Alternative to DCS ?

  • ksfmoney
  • 24/10/08 31/05/09
  • a depositor
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Posted: Fri, 12/06/2009 - 14:19

The DCS seems to be pretty much the SOA in disguise !

It appears we are being asked to assign ALL our rights for possibly a slightly better speed of monies returned. I would understand assigning rights matching compensation paid out but all assigning all rights !!!

As time to register is very tight, please can someone help me in explaining:

  1. Is there any comparison of DCS v Liquidator re expected timing of monies returned?

  2. If we do not participate in DCS, do we need to notify the Liquidator?

  3. Will not participating in the DCS mean a silghtly higher return (eg due to avoiding any Scheme manager fees, etc)?

Perhaps a representative of the DAG could clarify (and also "elgee" as I find him to post useful information).

Thanks everyone

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DCS Scheme

  • jeffwilkins
  • 21/10/08 14/11/09
  • unspecified
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  • Sat, 13/06/2009 - 08:56

If you read all the notes I beleive you will find that you have either 18 months from last october or 6 months from the date of the scheme whichever is shorter so as the scheme cam into operation a few weeks ago it will be 6 months

Please check !!!

Jeff Wilkins


jeffwilkins, re: DCS claim period

  • Anonymous
  • Offline
  • Sat, 13/06/2009 - 11:58

The period during which one may apply for DCS compensation is not exactly as you have indicated. Below is an extract from the Depositors' Compensation Scheme document. As you can see the 6 & 18 month periods are based on the date of default which in our case, I believe, is 27 May 2009. Between 6 and 18 months from that date the Scheme Manager appears to have some say as to whether to accept the delayed filing but after 18 months the application for compensation would be rejected outright.

"A depositor's application for compensation shall be rejected-

(a) if submitted more than 6 months after the depositor became aware, or ought reasonably to have become aware, of the default, unless the Scheme Manager determines that, by reason of exceptional circumstances, it ought to be allowed; or

(b) if submitted more than 18 months after the date of the default".


DCS and Assignment of rights

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sat, 13/06/2009 - 05:55

It is clear to me that we have another lacky of IOMG appointed as manager of the DCS by FSC.

WTF don't they do it themselves?

I'll tell you ---- they are still obfuscating and protecting themselves again so they can blame somebody else for the mess.

Fayle may be OK but, who would ever give an IOU for 300,000 when the pay out guaranteed is 50000?

It would appear that with all those voting rights, they will control the creditors committee yet again!

I am not affected by this personally but having registered on the DCS site, I am waiting for a consensus before claiming.

I have scanner and printer so can delay my claim to the last minute--whenever that is.

My understanding is that scanned and e mailed claims are acceptable---post not essential.

If we all delay our claims to the 11th hour, we will instigate an overwhelming logistics problem to FSC/manager Fayle.
Why oh why 30th June--arbitrary--no creditors meeting mid July--yes.

They try to stitch us up again me thinks.

What say you Mr. Fayle---p' lease.


Great idea - as long as you...

  • Anonymous
  • Offline
  • Sat, 13/06/2009 - 06:58

....appreciate the additional overtime worked by the Scheme Manager to cope with the late applications will be chargeable to the >50k depositors' pot


Alternative to DCS ?

  • Anonymous
  • Offline
  • Fri, 12/06/2009 - 20:58

I would not want to discourage anyone from claiming from the DCS if they need the money. Those with less than about £350,000 but more than £50k deposited would gain a timing advantage by claiming from the DCS, but no more money of course. In general, those with less than £50k deposited would certainly be better off claiming from the DCS than through the liquidator. The smaller the deposit the more worthwhile it is to claim from the DCS and the less risk there will be in assigning all rights. Frankly, I doubt if there is any real risk in assigning rights to the FSC, other than indirectly as a result of the FSC acquiring influence over the liquidation process through voting, but this remains to be clarified. Indications are that FSC might be persuaded not to use its votes at the first creditors meeting and in any case it will probably not have acquired enough by that time to make any difference since I understand that the first cerditors' meeting is likely to be 7 July.

You will need to claim from the liquidator at the appropriate time if you do not claim from the DCS.

As to (3), not as far as I can tell (unless of course your deposit is less than £50k).


Alternative to DCS

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sat, 13/06/2009 - 07:09

If I could add a comment;

If someone has less then £50K (or say 2 joint eligible depositors have a combined deposit less than £100K) then they will "get more money" under a DCS claim than a liquidation claim (unless of course there are 100% realisations from the liquidation when).

Of course the comments made elsewhere about acquired voting rights/full assignment/ability to compromise still apply.


Elgee Q ?

  • merlina
  • 26/01/09 01/06/09
  • a depositor
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  • Sat, 13/06/2009 - 03:32

Regarding your post - I can understand with up to 50 grand, DCS and signing your rights away is OK because you have your money back, but how is it OK for upto 350 grand depositors ?


Elgee Q ?

  • Anonymous
  • Offline
  • Sat, 13/06/2009 - 14:15

Merlina, to answer your question it is necessary to make at least one assumption. I am going to assume that the liquidation will yield at least 70% and I am also going to assume that the DCS will pay out in full within 3 months (because that is what the FSC's FAQ says). Please be aware that one or both of these assumption may be wrong.

Now I can make several clear statements (clear by my standards, anyway):

  1. For those depositors who have less money on deposit that their maximum entitlement under the DCS (£50k in most cases, £100k in joint accounts etc etc.), it obviously makes sense to claim from the DCS, because those depositors will obtain 100% compensation by doing so, whereas under liquidation they would not;

  2. For those depositors 70% of whose money on deposit is less than their maximum entitlement under the DCS (see above), it also makes sense to claim from the DCS, because they are likely to recover more of their deposit back by doing so, and they will get it more quickly. For a single non-commercial depositor, this means those with less than approx £70,000 on deposit with the bank.

  3. For those depositors with more money on deposit than (2) and 15% of whose deposit is less than their maximum entitlement under DCS (see above), if they claim from the DCS they are likely to get more by way of their first payment than if they claim only under the liquidation but overall they will probably not recover any more of their deposit. For a single non-commercial depositor, this means those with more than approx £70,000 and less than approx £350,000 on deposit with the bank. This group of depositors have to think carefully and make their own decisions about whether they want to take the risk of assigning their full rights in the liquidation to the FSC in order to gain what is likely to be a timing advantage only.

  4. For those depositors with more on deposit than (3), there is no apparent advantage to claiming from the DCS.


Elgee Q?

  • manx-person
  • 17/10/08 31/05/09
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  • Sat, 13/06/2009 - 07:46

The relevance of the £350K - I think - is that the expected first dividend will (for a £350K depositor+) mean that they get £50K back in any case as the first dividend payment.
IMPORTANT - If you are a joint account holder though, you could make 2 DCS claims in respect of the account, so consider this as well!
So if you have less than £350K then you should get your first £50K back quicker by signing up to the DCS, as it should have IOMT funds which it can use to pay its claimants (and it will in due course "levy" the banks)
As to whether you would/should assign your rights, I think that the point elgee makes is it is unlikely the FSC/KPMG (as their agent) are unlikely to abuse their, arguably disproportionate, assignment of the whole deposit rather than the deposit amount, save for the possibility, as he states, as to how this might affect voting at the first creditors committee.


Elgee & Manx-person

  • merlina
  • 26/01/09 01/06/09
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  • Sat, 13/06/2009 - 15:52

Thank you both for explaining things to me. So it means if we (joint x2) receive 50k each = 100 and then 70% (if) we will have all our money back. eg 350k - 100k - 70% = 100% return.


Merlina & Elgee - I think your figures are wrong.

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sat, 13/06/2009 - 17:52

No, that isn't correct - but elgee please check
You will receive £100K from the DCS, irrespective of the level of dividend.
If the dividend is 70% you will receive £245,000 back from the Bank.
£100K fro the DCS and £145K from the dividends


Obviouslyªªªªªªªªªªªªªª

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Sun, 14/06/2009 - 05:28

The depositors are not arithmeticians!

This is absolutely clear. And it is reasonable to assume this.

However it is reasonable to assume that the technocrats of the IoMG are. And they appear to be pretty much incompetent. This alone challenges their claim to be in charge of the situation. Clowns rule!!!!!!!!!!!!!!!!!!!

How do we knock these clowns back? That is the question. Clowns are clowns. Clowns dissembling, IoMG politicos and apparatchiks as well.

Let-s GRIND.


I was just trying to explain

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sun, 14/06/2009 - 09:56

I was just trying to explain how I thought the calculation was made; nothing more nothing less.


Manx-person

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 13/06/2009 - 19:04

Error


Manx-person

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 13/06/2009 - 19:20

error


Merlina's figures

  • Anonymous
  • Offline
  • Sat, 13/06/2009 - 18:45

Manx: I agree, I cannot understand Merlina's figures


DCS payment

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Fri, 12/06/2009 - 21:22

There is a lot of consternation about assigning rights, particularly, and quite rightly, amongst depositors with large deposits. Even though we understand that under the DCS there will be a payment in the next few months do we have any idea what it will be? If we were to receive a full 50,000 then it would be an issue. But to stress ourselves even more before the DAG team has time to report is not going to help us a lot especially when the amount paid out might be considerably less.

Thanks Elgee for your comments..


DCS payment

  • Anonymous
  • Offline
  • Fri, 12/06/2009 - 23:01

The DCS FAQ says, and has said since it first appeared, full payment within 3 months:

"A. At this stage it is hoped that full payment of all compensation due under the Depositors` Compensation Scheme will be made no later than 3 months following the date of default. However, this timetable may be subject to change."
[www.dcs.im]

This statement appears to have been contradicted or at least put in some doubt by John Spellman several times, in statements made to the press and other media, who has indicated that only the first payment under the DCS should be expected within 3 months. My view is that prospective claimants are entitled to rely on the intention unambiguously stated in the FAQ itself, insofar as it is expressed as a hope and not a certainty, in that if it is not fulfilled then questions must be asked about whether there were good reasons or whether the assignment of full rights sought by the FSC was obtained in the knowledge that this expressed "hope" was not in fact what was intended.


Excellent points ksfmoney

  • formymum
  • 13/10/08 31/05/09
  • a depositor
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  • Fri, 12/06/2009 - 15:29

Thanks ksfmoney - this is exactly the information I was after, but you've laid it all out much better than I could!

I know the lawyers letters have been posted on the public site, which I've read, but there's still so much that is unclear, that I just don't know how to answer all my mother's questions, which are basically those above, or at least where to guide her to find the answers. Due to the fact that she's leaving the country next Thursday, she's extremely anxious to put things straight before leaving, as she won't be back until 4/7, which is after the 30/6 deadline.

Is it right that there is an 18 month deadline to claim? But if one doesn't claim right now before 30/6, then what happens?

Grateful for any advice .....


formymum, pros & cons re DCS claim

  • Anonymous
  • Offline
  • Sat, 13/06/2009 - 01:36

Let me state at the outset that I haven't ant legal training and I don't have any better information at hand than anyone else on this site regarding the operation of the DCS but, as elgee has pointed out, the DCS is an obvious advantage to those depositors who are fully protected (ie. £50,000 and under group). It may even prove to be of advantage to those above £50,000 up to £350,000 if, and this is a big if, the first payout by the liquidator from liquidated assets turns out to be 14.5% or less. However, the only advantage to any depositor in this latter group is timing, as elgee has stated.

For example, a £100,000 depositor who does not opt for the DCS will have to wait until 50% of the assets are liquidated before receiving £50,000. How long this will take is anyone's guess. Two or three years???? However, under the DCS it is likely the £50,000 will be paid out before year end or perhaps a little sooner, based upon information we are being fed by IOMG.

For a £150,000 depositor not under the DCS approximately 33% of the assets would have to be liquidated to achieve £50,000.

As I see it, it all boils down to one's concern about how the FSC will treat those rights they acquire from depositors who opt in versus one's need for a speedy payment. In the end, the above £50,000 depositors should receive the same amount in total whether they opt in or stay out. Both options depend on the total assets liquidated.

With regards to your query about the date of June 30th, as I understand, the FSC has stated that claim forms received after that date would likely miss the first payout, which could be a payout in full up to £50,000. Forms filed after this date would still be eligible for a like amount but their payment would be delayed. However, as stated in the DCS legislation, "A depositor's application for compensation shall be rejected-
(a) if submitted more than 6 months after the depositor became aware, or
ought reasonably to have become aware, of the default, unless the Scheme
Manager determines that, by reason of exceptional circumstances, it ought
to be allowed; or
(b) if submitted more than 18 months after the date of the default".


DCS and Joint Account Holders

  • Equus
  • 14/10/08 08/06/09
  • a depositor
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  • Sat, 13/06/2009 - 05:44

I have a query about joint account holders. My husband and I had two accounts with KSFIoM which total approximately £560,000.
Is my understanding correct in that we would receive £50,000 each under the DCS but if we waited for the first 14% dividend we would receive £78,000 in total so we would be better off with the DCS?


@Equus DCS & Joint Account Holders

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 13/06/2009 - 07:44

Equus: My wife and I (like many others) are in this position. As I understand the DCS regs, each joint account holder is treated as an individual account holder; the sum total of the accounts and amounts held by the joint account holders is divided by the number of account holders (2 in our case) and then assumed to be seperate for the purposes of compensation. In your case, you would be treated as two individual account holders each with an eligble deposit of £280,000. This would (should!) provide each of you with the maximum protected compensation of £50,000.

There is 'hope' on the part of the FSC that full compensation will be made to protected deposit holders within a few months; this may be true, but it could be just 'hope' and nothing more substantial than that. (I personally don't believe a word they say, but that is only my perception). If the initial liquidation dividend is 14.5% then you would receive £81,200 between you or £40,600 each. Obviously, this is a little shy of £50K, but it seems to me there is no guarantee that £50K will manifest itself to those entitled to this maximum sum within any given/agreed time frame. Like others, I too an concerned by the wording of the DCS regarding the assignment of rights.

It appears to me that the partially protected depositor has not really been considered in this document, just as they were not properly considered in the allocation of Class meetings. To the layman, it is absurd that a fully protected depositor with a £50K account has only to relinquish his rights to this £50K in order to receive this sum by way of compensation in full, yet a partially protected depositor with a £1M account has to assign an extra £950,000 to the scheme manager in order to avail himself/herself of the same £50K deal. I think there is possibly something in the regulations 16. 2 (c) and 16. 4 that might allude to this situation, but it is difficult to unravel, and my guess at this stage I am keeping to myself. I do hope that Mr Green's exchange of letters with the SM will elicit a proper answer and allow us to assign rights of £50K to the scheme manager whilst retaining our rights to those unprotected sums above the maximum compensation limit.


Liquidation dividends and timing - any views Frog? anyone?

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Thu, 18/06/2009 - 16:05

Thank you IceCrusher for your comments re DCS and joint account holders. We really do not wish to relinquish our rights under DCS but have not had any success trying to elicit information from the Liquidator's office with regard to dividends and timing in order to make a decision. Do you, Frog, or anyone else, have any ideas about the likelihood of an end of year dividend - subject raised during Mike Simpson's last conference call- and what it would pay out?. There is the 94 million approx.- which may or may not be available for pay out - and if I recall correctly perhaps 10% back from KSFUK + ? What pence in the pound is this likely to represent?


This is direct from the

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Thu, 18/06/2009 - 18:20

This is direct from the horses mouth so to speak, I got this during an exchange this week.

"The first dividend will be in August and will be 14% plus whatever other cash we can realise before mid August (the 14% is based on cash currently in hand). There is likely to be a second distribution around Christmas/New Year which is likely to be around 10% - this is largely based on the proceeds of some shares we have sold, but I am not permitted to release the proceeds yet".

That's the best info we have at this moment.


to expat

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Fri, 19/06/2009 - 12:12

Thanks very much for the information. If the mouth speaks again soon, certainly in the next week, please will you post.


jmf, if I get any other news

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Fri, 19/06/2009 - 15:09

jmf, if I get any other news that is relevant of course I'll post it.

Can I also ask people to keep up the writing pressure on HM Treasury, it would be good if others joined in. We mustn't let these complacent b...s get away with their incompetence. There can be still be a political solution and HM Treasury are a part of that, as are Justice, who icdbrazil and I (and I hope there are more of you doing the same) are having a war of words with. Again can I ask people to also keep on writing to these Ministries demanding answers and action as requested by the TSC.


Recovery of costs by the DCS

  • Jhas
  • 11/10/08 31/05/09
  • a depositor
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  • Thu, 18/06/2009 - 09:23

Icecrusher: My wife and I are in the same category like you. I agree with your assessment that it would be better to claim from the liquidator rather than the DCS.

Besides the issue of assigning rights to the DCS, their "sample calculations" indicate that "Further payments to depositors above the £50 maximum limit per depositor may be subject to recovery of costs". This means that we would be screwed TWICE; first by the liquidator's hefty fees and second by the DCS (who are supposedly helping us "recover" our money and then charging us for their incompetency!). In this case we would recover less money by claiming through the DCS. I think that people in this category should claim through the liquidator unless they need their £50 in 3 months (if they are lucky) regardless whether they would end up getting less down the road.

Another important I would like to mention is that the Liquidator's Proof of Debt Form" requires us under item 3 to state "the total amount of claim and outstanding uncapitalized interest as at the date the company went into liquidation". However PWC letter mentions earlier that the date should be October 9, 2008 (and not May 27, 2009 which I undestand to be the official date of the liquidation).

Does anybody know (I hope that the DAG legal team does!) whether we should add the interest which would have accrued between 9 Oct 2008 and 27 May 2009 (and at which rate?) to the total amount claimed in item 3?

Thanks,
John


DCS and Joint Account Holders

  • Equus
  • 14/10/08 08/06/09
  • a depositor
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  • Sat, 13/06/2009 - 08:11

IceCrusher: Thank you very much for your detailed reply.
Like you we feel it seems sensible to wait to see if Mr Green's exchange of letters with the SM results in clarification about the issue of the assignment of rights to the rest of our money.


DCS and Joint Account Holders Equus

  • Jerome.broke-in...
  • 14/10/08 14/07/09
  • a depositor
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  • Sun, 14/06/2009 - 01:30

One other point to remember is that there is at least another 98M in known assets ready to payout on the second payment. Also the first KSFUK payment and lthe remaining CDs will almost certanly make it as well.

So the second payment will bring the total up to at least 25% may be even over 30%

This means that by the second payment you will have exceded the DCS.

The second payment (acording to MS) will take place in Nov. ~ Dec.


The 98M is subject to challenge. Frog?? thoughts???????????

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Sun, 14/06/2009 - 02:50

What is concrete?
What are the facts, committments (legal), as opposed to hypotheses and cheap (I stress this) non-binding prognostications?

To use an analogy I used before we are living in 'Alice in Wonderland' territory. What exactly is the difference between dealing with a dodgy garage and the IoMG and the contractors and contracted "consultancies"? I would suggest none.

I assume DAG and now HNW have both accepted we are in "grind" territory. But DAG and HNW are hiding (I hope you are listening and thinking DAG and HNW). They both insult this site! Information and information is public domain unless they wish to fellow travel with the IoMG and the financial establishment As for the stupid agitprop of "Jim", well it has reached sell by date.

Precision attacks are needed.

I am not a mushroom. I presume that the reader does not want to consider themself a mushroom -tampoco-

Let us be real. The liability for the fracaso we suffered does not really lie with the iom taxpayer =a mute point as so many and so much of the IoM economy is dependent on the churn and potentially fundamentally fraudulent activities of the resident alien presence of the international "financial community".
This financial community does not want to have to compromise their oversize gains, and they contol the IoMG through the threat of withdrawal.

Let us understand the big picture thoroughly and then descend through their institutions to embarass those that compromised their integrity to try and protect themselves whilst shafting ourselves.

Tell me what other interpretation is possible? That the "normal suspects" were completely confused by the situation? You believe that and you would believe anything.

We grind. And the question is: How many are prepared to grind?


The £98M/distributions

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sun, 14/06/2009 - 09:45

In respect of distributions, It is for the liquidator to decide how much of the 'cash' to distribute.
When making a decision on how much to distribute he will consider costs that he has/may have to pay such as the liquidation expenses, running costs of the bank, any retentions required to support possible claims and future litigation.

There isn't a science here, it will be up to his judgement.

In respect of the £98M once it is distributed it cant be given back - its not uncommon in liquidations for amounts to be retained for some time before distribution, and also for amounts claimed/held to be subject to dispute.


Recovery of costs by the DCS

  • Jhas
  • 11/10/08 31/05/09
  • a depositor
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  • Thu, 18/06/2009 - 09:36

For folks in the £50k to £350k category, besides the issue of assigning rights to the DCS, the sample calculations made by the DCS scheme manager indicate in a footnote that "Further payments to depositors above the £50k maximum limit may be subject to recovery of costs". This means that we would be screwed TWICE; first by the liquidator's hefty fees and second by the DCS (who are supposedly helping us "recover" our money and then charging us for their incompetency!). In this case we would recover less money by claiming through the DCS. I think that people in this category should claim through the liquidator unless they need their £50 in 3 months (if they are lucky) regardless whether they would end up getting less money down the road.

Another important issue I would like to mention is that the Liquidator's Proof of Debt Form" requires us under item 3 to state "the total amount of claim and outstanding uncapitalized interest as at the date the company went into liquidation". However PWC letter mentions earlier that this date should be October 9, 2008 (and not May 27, 2009 which I undestand to be the official date of the liquidation). Does anybody know (I hope that the DAG legal team does!) whether we should add the interest which would have accrued between 9 Oct 2008 and 27 May 2009 to the total amount claimed in item 3 of the Liquidator's Proof of Debt Form? If so, what interest rates should be used for various currencies?


@jhas

  • Anonymous
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  • Fri, 19/06/2009 - 00:51

9 Oct 2008 was the date of the petition for winding up. The date of the liquidation was 27 May 2009.

I think item 3 does allow depositors to claim in the liquidation for interest accrued between those two dates. As you may know, there is also a question as to whether the DCS should admit claims for interest accrued in that period of time and that will probably have to be decided by the court because FSC takes one view and DAGST takes another.


Help needed from the DAG legal team

  • Jhas
  • 11/10/08 31/05/09
  • a depositor
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  • Fri, 19/06/2009 - 01:38

PWC has just issued the following "so called" clarification about Item 3 of the Proof of Debt form:

Update on completing the Proof of Debt Form:
With reference to the Proof of Debt Form, attached to the letter to creditors dated 10 June 2009, we have been asked to clarify Point 3 of the form, which asks creditors to state the:

“Total amount of claim, including any Value Added Tax and outstanding uncapitalised
interest as at the date the company went into liquidation”.

Please note that this is a statutory form and, for the purposes of completing Point 3 of this form, the total amount of claim is as at the date of the commencement of the winding-up of the Company, being 9 October 2008.

I am sure that we all disagree with PWC's statement, since Item 3 specifically mentions the word "liquidation" and not "commencement of the winding petition". In this case, are we supposed to complete the Proof of Debt form "with" or "without" the interest added? If we add the interest on our own, can PWC reject the form? Also how do we calculate the interest for various currencies? If we do not add the interest, can we still claim it later?

I hope that the DAG legal team will issue an urgent advisory about this important issue so we can complete the Proof of Debt form correctly before the due date.