Answer to query by 'concerned son': SoA covers joint account holders up to 50k each

  • Anonymous
  • unspecified
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Posted: Wed, 22/04/2009 - 19:14

The compensation payable to joint account holders for the SoA is the same as the DCS, namely a maximum of 50k per joint account holder. If a joint account holder has another account as well, compensation is limited to this 50k maximum.

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Pension and corporate accounts

  • Noodle 2
  • 15/10/08 31/05/09
  • unspecified
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  • Wed, 22/04/2009 - 22:59

I understand the position with joint account holders but what is the situation with the DCS/SoA with regard to multiple accounts when the same family hold one corporate account, one individual account, and two separate accounts (one account for husband and one for wife) in the name of the trustee of their self-managed pension funds? In all but one case, the deposits are over Stg50k. Please help. This question also applies to to application for the EPS.


Joint Acct Holders

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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  • Wed, 22/04/2009 - 19:55

Hi scottr,
Could please provide the reference point in the SoA that states this please, and also the document it is taken from - I would be interested in reading that particular piece again - perhaps I missed it last time - Thank you


Joint account holders

  • Anonymous
  • Offline
  • Wed, 22/04/2009 - 21:19

Comments are based on SoA document (attached to court affidavit of Alan Lloyd Gough dated 3 April 2009) par 12.5.3 (A) and par. 12.5.4 (B)


SoAScheme of Arrangement

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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  • Wed, 22/04/2009 - 21:45

SoA 12.5.3 A) "seperate Eligible Protected Deposits of that Protected Depositor (including a Protected depositor to which Clause 12.5.4 applies) shall be aggreated and treated as One Eligible Deposit"
This in my view covers a person with more than one account and therefore the accounts are aggregated.

DCS 9.3
(a) separate deposits in the same ownership are aggregated and treated as one
deposit;
(b) a deposit in the joint names of 2 or more persons is treated as if each such
person held a separate deposit of an amount equal to the total deposit
divided by the number of persons in whose names it was held unless subparagraph
(c) or (e) applies;

So the SoA 12.5.3 covers depositors as DCS 9.3 a). Where is the wording that covers DCS 9.3 b)?

12.5.4 B is for the purposes of Top Up payments


Joint Account Holders

  • Anonymous
  • Offline
  • Thu, 23/04/2009 - 06:11

Hi Tricky Dicky
I agree that the legal jargon in the SoA is difficult to comprehend! I hope the situation regarding joint account holders will be explained to depositors in a summary of the SOA in clear and understandable Engish as in the case of the DCS. However my interpretation of par. 12.5.4 B of the SoA is that joint account holders are treated as separate depositors for top up payments - which I understand means that each will receive up to 50k.

WIth kind regards


@scottr

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Thu, 23/04/2009 - 09:00

scottr, I spent 1hour & 20 minutes on the telephone to John Spellman and Geraint Thomas (Alix Partners) during which time we covered many subjects with worked examples discussed over the 'phone. SoA compensation will provide no less than DCS and each depositor is entitled to compensation of up to £50K or the sum in their account if less. Joint account holders will each receive up to £50K in the same fashion. E.g., A joint account of £90K owned by two depositors, then each will receive £20K on the first assured payment; each will receive £15K on the 2nd assured payment, and the balance of £20K will be split between on the 3rd assured payment. This is purely the compensation element of the Scheme! People with lower account deposits will receive more as a % return of their balance than the the percentage return of dividends for depositors not receiving compensation.

Dividends will still be paid under the SoA according to the distribution percentage determined by the LP. Those % return examples shown on previous SoA documents were exactly that, examples based on expectations at that time . The dividends payable in addition to, or in excess of, the compensation sums are variable depending upon the realization of assets from the bank. E.g., an account of £300K will not be subject to compensation because on the first assured payment date the anticipated % return was previously given as 12.5% and as a percentage of £300K this is £37,500 - which exceeds the compensation sum of £20K and therefore the higher sum is paid. If the LP decides to pay 20% on the first assured payment date, then a £300K depositor will receive £60,000. (There was a limit in the examples given on the SoA from D Lovett's 3rd affidavit to hold £20K as the maximum payout on accounts up to £175K - this affects accounts from ~£160K to £175K - not sure whether this limit is still imposed but will write JS/GT and ask.)

Fundamentally, the SoA works much as it was explained by Mr Lovett in his 3rd affidavit, unfortunately the lawyers re-wrote parts of the documentation in legalese for the last court hearing and left out the intended meaning. I have been told remedial action is in process. If total returns do not reach 60p/£ then all monies put into the pot by IoMT for making the minimum assured payments (£20K, £15K & £15K) to those entitled depositors will remain 'in the pot' for distribution to remaining creditors. As dividends from assets increase, the amount of money required from IoMT to make these assured payments decreases in proportion, and at higher realisations could fall significantly. With a minimum return from KSFUK of 50% (the remains of the asset after balancing set-offs is about £394M I believe, so we should expect about £200M back) the IoMT contribution to the overall pot will be a lot lower than previously indicated.

The SoA.DCS Calculator which I posted on the forum early March allows the user to change the first % return - so anyone who has downloaded this tool can make the % return 20% now in anticipation of this first payment. The DCS % returns no longer reflect the latest expectations from Alix and even these will be superseded by recent knowledge of the UK return. I will update the Calculator and attach it to a forum post as soon as I get more information on DCS dividends.

BTW, I live in Bahrain, I am not familiar with any Govt. official in the IoM or elsewhere (although I went to the IoM to suggest to Mr Bell that he borrows money from HMG). I was invited to call JS/GT after emailing a multi-page letter containing many question on the SoA DCS, which JS thought would be better discussed between knowledgeable parties. I am putting this info on the site to try and provide a few facts and clear up several misconceptions. It does not mean that I encourage anyone to do,say, or vote anything on account of the above and I can only say that this is my understanding to the best of my interpetation of what I was told by these gentlemen - the final choice is up to each individual. The affidavits are there for all to read, and JS and others will answer emails and take calls for you as well as me.
Ice


SoA/Liquidation/DCS - Bond Holders

  • GKCheshire
  • 14/10/08 01/09/09
  • unspecified
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  • Thu, 23/04/2009 - 11:33

Ice, would you (or TD) be able to confirm if liquidation/DSC definitely offers BOND holders the same "pari passu" status and a similar schedule of recovery as proposed for SoA. (FYI we are in the significant 6 figure bond holder category.)
I am surprised that there has not been more DAG comment about recovery of minimum 50p/£1 from KSFUK as this is going to make a hugh difference from the expected 60p/65p in the £1 recovery from Liquidation/SoA everyone was talking about even last week. I presume this recovery from UK is now certain which should elevate recovery for all HNW Bond/depositors, closer to 90% (am i correct in that assumption?)
This likely minimum recovery from KSFUK must surely have been known by IOMG prior to the last Court hearing re SoA and if so what does that tell us ?


SOA/Liquidation/DCS - Bond Holders

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 12:14

GK Cheshire

Neither the SOA or the DCS have anything in them for bondholders at all.
You got nothing from the SOA and will get nothing from the DCS
Effectively , as a bondholder you don't have a relationship with the bank at all.
Your relationship is with your insurance company and they have the relationship with the bank.

All Insurance companies will be paid out from dividends declared under liquidation pari passu
These dividends will then be distributed by the insurance co's to it's bondholders again hopefully on the same pari passu basis (though this is at the ins co's discretion)


SOA/Liquidation/DCS - Bond Holders further opinion!!!

  • grapow
  • 20/10/08 31/05/09
  • unspecified
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  • Thu, 23/04/2009 - 12:27

I found the first paragraph of the posting from podather at 12:14 today un-necessarily alarming! My Insurer (NU, who realise the potential for embarrassment here I assure you!) have assured me that the SOA is very much the best option for bondholders. "Nothing in it for us" - apparently nonsensical! On this occasion I am more than happy to take the advice from Norwich Union!


@ grapow

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 13:45

you obviously don't grasp what either scheme entails
Under the SOA or the DCS your insurance company can claim £20,000 compensation to devide between all its bondholders.
If NU believe this offers them something then so be it.
Personally I would consider that nothing.

NU might have voiced a preference for the SOA because of the 60p/£ threshold before treasury clawback

No returns from the Uk have been annouched this is a moot point

They may favour the SOA, sadly for you , you won't get a vote on either.


Why doesnt NU just give you your money back?

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Thu, 23/04/2009 - 13:26

Why doesn't Norwich Union just take responsibility for its bondholders and give them back their deposits?

Of course they will go for the SOA it gets them off the hook.


200 Million Return from HMG

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Thu, 23/04/2009 - 10:22

IceCrusher
would you please advise where I can read about the confirmed return of the majority of the money from the UK............
AND would you please comment on your understanding as where the Bond holders now stand........Im totally confused (As always ! )

Thanks for your dedication and involvement in this issue along with a few others who are a real help for us many laypersons ....always struggling to keep up with things.


Arigato IceCrusher

  • Anonymous
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  • Thu, 23/04/2009 - 09:53

Thanks for taking the time to post this. Useful stuff. Much obliged.
steen


SoA Clarity

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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  • Thu, 23/04/2009 - 07:52

Hi scottr
I'm not being personal here but your comment above does seem to conflict somewhat with your statement from another comment you made ie "Surely a clearly-defined SoA is the less risky option"

As you say in your comment above, it is your interpretation, this SoA document is unclear, and our legal team - which I note you have yet to contribute to unless your account details are incorrect - have a list of questions that are awaiting clarification - again - from the creators of this document.

Regards


No conflict!

  • Anonymous
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  • Thu, 23/04/2009 - 14:46

Hi Tricky Dicky
No conflict! I said that a clearly defined SoA is the less risky option and also that the SoA as it stands at present is unclear. So the SoA would be less risky if it was clearly defined. Hope that is clear!


Deliberately unclear

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Thu, 23/04/2009 - 06:31

The SOA it seems is deliberately unclear.

Depositors shouldnt need to be asking all these questions.

Its full of loop holes for the benefit of the IOMG to wriggle through.

So a team of arrangers Alix- employed by John Spellman have taken 6 months ( at a cost of over half a million pounds) to fabric a half cocked SOA that no one can decipher and benefits only as far as I can see THEIR CLIENT the IOMG.


Agreed Bellup

  • Done like a Kipper
  • 10/10/08 n/a (free)
  • a depositor
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  • Thu, 23/04/2009 - 07:06

How can it take goodness knows how many people (Alix, IOMT plus no doubt a gaggle of lawyers) six months to come up with a document which is gobbledygook. It surely can only point to the fact that that is exactly as they intended it to be - so unclear as to make it full of loopholes!


The SoA is dead, long live the SoA

  • Anonymous
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  • Thu, 23/04/2009 - 09:30

It is being rewritten anyway, so as to correct errors in drafting. Also, I repeat below copy of my earlier post in another forum, which suggests that it will be rewritten again very soon for another reason.

I am in difficulty because, whether through poor drafting or inability to comprehend on my part or both, I am frequently unable to answer quantitative questions about the SoA with any genuine certainty. The best I have been able to do is to guess at what is probably intended (which is what Brabander has done above), and that applies to my own questions about the SoA as well as to others'.

For a contract (which is what the proposed SoA is) that is really not good enough, as all parties should be able to understand perfectly well the meaning of the terms they have agreed upon (in law that is called "ad idem", when there is a meeting of minds between the parties as to the meaning of the terms, and it is supposed to be essential to there being a valid contract). It is also the reason why the proposers' failure to answer questions about interpretation (the proposers being IOMT and the LP) is so frustrating and may ultimately lead to the overturning of the SoA irrespective of the vote (presumably by way of the court declining to sanction it).

Anyway, the expectation is that the current SoA is doomed as a result of yesterday's long-delayed announcement of minimum recovery from KSFUK (no less than 50p/£). So we may soon find ourselves hearing that "the SoA is dead, long live the SoA", when a new SoA is announced. Arguably, now that expected recovery from KSFIOM is in the region of 80 - 90%, if there ever was a need for an SoA for the benefit of the depositors, then this SoA wasn't the one needed and certainly isn't the one needed now, and maybe now there isn't a need for one at all (except of course so the IOMG can avoid liquidation and the DCS).

Suppose I am right and the announcement from London proves fatal for the presently-proposed SoA, with its 60p/£ threshold (that is, for want of a better analogy, renders it as dead as the re-election prospects of the present UK government, and you surely cannot get much more dead than that). That would beg another question - for how long have those persons who ought to know known that recoveries from KSFUK were expected to be at least 50p/£? This figure has reached me in my hovel in the far outreaches of the North London suburbs at least twice during the past several months, so I think it is safe to assume that it reached the ears of the IOMG and the other central actors in this matter quite a while ago, only theirs would have been a much more authoritative source. If I am right, why were the proposers promoting an SoA whose advantage to depositors would be reduced to nil (to paraphrase the words of their own counsel at the last hearing) in circumstances which they knew would soon prevail?

To ask the same questions another way, is the problem here one of a government underestimating the intelligence of depositors, or depositors overestimating the integrity of a government, or both?


good post elgee

  • Anonymous
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  • Thu, 23/04/2009 - 10:02

Thanks for posting, elgee. You've been a great source of info since I signed up.


Too many cooks v too many crooks, one paragraph

  • chris watson
  • 23/10/08 31/03/10
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  • Thu, 23/04/2009 - 07:19

Cooks:

"How can it take goodness knows how many people (Alix, IOMT plus no doubt a gaggle of lawyers) six months to come up with a document which is gobbledygook."?

and crooks:

"It surely can only point to the fact that that is exactly as they intended it to be - so unclear as to make it full of loopholes!"

There's only on way to find out...get them all on Harry Hill.


Harry Hill?

  • uptight61
  • 14/10/08 n/a (free)
  • a depositor
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  • Thu, 23/04/2009 - 08:42

Please explain.....


Impossible to explain 'Harry Hill"

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Thu, 23/04/2009 - 14:43

Unless you are familiar with the "So who's right? Well there's only one way to find out. Fight!" segment from the popular ITV show fronted by comedian "Harry Hill", normally on Saturday evenings (although schedules differ on the IoM, or so I am told)...

On reflection, should have posted in the "Well, you have to smile" section".


Cooks or Crooks, does it really make a difference?

  • klauseriksen
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 08:29

I doubt there would have been so much confusion had a scheme been presented that offered clear advantages to all depositors in an unambiguous language. The fact of the matter is that the IOMG and their SOA went from being viewed positively by many depositors (myself included) in its early days to the current view of deep scepticism largely due to the actions of the IOMG. Cooks or Crooks, the difference is really immaterial once food poisoning has been diagnosed.


SoA

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Thu, 23/04/2009 - 14:15

Klaus,
I agree with you. In the beginning I also had an open mind re the SoA. The interminable delays and very poor document had already influenced my thinking. The fact that the SoA is now likely to result in a reduction in my recovery rate has been the last straw.
I am not sure they are crooks. However they are incompetent or perhaps they just thought they could pull the wool over our eyes. In any case they wasted a lot of IOM tax payers money (IOM residents please note!) on consultants and lawyers fees. Of course they are not the only government to have done so!
Aren't politicians and civil servants great for consultants and lawyers.
Mike


I missed it too

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Wed, 22/04/2009 - 20:28

This is a very important point please could you affirm from where you got this information.


me too

  • insameboat
  • 12/10/08 31/05/09
  • a depositor
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  • Wed, 22/04/2009 - 21:20

I have requested clarification onseveral ocassions from the bank both telephonically and via email and received no response.


me too

  • Anonymous
  • Offline
  • Wed, 22/04/2009 - 22:08

I concluded on April 7 that scheme was poorly drafted in this area, because I could not understand it properly (also in respect of trusts with joing trustees). Your posting has made me look again and I find that I still cannot understand the treatment of joint accounts and joint trustees, nor do I understand how the voting works for these. The fault may be mine, rather than the drafting. In any event, I too am hoping to get it clarified.


Me as well

  • Julienne
  • 16/10/08 31/08/09
  • a depositor
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  • Thu, 23/04/2009 - 08:48

I am a joint holder and need to know the answer to this question.
I have seen many requests for clarification and to date no answer that I can understand.

I had faith in the SoA in the early days and was delighted the IOMT was doing something positive. Now I see it as a document designed to protect the smaller depositors who live and VOTE on the IOM and flawed in its writing so they can change the rules at any time and crawl out through any loophhole that we may have already seen or has yet to come to light.

I will be voting AGAINST IT


Julienne, See icecrushers

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 10:52

Julienne,

See icecrushers post at:-

http://chat.ksfiomdepositors.org/forum-topic/answer-query-concerned-son-...

This explains thet joint account holders will be treated as the would have under the DCS. ie joint account holders with a total of 50,000 deposited will receive 2 x 20,000 as the first SoA payment.


Julienne, See icecrushers

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 10:24

Julienne,

See icecrushers post at:-

http://chat.ksfiomdepositors.org/forum-topic/answer-query-concerned-son-...

This explains thet joint account holders will be treated as the would have under the DCS. ie joint account holders with a total of 50,000 deposited will receive 2 x 20,000 as the first SoA payment.


Re: Joint Account Holders

  • Anonymous
  • Offline
  • Wed, 22/04/2009 - 22:34

elgee, I too have re-read the latest publication of the SOA and must admit that I am concerned about the lack of a clear statement regarding the £50,000 maximum guarantee for each Joint Holder of the account. We are left to surmise that each joint holder is an eligible depositor because of the DCS but that is not good enough. I am a joint holder along with my wife and 2 children so I am counting on the £200,000 guarantee (4 x £50,000).

Unless I see something spelled out clearly in the SOA, the four of us will definitely throw our vote in with the DCS as it would ensure 100% back for us albeit a little slower.


@ Undone

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 23/04/2009 - 11:29

If you have a claim under either scheme amounting to £50,000 each then under the current projections for both schemes the DCS would pay you out 6 months quicker than SOA.
Its the SOA in your instance that is a little slower.