Brief Thoughts on the SL's Oct-Dec 2015 Data

  • Gordon 45
  • 22/10/08 n/a (free)
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Posted: Thu, 21/01/2016 - 21:37

Hi Folks,

My Latest Thoughts after taking into account the JLs Oct – Dec 2015 Figures - you may not agree with me

  1. Not a great report from our viewpoint, but another loan repaid (£120k), leaving only 4 loans to go. Total of £212k received from loan repayments/interest and other income. ‘Write offs’ rose by another £453k, so we are slowly getting there with the loan book. Another £130k paid out in ‘catch up’ payments, Returns for Jan - Dec 2015 were £8.3m approx. My data is based on GBP, apologies to my DAG Colleagues who invested in other currencies. So still very little movement in ‘Unresolved’ & ‘Unclaimed’ – that’s disappointing. Nothing new in Kaupthing hf re PG, nothing new on Litigation outwith loans due and it seems no further forward re payment of ‘contractual interest’. So we wait the January ‘6 monthly’ progress Report and hope for more data there.

  2. Sole liquidator saying approx £120k received in full and final settlement of 1 loan and £453k written off after a lengthy legal process. Remaining 4 loans due total £8.437m as at 31.12.2015.

  3. FX Returns for Jan – Dec 2015 still showing +£12.6m. Starting figure for Jan 16 is +£12.6m, Jan15 was +£13.1m, Jan 2014 was +£14.2m, Jan 2013 was +£13.2m and Jan 2012 was +£15.2m.

  4. ‘Unresolved’ around £2.384m + the £1.500m ‘Unclaimed’ = £3.884m at end of Dec 2015. I had hoped for more movement in the remaining ‘Unresolved’ total in this quarter.

  5. Liquidation costs – Liquidation and other fees for this year comes to £0.540m

  6. The ‘write off’ situation increased by £0.453m in this quarter, and now stands at £12.6m. The SL has still to deal with the remaining 4 Facilities. SL said in July progress report that he hoped for between another £3.9m-£7m more from the loan book. He has brought in another £5.812m, which is tremendous in my view.

  7. The ‘set off’ situation no change, currently £15.2m.

  8. Re the PG – The Icelandic Government stated that all parties had to accept a ‘haircut’ of 39% in order for things to progress. Or the ‘Estates’ would go into Bankruptcy and pay a 39% tax. Appears that the three Banks, as was - Landsbanki, Glitner & Kaupthing hf have all agreed to the above ‘haircut’. On 23.12.2015 Anrigaut reported that ‘The Composition Agreement of Kaupthing hf., which was confirmed by the District Court of Reykjavik on 15 December 2015, had at 23 December 2015, become final and binding under Icelandic law. The Effective Date of the Composition Agreement is therefore 23 December 2015.’

‘Kaupthing will make a further announcement once it receives the relevant exemptions from the Central Bank of Iceland to permit it to make distributions in accordance with the Composition Agreement.’ No word yet.

Hopefully once this announcement has been made our SL is one step nearer to selling off the PG to a Third Party, once he agrees amount due in interest from the WuC. Our JLs/SL did state in the July 2015 Progress Report that the value of any claim (based on our dividend now being at 100%) would be small. And also once the claim has been agreed it is possible that it will be sold rather than held until the conclusion of the Icelandic Insolvency Process.

  1. As at end of Dec 2015 data, 4 Loans still due totalling £8.437m. The one loan repaid plus ‘write offs’ came from the last remaining loan due in USD. So the remaining 4 loans cover GBP (14.7%), Euros (57.9%) and Swiss Francs (27.2%).

  2. The SL stated in the July 2015 Progress Report that the Liquidation might end in around 18 months – dependent upon the loan Book & PG situation, that, to me, would be great news. Let’s see what the January Progress Report says (hopefully out around mid Feb).

  3. Think we have an approx net £9.815m towards interest payments to Creditors as at 31.12.2015, after allowing for Liquidation fees (so far), and the remaining ‘Unresolved and ‘Unclaimed’ claims. If no more cash comes in we will continue to incur Liquidation Expenses plus other fees thus lowering any amount available for distribution. Not sure how much more we can expect back from the remaining £8.437m still due from the loan book.

As said in my previous updates we need 0.4% or around £3.5m to pay the initial contractual interest.
Creditors entitled to contractual interest in excess of 5% would receive the amount due in excess of 5% up to the 8.10.2008. Creditors not entitled to contractual interest would receive 4% on amounts owed up to 8.10.2008. This amount would be small as the relevant creditors are typically trade creditors; the total value of such claims is low. Once the above two steps have been completed all creditors will have received their interest entitlements up to 8.10.2008. In respect of further interest payments, JLs (as was) applied to the Court to seek directions on the calculation methodology – as per January 2015 Progress report). Some complications had arisen over the IOMG Early Payments Schemes and that is holding back a decision – this information is thanks to Knife Edge. As per the Sept 2015 Quarterly Report no decision has yet been made by the Manx Court. A further complication arose and the Court date was put back to 28th January 2016 (thanks for the info Anrigaut). Website to be updated once position clarified.

‘All Creditors would’ (then) ‘receive interest at 4% pa’. ‘Paying this interest to creditors could amount to up to £36.2m per annum, but would of course be limited by the extent to which cash was available’. Quoted data taken from JLs info in January 2013 update. Currently may have approx £6.315m towards this.

I also noted in the JLs January & July 2015 Progress reports that it was intended that one further dividend would be paid to creditors in respect of each class of interest. Timing and amount would depend on realisation of remaining assets. To me that meant Loan Book, PG and Litigation. The SL re-iterated this saying – it is intended that that a distribution will be made at the end of the Liquidation when all assets have been recovered. I take it the SL is hoping to get everything finalised to allow any payment to be made through one dividend, whenever that may be.

There has been a lot of discussion regarding Life Insurance Policies (Bondholders). Thanks to a lot of hard work by Anrigaut and Knife Edge the SL became involved. He has now issued further very helpful information on 3.12.2015 that hopefully gives an avenue for Bondholders to pursue with their individual Life Companies re ongoing payments by individuals to the Life Companies and perhaps the closure of Bonds and any further Dividends issued by the SL direct to these Bondholders.

So we are getting there, but the SL he must continue to push forward and finalise the loan book quickly (one way or the other), resolve the ‘Unresolved’, deal with the PG and look at and finalise any Litigation outwith the loan book as soon as possible to end this Liquidation as quickly as he can. Perhaps we will hear more on the above in the ‘6 monthly report’ due as at 9th January 2016 (probably issued late Jan/early Feb).

As always take care,

And God Bless,

Gordon 45

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Latest Report

  • Blades
  • 19/10/08 n/a (free)
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  • Sun, 31/01/2016 - 00:46

Thank you Gordon, your analysis is always very welcome.

Re 'Brief thoughts ...'

  • anrigaut
  • 19/10/08 30/10/09
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  • Thu, 21/01/2016 - 22:44

Thanks Gordon for your, as usual, excellent summary.

I would just add a couple of clarifications:

Re point 1: " ... it seems no further forward re payment of ‘contractual interest’."

This is because we still await a ruling from the IOM Court, without which nothing can progress. The Court hearing has now been adjourned an incredible 4 times (if I count well), with the next hearing scheduled for 28 January. I understand that Mike Simpson has made it very clear that he will oppose any further request for adjournment. So fingers crossed ...

Re point 8: "‘Kaupthing will make a further announcement once it receives the relevant exemptions from the Central Bank of Iceland to permit it to make distributions in accordance with the Composition Agreement.’ No word yet."

The final exemption which will permit Kaupthing to proceed with the implementation of the Composition Agreement was granted by the Central Bank of Iceland on 15 January and announced the same day on Kaupthing's website:

Thank you

  • sambururob
  • 10/10/08 n/a (free)
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  • Fri, 22/01/2016 - 14:35

Thank you to Gordon and Anrigaut for these reminders that there is still hope for another dividend. It seems that the IoM court system is grossly inept compared to that of Iceland or perhaps it is just that there is more nepotism and snouts in the trough in the IoM.