with >50K in the pot and will definitely challenge this in the courts if it is forced through. The only way to have a chance of getting the SOA to work is to use the SAME DATE for exchange rate calculations as the DSC would use.
Who would like to join me in legal action if the SOA goes through in its current form?


Defeating SoA on 19 February

  • jkk
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 17:19

Klauseriksen, I will gladly join you in any future action against IoMG. But I think there is a much simpler, quicker and much less expensive way of defeating this criminal scheme.

All we have to do is find a lawyer who will petition the Court in our name to issue a liquidation order on the 19th February and... that's it! I am hearing that Deemster Corlett might be very sympathetic to such petition this time.

I do not think we will get support from the LondonTeam and their lawyer for such action, because they seem to be quite comfortable with prolonging this farce indefinitely. I cannot appear personally in the Court because I am broke and stuck in a remote corner of a remote continent. But if we can find a lawyer who will accept a deferred fee payment, I am ready to add my name to the petition.

Do you think Jonathan Smalley could be interested?


Time to launch legal action to recover our deposits

  • bdsa
  • 10/10/08 02/06/13
  • a depositor
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  • Sat, 14/02/2009 - 16:29

klauseriksen, I'm in favor of legal action if they offer us anything less than 100 percent plus interest and costs and compensation for the hardship we have endured. Despite all our outreach efforts and lobbying, so far nobody in the Isle of Man Government has admitted any responsibility for their negligence nor indicated any intention to reimburse the depositors in full.

And the final insult is this SOA proposal. Do they really think foreign currency depositors would accept a discounted exchange rate and the surrender of their legal rights, all for a promise of a possible 60 percent reimbursement? The fact that the Government proposed such as scheme demonstrates that they are out of touch with reality and, quite frankly, incompetent beyond belief. I really don't think there is anyone at home in IOMG and the time is long past for us to expect any serious response from them.

The way forward for the depositors is clear - an overwhelming vote for liquidation, followed by the launching of a legal action to reclaim our deposits plus interest and costs. How the IOMG will finance this 100 percent reimbursement is their business. Many viable options have already been put on the table. Perhaps Alix and Partners can advise them. But since they obviously don't intend to do it voluntarily then our only option is to use the court system to compel them.


Bonds..again

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 13:37

When you say...There is absolutely nothing for Bond holders do you mean here is nothing mentioned Or do you mean they state Bond holders will get nothing...?? My understanding was that over 400 million was deposited via bonds (Is that correct ? ) and that only going the S.o.A route would help the cause of Bond holders......Surely the Insurance companies with so much invested will have a massive say in all this and if the SoA doesnt allow for this how can the whole thing move forward...


Chipmunk.. bonds

  • Anonymous
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  • Sat, 14/02/2009 - 14:17

Apologies! Just meant that there is no reference to bondholders!
Insurance companies will be treated as any other large creditor.. unless the IoMG have done a side deal about which we know nothing.
We have contacted all the insurance companies but only had fairly non-commital replies to date, as indeed other depositors have.
We have also written to the IPA and the Insurance Companies concerning the role of Donald Gelling. The letter is here:


email exchange with insurance co

  • Alastair
  • 10/10/08 30/09/09
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  • Sat, 14/02/2009 - 14:42

London team has the 36 hours passed and have you published the email exchange you mention in the letter. If so where? Thanks.


Bonds

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 14:28

Thanks London team...By the way please ad one more Insurance company ..Hansard.....I believe they also have many millions deposited via Bonds....I have almost half a million alone in there....I do talk to them often but they are not so responsive.....


observations on the position taken by IOMG

  • Anonymous
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  • Sat, 14/02/2009 - 12:59

I hope no-one will mind if I repeat my comments, posted elsewhere on this forum, in reply to a posting from "Manx-person":

Maybe I am missing something, but what is the source of additional money, over and above liquidation + DCS, that is the basis of what you say is the greater certainty in the case of the SoA? I still find this mysterious.

Also, why should the SoA require depositors to give up their statutory rights in the DCS? Why should the DCS not still be available to be called upon if the SoA does not perform as is being claimed? After all, it is now accepted by our opponents (I think that is the right word in this case) that the SoA will still permit liquidation to be called upon if necessary.

Going back to basics, are we now to accept that the DCS was never necessary, and that depositors should have been told when they put their money in the bank: "You can deposit your savings with confidence, because the IOM is very proud to announce that it has absolutely no depositors' compensation scheme. Instead the IOMG is committed to proposing an SoA in the event of a bank's collapse and, as should be obvious to everyone, an SoA will always be better than a statutory government guarantee".

Have I got that right? If so, one wonders why almost all other countries have a compensation scheme. Also, I find myself wondering why the IOM banks and the IOMG attached so much weight to the existence of the DCS right up until the very moment that it was needed, if they knew all along that a scheme of arrangement would be better for depositors.

I return again to my point in an earlier posting. The IOMG kees saying that it aims to do what is best for depositors and best for the IOMG. Best for the depositors (i) is return of all their savings. Best for IOMG (ii) is spending as little of its own money as possible and avoiding the stain of a liquidated bank on its reputation. The problem is that (i) and (ii) are mutually exclusive.

Finally, why replace a well tried and tested process (liquidation) with an untested and as yet unparticularised scheme, especially when the former is also reinforced by a statutory guarantee?


@elgee: Tynwald on Bank SoA contributions-

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 15:46

Here's the link:

http://www.manxradio.com/audiovault/Keys-1.wma

As I understand the Banks contribution to the SoA "is dependent on the fact the the payments will be no more than that under the DCS.

At least that's what I understand from the comments.

Listen and tell us how you interpret their comments.


Banks agreement to payments

  • Spanishfly
  • 25/10/08 31/05/09
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  • Sat, 14/02/2009 - 19:17

From listening to the recording I get a sense of panic They have no formal or even letter of intent from the banks how much still talking when still talking Wake up lads the hearing is on the 19th Feb NEXT WEEK , you are really tell us that we have no money other than what the IOM has fronted up .
How can any depositor make a judgement on that sort of waffle, a statement was also made that 6000 had already taken up the 1000 pound bung , who are these 6000 ?

As I have posted before I am growing very tired of being treated as money grabbing, only after the high interest offshore tax evader , we appear to be getting yet again the run around buying time WHY IOM?

The 10000 Pound Early Payment appears to have been a PR stunt where has that gone that was to suck us into SOA .
I will be too old to enjoy my own money I worked long and hard ,I retired , Now GONE , Yesterday I was Mixing concrete for a days pay When was the last time Mr Tony Brown had to graft for 10 Hours for 80 Euros .

Liquidate lets get this show on the road


Banks agreement to payments

  • Anonymous
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  • Sat, 14/02/2009 - 23:32

There are, as I understand it, 31 banks that would be levied under the DCS. Their maximum contribution would be £350,000 each p.a., say a maximum of 11m p.a. A reasonable expectation might be around 7m p.a., which is around 35m over the likely period of the proposed SoA. That amount of money will make very little difference to the net payout to depositors - perhaps at most about 7% (assuming total payout of 60% of 800m).

So perhaps you are right. Maybe the banks are not expected to contribute anything or hardly anything to any knd of scheme (DCS, SoA) and the SoA has been devised primarily to conceal that.

If so, then the banks themselves are dictating IOM government policy, which is a curious state of affairs especially as the banks all share responsibility for the financial crisis that precipitated the downfall of our bank.


@Spanishfly

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 14/02/2009 - 19:32

When I met with Allan Bell I posed this very question about the banks agreement and contribution to the SoA; he was quite adamant that extensive discussions had taken place with the participating banks and that they were in agreement. I noticed just a tinge of aggravation over this particular question, a little dismissive. I asked JW about it and he volunteered that any discussion would be confidential and we wouldn't get sight of any agreement between the Treasury and the banks...


Emperors New Clothes

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 20:44

After 4 months Alan Bell could not give the Tynwald a straight answer this week when asked about the Banks committment to fund the proposed SOA (or DCS I presume).

I believe that the Banks, who are all under severe pressure to stay afloat, let alone profitable, have all told Mr Bell to go and take a running jump. A number were part nationalised by HMG so you can imagine how keen they are to contribute to the SOA.

This latest SOA appears to me to be the last attempt of IOMG to get us to agree to a SOA (which the Treasury will fund without reference to the banks from what I can see) so that the DCS is not triggered as they are afraid the world will see that the DCS is made of the same substance as the Emperors New Clothes.

PS. they must be running out of fag packets in the IOM - the rock solid Parental G'tee was written on the back of one, as was the rock solid MOU between the FSC and FSA and now it appears the DCS is also written on the same type of material....


Emperors New Clothes

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sat, 14/02/2009 - 21:24

Well as I see it the next court decision is whether to allow a further postponement to develop the SoA (which is a legal document not a bunch of projections) or to liquidate.

The EPS will hopefully be increased to £10K and I understand this will be available whether there is a SoA or a Liquidation.

If the decision is made to liquidate then the DCS, and liquidation is what you get.

If a decision is made to allow the SoA to be developed then the document will be produced and it will be voted upon.

If the SoA is then approved by the requistite majority, thats what you get, if not revert to DCS and liquidation.

It wouldn't really matter if the parental guarantee ran to 200 pages. The issue is, and was from the day it was written (i) whether it is enforceable and (ii) Whether the guarantor has the money.

If you think the DCS is worthless, then it seems to me that the SoA could possibly produce a better result.


manx-person

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 21:45

You have posted often over the past 4 months and I always read them as you do appear to have a good knowledge of the IOM Financial Services industry. I know you have been open about your circumstances but I think it timely to remind all that you are not a depositor and you work in the IOM Financial Services Industry so have a vested interest in keeping it alive and well - please correct me if I am wrong.

One thing that we all need to be careful of is not allowing our anger to overpower everything else so that we as a group end up cutting off our nose despite our face just to hit out at the IOMG.


kiwi38

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sat, 14/02/2009 - 22:48

Yes, you are right, although there are other posters on this forum who I know have simply misdeclared their depositor status.

I don't disagree with what you have said in your post, but I think that the SoA is the best chance of optimising a result for the depositors. For example the IOMG could change their undertakings and give additional undertakings. Its about experting influence in order to get this change.

In the case of an SoA the Treasury in effect defer their £10M till (if) all depositors get 100%. In a liquidation they would just get a pari passu distribution.

The position regarding foreign currency depositors and date of conversion is 'fixed' with a liquidation, an SoA has the capability to do something different.

Of course people may think that the SoA is, to quote Mr Roper "a scheme of smoke and mirrors" and if thats the case and people vote against it then it wont go ahead.

I appreciate your comments about anger, but if I had been a depositor I would not be very happy about the speed and nature of the resolution proposed so far by the IOMG and the performance at the TSC etc. and consider that in the most part people on the forum have been very civil given their perilous situations.


SoA

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Sun, 15/02/2009 - 11:52

Manx-person you appear to be an "insider". In any case you have not denied it.
I personally do not object to insiders in the Manx financial services industry posting onto this forum.
You mention that the Manx Treasury has agreed to defer repayment of their deposit of £10m until all other depositors have received 100%. That represents good but insufficient progress.
You mention that the IOMG could change their undertakings and give additional undertakings. I take it this means that the exact terms of the SoA are very much negotiable!
My personal opinion is that the biggest stumbling block is the percentage recovery at which the IOMG loan is repaid. This percentage is currently unacceptably low at 60%. I would need to see a significant increase in this percentage. I assume a DAG team could negotiate a substantial improvement!
As depositors with £50k or less at stake are not impacted by this I believe that these negotiations should be organised (and paid for if we need legal assistance) by depositors with >£50k involved.
I am prepared to make a contribution to such a scheme provided such a contribution is on a pro rata basis.
I realise not everybody with over £50k will be able to or will be prepared to contribute but the percentage contribution would be extremely low.
Ng, perhaps a "poll" could be conducted for depositors with over £50k to find out how many feel that this would be a worthwhile strategy.
Thanks


SoA and FX factor for non sterling accounts

  • columbgc
  • 11/10/08 14/07/10
  • a depositor
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  • Sun, 15/02/2009 - 12:09

Barabander,

Another significant factor for the non sterling account holders is the proposed date for the FX rate. In my case (and probably others’ as well) the SoA guaranteed 60% at the OCT 08 date is less than the DCS guaranteed 50K at the FEB 09 FX rate! If indeed aspects of the SoA are negotiable, then I don't see many non Sterling account holders be willing to go for the SoA unless the FX date is revised or there is an agreement to pay back the 60% in the currency of the original accounts.


foreign currency holders

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Sun, 15/02/2009 - 12:18

Fair point! It is evidently unfair that the trigger point for conversion to Sterling is 8th october 2008. A fairer date would be the date at which an agreement is reached. The point in my previous post is that forever repeating the mantra "we want 100% back and we will not accept anything else" may ultimately get depositors with over £83.33k (£50k/0.6) not a cent more than 60%. Conducting realistic negotiations with the IOMG may get us a better deal than that.


Fifth columnists

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sun, 15/02/2009 - 04:25

If you know there are moles on this site, please send an e mail to Ng and identify them.

It would show that there are indeed people out there who wish to sabotage our endeavours.

In regards to SOA vs DCS, the latter is enschrined in law, the former is not and anyway has not been adequately defined.

To be fair to all IOM residents, I am happy to follow the rule of law.


kiwi38

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sat, 14/02/2009 - 22:52

duplicate post...


@elgee: Tynwald on Bank SoA contributions-

  • Anonymous
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  • Sat, 14/02/2009 - 16:07

Thanks. If that is right, then that suggests that less money would be available under the SoA, doesn't it?


To me it suggests that there

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 14/02/2009 - 16:47

To me it suggests that there won't be any more money available.


I AGREE WITH ELGEE

  • Monkeyface3604
  • 10/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 15:44

I think Elgee is identifying some very good points.

Quite clearly the fact that the SOa is asking us to sign away our rights means that someone involved in the process is clearly worried that they are liable. I for one do not intend to give up any of my rights!!!

The DCS which has always been unclear as to how it works is all of a sudden being twisted into something that appears to be worse than the SOA......note i only say appears. At the end of the day someone is liable in this mess and as long as we keep hold of our rights to pursue that person then i feel we will have a more favourable outcome...its the ace up our sleeve, lets not fold it for a half hearted hand....the slight chance of a flush!

Why do the IOMG not want to go to DCS......I say f*ck it lets find out and go for the liquidation!!!


Less Funds in SoA than in DCS

  • jkk
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 14:10

"Manx-person" seems to be an abbreviation of "manx-government-person" so let us not pay too much attention to that person's propaganda.

Concerning the funding of the SoA, it needs to be pointed out that there will be less, not more, money in that latest version of SoA than in liquidation + DCS. The SoA "top up" payments are funded by Manx Treasury alone whereas the DCS will receive additional funding from the banks operating on the island.

There is also the question of moratorium on legal actions under SoA. In case of liquidation we retain all our rights to sue all parties that may be culpable in the bank's failure including IoM government. The liquidator may even be obliged to lead a legal action on our behalf, and with a bit of luck we may recover 100% of our deposits.

It is difficult to imagine that a scheme administrator would initiate such action against the government who employed him in the first place.


additional funding from banks

  • sambururob
  • 10/10/08 n/a (free)
  • a depositor
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  • Sat, 14/02/2009 - 17:40

Following the Tynwald debate i understood that the banks contribution would be limited to circa £270,000 each per year for three years. If there are 34 banks we are talking about £10 m p.a. It is costing Tynwald £94m to pay out £10,000 each. I don't think the banks are a major bonus compared to the return of the £550m from Kaupthing UK.


SOA is dependent on IOM banks too

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 14/02/2009 - 16:39

Your rational for there being less money in the SOA than the DCS is flawed. Listen to the Manx Radio broadcast of last weeks House of Keys session. The SOA is dependent on IOM bank contributions too - if they don''t agree to contibute then the SOA fails and the bank goes into liquidation anyway.


No Mention of Banks' Participation

  • jkk
  • 10/10/08 31/05/09
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  • Sat, 14/02/2009 - 19:40

I heard all kinds of funny stories on the radio, but there is no mention of banks' participation in Bell's and Lovett's affidavits. They declare under oath that the scheme will be funded by proceeds from the liquidation plus a loan from the Treasury, which they will claw back afterwards.

There is no legal framework for banks to contribute to the present version of the SoA.


Bank participation

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 14/02/2009 - 20:49

Agreed, from the Tywenald 'debate', there is not (or was not at that time) any written/legal agreement between IOMG and the banks. If the plan is for the banks to pay the Treasury (as opposed to them paying directly into the scheme) then I doubt that there would be any legal requirement to mention them in the affidavits. It does beg Elgees question (below) as to how the banks themselves benefit from the SOA over the DCS (or else why sign up for it) - and more importantly how that might affect overall return and timing after the 60% threshold is reached. Like a previous poster I fail to see how ~10M a year has a significant impact on meeting the 50k/ 2 year 'guarantee'so not sure why the SOA is reliant on the banks. (I can think of some reasons - but there is enough speculation on this site already)


Yes, SoA = Stand on our own Assets

  • gerry paul johnson
  • 13/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 19:57

I too understood that the SoA was a stand alone proposal, not linked to any other banking entity. Is this wrong?


SOA is dependent on IOM banks too

  • Anonymous
  • Offline
  • Sat, 14/02/2009 - 19:00

Okay, then let's suppose that there is the same money paid by the banks in both the DCS and SoA. Quite apart from the question of what is the advantage of the latter to depositors (which apparently is one of speed of payout, but only because the IOMG chooses to slow the paying out process down in the DCS case) what is the advantage to the banks of the SoA, because evidently there must be one? I have been told that it is that there is a greater likelihood of the banks being able to recover their money in the case of the SoA, but am not sure that I understand why since in both cases the money to repay the banks has to be recovered by liquidation or the same process under a different name in the case of the SoA?


Spectating not Participating

  • gerry paul johnson
  • 13/10/08 31/05/09
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  • Sat, 14/02/2009 - 21:11

The most obvious benefit of the SoA for the banks is that they would not have to make a contribution (which by all accounts they are extremely reluctant to do).
Since the DCS would not be invoked, they would avoid having to make any payment, and the IOMG could claim never to have had to invoke the DCS, and therefore demonstrate "good governance". Despite facts demonstrating the contrary.


@elgee 2 - the pot size

  • rbirch
  • 13/10/08 31/05/09
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  • Sat, 14/02/2009 - 13:58

no, you are not missing anything, the pot size is the same whether its DCS or SoA.

my view is that giving up our legal rights under the DCS requires much more than a marginal improvement on timing .....

like someone else posted, i was expecting the affidavits to dot i's & cross t's of the SoA so an informed comparison may be made .... perhpas this might arrive before 19th .. otherwise we are no further forward


DCS vs. (new?) SoA needs to be explained better side by side

  • columbgc
  • 11/10/08 14/07/10
  • a depositor
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  • Sat, 14/02/2009 - 10:41

Before we can draw any conclusions on what's best for each of us, we should ask for a side by side comparison between DCS and SoA. Too many assumptions / interpretations from our side are floating around. London Team, via our lawyer, should be able to explain these in plain English by comparing them using examples covering the <50K and >50K as well as currencies (GBP, USD, EUR).


Another difference between

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 16:55

Another difference between the SoA and DCS. I believe the 3 scheduled payments via the SoA are 'guaranteed' with the IOM topping up/loaning the money to ensure that the payments are made.

The £150 million commited by the IOM to the DCS is not guaranteed. If another bank crashes on the Island between now and October the £150 million will be severely diluted.


Side by side comparisons

  • Anonymous
  • Offline
  • Sat, 14/02/2009 - 12:37

Our lawyers asked IoMG for these.. why should we, the depositors have to pay for this work?
The IoMG have refused to assist us with legal fees to consider the SoA.. and now they are adding to our costs by supplying incomplete information which we are expected to fill in for ourselves!


Disgraceful

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Sat, 14/02/2009 - 13:34

Correct.
Its disgraceful that we the victims of this debacle are left not only bereft but with the donkey work of translating this weasel worded legalise into something vaguely understandable.

Not that its not understandable.

The IOMG dont want to pay out anything ( people dont hold your breath for that 50k) they want a risk free get out plan for themselves.


What's difference in new affidavit?

  • chd
  • 13/10/08 30/09/09
  • a depositor
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  • Sat, 14/02/2009 - 09:18

So what, if anything has changed with these new affidavits, except that we now have the appearance of some big wig QC from London?


Lots of words in the

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 14/02/2009 - 07:34

Lots of words in the affadavits. Not sure if I understand it all.

Regarding the point regarding IOM getting its money back after depositors have received only 60%. You state that:-

'Not until the DCS has been repaid will those still awaiting 40% get any further recompense.'

I am not sure this is the case. The document says that the right of depositors to recieve payments in PRIORITY to payments provided by the Treasury will cease after depositors have recieved 60% of their money. This could mean that once the 60% has been paid, if any other money is recovered rather than all of it being distributed to depositors, a percentage of the distribution (not all) will be returned to the IOM Treasury.

Still not ideal by any means but maybe not as bad as at first sight. Not saying that I agree with the proposal but just trying to cut through all the legal crap!


Payments after 60p: @expatfrance1

  • Anonymous
  • Offline
  • Sat, 14/02/2009 - 12:41

See clause 7.8 e
...... a catch up distribution which shall be made solely to the Treasury.

Layman's view only.
As, I see, moving down.. sunny points out too


Clause 7.8 e in which

  • nivit
  • 19/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 14/02/2009 - 14:17

Clause 7.8 e in which document?


Clause 7.8 e in which

  • Anonymous
  • Offline
  • Sat, 14/02/2009 - 14:55

I think he means sub-paragraph 7.8(e) of the exhibit to Lovatt's latest affidavit.


Expatfrance

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
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  • Sat, 14/02/2009 - 08:53

To quote directly from the documents.
'Once the Pari Passu distribution for all scheme creditors with allowed claims is 60% the company shall pay the treasury an amount equal to the foregone distribution by way of a catch up distribution which shall be made solely to the treasury'

It goes on to talk about starting to pay creditors again once the repayment has been made. Seems fairly straightforward to me, its a loan. Under liquidation they would have to pay the DCS with no recompense until creditors have received their money. In this SOA they are simply loaning the money and want it back ahead of savers. As this scheme will severely effect larger depositors who in the main have to vote for it to get the 75% of value I cannot see why they would do this if it will take two years from the start of the scheme to get 60% and many, many years more to get the rest.

Payouts start 3 months after the start of the scheme. Therefore that will probably coincide with the first anniversary of this debacle. Therefore 3 years after the collapse < £50k get their money and others get 60%. As someone else has already said many elderly people are unlikely to outlive this scheme. It is a disgrace.


Treasury loan

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 14/02/2009 - 16:34

I have valiantly tried to decipher David Lovett's latest affidavit. If I understand the document correctly the key points are:
1. The IOMG are effectively writing off their £10m deposit with KSFIOM
2. The IOMG "lend" interest free funds to enable eligible depositors to be paid up to £50k or 100% of their deposits whichever is the lower. They claim these payments can be made faster than if the DCS is triggered.
3. They claw back this "loan" from KSFIOM once all eligible depositors have received at least 60% of their deposits. This claw back has priority over any further payments to depositors
NB If the DCS was triggered the top up payments made under that scheme would not be claimed back from KSFIOM. The impact of this totally wipes out the advantage of the fact that they are writing off the £10m deposit.

If these interpretations are correct I will most definitely vote against this proposal. As I am a higher value depositor I believe that this arrangement would be considerably worse for me than a straight forward liquidation and triggering the DCS for lower level depositors (even after disregarding the implications of being prevented from sueing the culprits in this debacle!).
I believe that the receiver currently has sufficient liquid funds to pay a dividend of 10%. A depositor with £500k would therefore receive £50k very quickly, in any case quicker than other the proposed scheme as he/she would not be affected by any delays regarding payments under a DCS.
However more importantly, after this depositor has received 60% (£300k) the IOM Treasury would have priority in the payments of any funds recovered by the liquidator of up to around 70% (my assessment). Only when the recovery were to exceed this percentage would this depositor get any additional funds. In my judgement it is very unlikely that there will be a recovery greater than 70% and in any case this might take many years.
It therefore follows that this scheme caps larger depositors to a maximum recovery of 60%!
I hope I am incorrect in my assumptions.
By the way I have less at stake than £500k but even in my specific case the I can still only see disadvantages.


thesunnysouth, Looks like you

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
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  • Sat, 14/02/2009 - 09:10

thesunnysouth,

Looks like you may be right which is no good. I wish they could write this stuff in plan English.

If I understand it correctly, under the SoA depositors will get a total of 50k in 3 tranches over the 2 years from when the scheme starts with the first payment around Aug/Sep. This will be guaranteed even if sufficient assets cannot be realised as the IOM Treasury will top up the amount.

With the DCS there is still no telling how much will be distributed and over what timescale.


@ expatfrance1

  • Nixi
  • 20/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 14/02/2009 - 12:45

"With the DCS there is still no telling how much will be distributed and over what timescale."
No... but at least we could still sue their arses!