April figures out from JLs re KSFIOM

  • Gordon 45
  • 22/10/08 n/a (free)
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Posted: Tue, 11/05/2010 - 10:29

Hi Folks,

I see the main site is showing the data from the JLs for April. also on Bank website when I checked it out a few minutes ago.

Not had time to look at the figures in any detail, but two things spring out from JL's cover note

  1. Now quoting £205m as basis of returns from E&Y re KSFUK - it was £205m then appeared to become £229m based on their 2nd dividend, although our JLs were showing £233.5 in their 11.12.2009 figures - will check out and give my opinion.

  2. The good news is they are saying the 3rd dividend will be at least 10p/£ - I had suggested we could get 9.5p/£ in my table 8. So that is great news for all of us as it would bring returns up to 50p/£ (50%) of what the JLs call 100%. And we can expect this dividend in early July.

I will look at the figures and see what I can deduce and make a further partial update to my new Table 9.

Still need the quarterly fuller update that should be out soon according to the JL I spoke to in March. Still waiting on him contacting me for a chat, which he said he would have with me about 10 days ago. But I'm still hopeful he will get back in touch to answer my many questions on behalf of us all.

Anyway,

Take care,

Gordon 45

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11%

  • bellyup
  • 10/10/08 09/01/10
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  • Wed, 09/06/2010 - 19:42

11% at least to come next month.

This will take us to 51% .

Things looking a little brighter.


JL's

  • barrona
  • 17/11/08 31/05/09
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  • Mon, 31/05/2010 - 12:54

Do we have any comeback at all against the JLs as they seem to be treating depositors with such disdain?

They are supposed to be acting in our best interests but I have found their attitude to be increasingly tiresome.
The COI seem to be impotent insofar as their collective hands are tied with NDA.

Is there anything our legal team can do about the fact that the JLs very seldom seem to voluntarily disclose nformation without it being dragged out of them?


15million

  • bellyup
  • 10/10/08 09/01/10
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  • Wed, 09/06/2010 - 19:52

From the figures out today the JLs have noted 15 million in currency fluctuations .
From out point of view this is good as it will go a considerable way towards paying for the costs of Liquidation.

http://www.kaupthingsingers.co.im/Pages/2010/June/9June2010.asp


Hi bellyup

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Wed, 09/06/2010 - 20:28

Just on to say thanks for your two postings. Unfortunately I am unable to get on to the PWC/E&Y site tonight.

Thanks again,

Gordon 45


Thanks Gordon

  • tonycBrisbaneOz
  • 12/10/08 31/05/13
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  • Tue, 25/05/2010 - 10:22

Gordon,

Thanks for your hard work in deciphering whats coming out of the JLs

With regards the slowness of the JL reply perhaps it's worth reminding them who's putting bread on their tables.

Regards, TonyC


Thanks

  • jenren
  • 10/10/08 31/05/09
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  • Mon, 24/05/2010 - 13:10

Gordon and IceCrusher - I just want to thank you. I look forward to your comments and you really do help our family to get a grip on what is happening. Keep up the great work.
Many thanks from all of our family. Jen x


Divis...

  • chipmunk
  • 13/10/08 31/05/09
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  • Mon, 24/05/2010 - 08:55

Hi Gordon...Once again thanks for your total dedication to giving us the inputs we all desperately need.....I can't follow in depth but the bottom lines are what matters to me....Also Iceman...you two guys are just so incouraging.....anyway I'm a bit confused and without explaining why......because I will only confuse myself more...can you please tell me ....are we to expect a payout to us of 9.5% in July and a forcast of 5% in December, or do I have that wrong....?? Thanks for your advise and I hope your other troubles are now light.....theres so much pain in this world without the unwanted and uneeded additional pain Kaupthing have loaded onto us.

Very Best


Repayments from KSF UK - updated

  • IceCrusher
  • 14/10/08 25/10/11
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  • Sat, 22/05/2010 - 11:11

With best wishes to Gordon 45 who is bearing up under private and personal concerns; your tenacity to pursue the truth sets an example to us all. With many thanks and good luck, Ice.

Here follows my latest interpretation of what is happening to OUR money; where it is and who's doing what with it.

Capital reported in KSF UK: £557.1m
Repo shares: - £154.0m E&Y valued them at £154.0m; JLs at £136.0m, but sold them for only £120.5m
=£403.1m
Cash deposits (CDs): -£53.5m Repaid to KSIoM
= £349.6m
ISDA currency deposits: -£2.5m Repaid to KSIoM
=£347.1m

Compensate Repo: £185m - £154m = £31.0m E&Y declared shares worth £154m on day of default and is liable to pay compensation on difference, but have paid dividends on a value of only £21.0 (why?)
=£368.1m (adding the £21.0m ‘granted’ by E&Y)
Unsecured set-off: -£164.30m
Less interbank fees: -£0.63m
=£203.2m Cash on Deposit: returns based on KSF UK dividend payments subject to offset by sub-participations. In practise, PwC & E&Y have agreed to £205.0m ‘interim’ value.

KSF UK sub participation in KSIoM loans to Private Bank Book provides set-off against KSIoM’s claims against KSF UK. E&Y declared in their last report that the sub-participation has increased to £200.0m (due to interest and exchange rate differentials). (We previously used £164.3+0.63 fees)

This would result in £205.0m- (£200m-£164.3+0.63)

= £169.93m (E&Y limiting repo compensation to £21m instead £31m.)

However, it may follow that KSFIoM’s loans to KSF UK have also increased in value due to interest payments and exchange rate differentials and the account might be larger – the sums are highly susceptible to exchange movements – especially with the pound ‘s value so low at present.

The JLs state that the ‘agreed’ principal claim is £205.0m (which is a contradiction given that the compensation sum is in dispute). However, it appears that the JLs and the administrators of KSF UK have agreed to ‘fix’ this sum pending resolution of claims. The figure itself comes from the original £185.0m (£184.7m) cash sum held as an unsecured KSF UK deposit, to which has been added £21.0m of the £31.0m claimed in compensation against the repo shares. (£21.0m limit imposed by KSF UK).

According to the JLs latest web report they’ve now received three dividends from KSF UK totalling £71.75m which represents 35% of £205.0m. The problem is, in their previous report these bright sparks calculated the second dividend from KSF UK based on a capital sum of £229.0m and at the given rate of 10% this indicates a receipt of £22.9m (instead of £20.5m). They over-stated the second dividend payment by £2.4m.

The very first dividend you’ll recall was £41.0m so the total sum of their claimed first two dividends would come to £41.0m + £22.9m = £63.9m. However, in their latest report they’ve realised their mistake and thereby present their case as a total of three dividends representing 35% of £205.0m. You can see that had the JLs reported the amount received from KSF UK back in March they would have been obliged to state a dividend receipt of £7.85m.
(£71.75m-£63.9m) leaving creditors to ask: ‘how does 5% of £205.0m make £7.85m?’

1st dividend: 20% of £205.0m = £41.0m
2nd dividend: 10% of £229.0m = £22.9m (Overstated claim by JLs)
3rd dividend: 5% of £205.0m = £10.25m less the overstated claim amount of £2.4m from second dividend
= £7.85m (£7.85m/£205.0m = 3.83%)

The JLs argue that the default value of the collateral shares used in the repo agreement was £136.0m and not the £154.0m declared by E&Y – hardly surprising when the former only managed to get £120.5m for those shares. The JLs claim that the compensation sum is the original repo loan of £185.0m less £137.60m = £47.4m. This would be added to the unsecured cash deposit of £185.0m making £232.4m on which to pay the dividend. But as we see, E&Y are adding only £21.0m and we are therefore receiving smaller dividends on the lesser total of £205.0m

The shares were intended to (more than) cover a loan of £185.0m to KSF UK, but eventually realised only £120.5m – that’s a loss to us of £64,500,000 – a huge loss. Then, instead of getting full compensation from the difference in value between realised monies and the original loan, we are getting only what E&Y assert is their valuation - which should at least be £31.0m (£185.0m less £154.0m) but instead they are counting only £21m whilst our (powerless) JLs have argued hopelessly for the past 1.5 years for compensation of £47.4m. Worse still, under the repo agreement, this compensation should be paid in full, but because KSF UK is under administration, E&Y claim that they need pay dividends only on the compensation sum – not the full amount as in any normal secured creditor loan. Even Doherty made mention of this parlous situation in his evidence to the IoM Select Committee, but still we get nowhere with this. (Who is pursuing this angle?)

This fiscal fiasco is costing us tens of millions of pounds and PwC are simply not pulling their weight; they failed to claim a default against KSF UK for the repo share money (and so lost KSFIoM the right to declare the shares' value). E&Y administrators claimed the default against KSIoM instead – so obtaining the right to declare the shares’ value and claimed ‘high’ to reduce their compensation payments. On top of that, they are paying only a dividend of the claim instead of 100% as defined in the repo agreement for a secured creditor.

E&Y administrators are running rings around Spratt and Simpson and all the latter can say is that “…we are still negotiating for a higher claim”. One and a half years have passed and they have not achieved agreement yet, so we can imagine that E&Y will hold out for as long as it suits them (until the JLs get tired of asking and the depositors forget). £64.5m has been lost to us and no-one has anything to say about it; the JLS ignore any requests for explanation and will not say why they cannot oblige E&Y to pay the proper dues. What is the point of having a CoI when they are hog-tied to say or do nothing?

Ice


To the Ice Man

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Sat, 22/05/2010 - 19:15

Hi There Ice,

Thanks for your nice comments, as you know I have had other things to deal with, even more important than our KSFIOM situation, but things are once more on the up.

Your latest scenario is bang on my friend and is worrying as we need to have belief and have confidence in our JLs and it was obvious things were not right when they did not inform us of how much they received in the 3rd dividend from E&Y on behalf of KSFUK. Then when we saw £71.750m in total instead of the net amount for the 3rd dividend you know they have changed the format of reporting once more to hide the true facts.

As I have said before Icecrusher is far better than me on the whole repo share situation and is totally correct in what he says. I have done work on the April data and conversed with Icecrusher but could not finalise my thoughts and joint questions due to my own family situation - now resolved thankfully. So will now finish off my thoughts on the April figures. Could not help Ice when asked, for reason stated above, but he did not need me anyway, once again his finger is on the pulse, and so correct.

Although I have not been on the DAG as I would have wished recently, I have still been collating my 4 lists of questions that I have sent our JLs since early March through to May. This combined list is 90% done now and will be sent to-morrow to the JLs. I had hoped to speak with one of them by now, but by the time he came back to me it was impossible for me to chat on the day given. I did inform him why and he understood immediately. I now hope to speak with him in the coming week and I will inform you all of all questions that I try to put forward and his replies if any.

Once I chat with him, I will take the April figures - that are the best this year so far and update my Table8 (now draft Table 9). I will also update the info for the 3rd dividend ex E&Y and put in the 4th dividend at 5p/£ due from them in late July. I will also put in a 5th dividend from E&Y for Dec, as I think they will have the cash to pay a 5th dividend of 5p/£ at that time. And base these dividends on the £205m. I will also update my draft Table No.9 to allow for 65% return from E&Y and the number of dividends that means. I have taken all dividends expected from E&Y at 5p/£ from their number 3 onwards and this seems pretty near what we are getting at this point.

We just need to see the returns on our own loan book increasing like those received back in April throughout 2010, both for those loans due back in 2010 and hopefully more returns received early from 2011-2016 and that is thanks to the hard work by the JLs and their team..

Apologies for the delay in getting my figures out to all of you, but they will be out soon, along with Table No. 9 once we get the fuller update. The good thing is by early July 50% of our cash back (albeit based on the 100% as seen by the JLS and IOM government). But a lot better than Zero.

Again to all,

take care,

Gordon 45


Thank you both

  • peter and louise
  • 18/10/08 01/09/09
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  • Sun, 23/05/2010 - 07:53

Thank you both, Gordon and Ice, for all your hard work to get to the bottom of what is going on and for disentangling it all for us and providing such clear explanations. (Sorry to hear Gordon that you have had other difficulties, on top of everything else. I hope whatever the problems were, they become a thing of the past very quickly). Best Wishes to both of you.


Interest Rate

  • JS
  • 10/10/08 31/05/09
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  • Thu, 13/05/2010 - 05:38

Hey, The bank is currently holding around GBP120million. It's got a deal rate (=interest rate I presume?), on average, of 0.3% (some banks are at 0.2%). I'm no expert, but those rates are pish poor. Can anyone explain this?


@JS on interest rates

  • expat
  • 10/10/08 31/05/09
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  • Fri, 14/05/2010 - 07:01

The world is generally in recession, so governments and/or Central banks lower interest rates, in this case to practically zero. Unemploymet, bankrupcies etc are still very high and the worlds economy, although recovering in some cases, is still in a parlous state. So the reason that interest rates are low is that they need to encourage people to increase the money supply i.e. spend. So they make it cheap to borrow money and make it not worth your while saving it. Hence very low interest rates.

When you spend you create demand, demand creates a task, many tasks create a job and the merry go round starts to work again. In other words if you have money you buy two loaves of bread and increase the bakers business and create a job. It's basic Keynesian demand economics and it's why interest rates are considered (arguably) the way to control the money supply and inflation, and why by spending huge sums of government money on "projects" you slowly reflate an economy, you create jobs in a recession. So by increasing the money supply it creates work, demand. To increase that flow of money interest rates are lowered, and on this occassion it has been internationally co-ordinated (well sort of!).

Hope that is as clear as mud!!!!!


Interest rates+

  • bellyup
  • 10/10/08 09/01/10
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  • Thu, 13/05/2010 - 16:08

I saw this too they are so low for such vast sums of money.
I can only imagine that they are safe !

From these figures it looks like the interest wont even cover the JL 's charges which will be no doubt astronomical.


Can anyone explain the extent of KSFIOM's exposure to KSFUK

  • hopeful
  • 11/10/08 31/05/09
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  • Wed, 12/05/2010 - 19:10

First of all thanks a lot for all your hard work Gordon in reporting on the figures. I remember in the early days that a figure of about 557k was thought to be deposited with KSFUK. Based on Gordon's latest comments a 205k final return on 557k would only represent 37% recovery. However I believe that the final return expected from KSFUK is a lot more than 37% therefore the 557k figure must have been misquoted.

Can anyone therefore explain in relatively simple terms the actual amount that KSFIOM had deposited with KSFUK back in October 2008.


Hi hopeful, not that simple,

  • IceCrusher
  • 14/10/08 25/10/11
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  • Wed, 12/05/2010 - 19:50

Hi hopeful, not that simple, but here's the process:

SIMPLE SUMS HARD QUESTIONS (Previous assessment based on earlier JL numbers)

How an alleged £557M 'frozen' in KSF UK ended up with a UK first distribution of £41M

1.)Total monies invested in UK: £557.1m
2.)Less 'secured' collateral shares: £154.0m (post UK E&Y – 1st bought for £185m)
3.)Less secured Certificates of Deposit: £53.5m (incl. interest, all recovered)
Sub-total: £349.6m
4.)Less set-off (UK lent to IoM loan book): £164.3m
5.)Less Inter-company fees: £0.63m
Leaves unsecured interbank deposits of:£184.7m (originally £175m)

'Readjusted' PwC collateral share value £136.0m (from Report to Creditors)
Total of secured & unsecured assets £320.7m (£184.7m + £136m)
UK payment for share loss (disputed) £21.0m (but £185m - £154 = £31m!!!!!!)
UK principal capital (184.7 + 21.0) ~ £205.0m

At 20% first dividend payment = £41.0m (£21m 'secured' reduced by 20% !!)

How the JLs got from £557m to £572.1m in their report of 11/12/09

1.Repurchase sum of the Repo Shares £185.0m
2.Quoted value of shares by E&Y £154.0m (previous JL report)
3.Difference = compensation sum £31.0m (PwC made this £21m??)
4.Add compensation to the £557.1 £588.1m
5.Add the ISDA currency deposits £2.5m (not previously accounted)
6.Total £590.6m
7.Subtract the undervaluation of CDs -£18.5m (PwC used £35m vice £53.5m)
8.Revised total £572.1m (Fits their report, but wrong because the value of the CDs is incorrect!)
9.The correct total should be: £590.6m

Less the correct value of CDs £53.5m (with interest)
£ 537.1m
Less set-off & fees £165.6m (Note increased fees of £1.3m) £371.5m

From £371.5m subtract the quoted value (E&Y) of the collateral shares (£154m) – but note in
their report, our JLs deducted their chosen value of the shares (£138m) thus making the capital sum held by KSF UK = £233.5m; regrettably, this is not the sum on which KSF UK have paid dividends to date (it has only been £205.0m)

Subtracting the E&Y quoted share value of £154.0m and the value of currency deposits of £2.5m
leaves £215.0m
Less Compensation of £31.0m @ 100% = £184.0m

Unsecured deposits of £184.0m @ (say) 65% = £120.0m

plus compensation @ 100% = £31.0m
or, plus £31.0m @ (say) 65% = £20.0m (if E&Y won't pay i.a.w repo agreement)

FINAL KSF UK RETURN = £151.0m (or £140.0m)

Kaupthing Singer & Friedlander Limited (in Administration)
Administrators’ Progress Report to creditors for the six month period from 8 October 2009 to 7 April 2010
27 April 2010

Private Banking

Sub participations – KSFIoM [was] 167m [now] 200m

Currently comprising in 26% of the total Private Banking loan book, KSF has sub-participated in loans advanced by KSFIoM. These sub-participations are ‘silent’ in that KSFIoM is the lender of record. KSF has not advanced any further funds in respect of sub-participated positions, but the balance outstanding has increased by c.£33m due to interest accruals and foreign exchange fluctuations. The sub-participations will represent a claim for KSF against KSFIOM which will be subject to mandatory set-off against the claim submitted in the administration by KSFIOM.

Sorry about formatting, it was too difficult to transcribe, send me an email to get full colour, aligned version!
Ice


Thanks Ice

  • hopeful
  • 11/10/08 31/05/09
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  • Thu, 13/05/2010 - 16:15

I'm not a banker so I will not pretend to fully understand these complicated figures that you have kindly put together.

If I can ignore the detail for a minute it seems to me that KSFIOM's actual cash exposure to KSFUK is considerably less than the original 557k. I suspose therefore this is one of the reasons why the final recovery estimates from KSFIOM have increased from those estimates that were suggested at the start of this mess.

As you say its certainly not a simple situation. Thanks again and I hope you are keeping well.


Returns

  • Anonymous
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  • Tue, 11/05/2010 - 10:46

Hi

Can anyone tell me when it may be likely that us guys that were paid under DCS group WHO still have funds owing might get anymore back please!

Thank You

Aurora!


@aurora

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 11/05/2010 - 12:47

Hi,

It depends on how much your deposit was. The DCS receive the dividends from the Liquidation on your behalf and retain them until they have recovered the £50k paid out to you in compensation. Once that is recovered, further dividends are passed to you as and when received from the JLs.

Since the present cumulative dividend is 40p in the £, depositors with over £125k should already have received additional funds in this way (since the £50k compensation represents less than 40% of their deposit). The next dividend (to be paid in early July) is expected to be at least 10p in the £, bringing the total recovery to date to at least 50%. Depositors with between £100k (or maybe less if the dividend is higher) and £125k should begin to receive funds from the Liquidation at this point.

Hope that helps.


@ anrigaut

  • icdbrazil
  • 10/10/08 30/11/09
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  • Wed, 26/05/2010 - 13:37

Many thanks for clarification, and all your continued efforts.

Thanks also to Gordon 45 and Ice.... great work, beyond most of us!


Anrigaut

  • Anonymous
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  • Tue, 11/05/2010 - 13:43

Thank you

for this information we have waited so long.. with a little help from our friends in the IOM Treasury Office..

So hopefully July then at last something!..

Once again thanks for your Help!

Aurora..