BOND HOLDERS AND 65% MISINFORMATION

  • Diver
  • 11/10/08 31/05/09
  • a depositor
  • Offline
Posted: Thu, 05/02/2009 - 13:30

As stated on another thread, I passed a communication, from a life company to one of our bondholders, over to John Spellman of the IoM Treasury for clarification as I believed the information to be incorrect. Below is his reply amongst the original comments from the life company. I hope this clarrifies/confirms a few things for everyone.

I have seen the latest updates on the Skandia website so am aware of the proposed Scheme of Arrangement and of the EPS.

As I do not understand the SoA Lump Sums v %'s could you please answer the following questions in addition to my queries over EPS:-

  1. When will the 1000 EPS arrive in my cash account?
  2. Will Skandia be elligible to apply for the 10,000 EPS if this is passed by Tynwald?
  3. Under the SoA how much of my 20,000 will I get back?
  4. How long will it take to get this back?
  5. If the DCS is triggered how much of the one off payment to Skandia will I receive?
  6. What if anything has/is Skandia doing to recover the 63 million pounds of 600 investors money?

Dear XXX
Thank you for your e-mail

  1. The payment should be applied to your bond shortly, as you can appreciate we have 300 clients who were invested in KSF and it would be impossible to make all the payments immediately.

JS: No Comment as this is up to the life companies.

  1. We understand that our bondholders will be entitled to the 10,000.00 proposed by Treasury and which will be discussed at the next sitting of the Isle of Man Government.

JS: The improved EPS is intended to provide for each designated bond (which is can be identified as such) to receive up to 10k. The details are currently being worked upon.

  1. Under the proposed SOA you should receive 65% of your 20,000.00. The percentage could increase if any further assets were retrieved after the SOA was implemented.

JS: The 65% is an illustration but broadly correct.

  1. Below is the proposed timetable

Total returned

3 months after scheme takes effect 12.5% of KSFIOM investment returned 12.5%
12 months after scheme takes effect A further 7.5% of KSFIOM investment returned 20%
24 months after scheme takes effect A further 15% of KSFIOM investment returned 35%
24 months+ after scheme takes effect A further 30% of KSFIOM investment returned 65%

A provisional timetable has been laid out stating that all legal issues could be resolved by the end of February, with the court petitioned in March. This would allow a scheme meeting to be called in April and held in May, with the scheme consequently taking effect late May / early June and payments commencing in July.

JS: Correct.

  1. If the DCS was triggered you would get back the same amount but, it would take longer to make the payments and there would be no possibility of getting any further payments should any additional assets be retrieved.

JS: This is not correct. All assets are returned to the LP or SOA (less compensation claims paid) to depositors
after liquidation costs are paid i.e. if 80p is recovered this is how much they get.

  1. Royal Skandia supported the application for the adjournment but made it clear via its legal representative in Court that this did not necessarily imply our agreement to all the proposed terms of such a scheme. In particular we made it clear that we intended to be proactive in shaping the terms of the proposed Scheme of Arrangement and would lobby the Isle of Man Government vigorously to ensure that the proposed payment schedule would be enhanced so that a greater amount would be payable within the specified two-year timetable.

JS: This is correct and that is what they are doing.

I hope this clarifies the situation for you. Please do keep checking our website, www.royalskandia.com, for updates and if you have any queries call me on the number given below.
Regards,

XXXXXXX

Customer Helpdesk

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Bond Holder

  • Grahame
  • 11/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 07/02/2009 - 17:30

I have heard nothing at all on this subject from Norwich Union. This does not surprise me as I do not believe anybody at NU has the ability to write! Their communication abilities leave a lot to be desired. Are there any other NU bond holders out there that are getting totally fed up with this Company? If so, what can we do about it?


Others out there

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
  • Offline
  • Sat, 07/02/2009 - 18:03

If you have not already, then there are 2 groups that you may wish to join. If you go to the top of the page, there is a button for 'Groups', click on this and it shows all the groups within this site. The 2 relevant might be 'Bonds' and 'Norwich Union', at the right hand side of each entry for a group is a 'Join' button.


Bonds

  • Kevin Platt
  • 20/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 05/02/2009 - 16:56

Does this information apply only to Royal Skandia bonds or are all insurance companies pooling their resources?

We keep getting explanations but often there are so many unknowns so as to make the explanation useless. For example, does a joint account pay double?

At what point will the bond companies tell us what they are voting for? Are they expecting 65% or are they arguing for 100% of depositors money back.
For certain, if they allow their depositors to get less than others they will have some very unhappy customers looking for legal redress.


65% after 2 years, was that the lure of SoA?!

  • cypheath
  • 01/11/08 30/10/09
  • a depositor
  • Offline
  • Sun, 08/02/2009 - 09:56

Sorry folks, I still don't understand how this can be the case under the above "proposed timetable" It clearly states 35% at 24 months with another 30% in 24+ months.

To me 24+ could be anytime after July 2011 (assuming start date July 2009) until whenever.
Am I being picky or is it just another misunderstanding?!?

Has anybody got any answers/thoughts on suggested 65% to all within 2 years given the above time table from Skandia and my earlier comment above.


Bondholders under enhanced early payment scheme

  • gazfuk
  • 12/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 05/02/2009 - 15:20

This is very disappointing.

As I understood it individuals would qualify for £1,000 under the current EPS, so my wife and I with a joint bond would get £2,000. This led me to believe that if the EPS was 'beefed up' to £10,000, bondholders in a joint bond would get £20,000 as an early payment. According to the statement above, this is incorrect and the EPS will pay "per bond".


Bondholders under enhanced early payment scheme

  • gazfuk
  • 12/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 05/02/2009 - 15:20

This is very disappointing.

As I understood it individuals would qualify for £1,000 under the current EPS, so my wife and I with a joint bond would get £2,000. This led me to believe that if the EPS was 'beefed up' to £10,000, bondholders in a joint bond would get £20,000 as an early payment. According to the statement above, this is incorrect and the EPS will pay "per bond".


Thank you Diver

  • TheThurloSquire
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 05/02/2009 - 13:42

Thank you Diver this is very helpful in claryfying the position for Bond holders.