Clarification of terms and options
I know there will be a huge sigh of exasperation at the very least by many people who will read this posting but, I am posting it anyway. I don't have enough time to read through everything and if I don't keep up on a daily basis, I feel lost and that's where I am just now.
Here goes: I don't know what is meant by 'protected' and 'partially protected' or indeed there may also be 'non-protected depositors' - can somebody explain with simple examples what these terms mean please?
2ndly: What does DST stand for?
3rdly: HNW = 'High net worth' I assume - or for this blog, depositors of greater than ........... how much?
4thly: We are being asked to make a decision about who represents us and have a choice of 3 HNWs and 1 non-HNW individual as I see it. What exactly are we voting for? When I tried a couple of times to read up about these candidates via a link, I didn't reach a biography or the likes simply the new website but no link to biographies.
5thly: Is it possible to have some suggestions about what my options are being a depositor with both a sterling and a euro account. I have/had about 60K in sterling and 80+K in my euro account. I have not applied for an EPS or the DCS because I feel I may be better to wait - but, am I? I never see anything on this site nowadays that relates to people like me ie. with euro accounts or advise/suggestions about what we should do. Months ago there were postings that if/when we are paid out, our non sterling accounts would be converted to sterling at the exchange rate on 8th October 08. Is that still the understanding?
Finally: What has happened regarding changing the liquidator - has any decision been made?
Boy, am I glad I'm in a far away, hard to get into country as I can already feel people's exasperated screams of "What, somebody who doesn't know what's going on despite everything we've said and done for them"!!!!!!!!!!!!!!
Phew!
@ Brennajm
Many people are confused as to what is what .
Your post has elicited a concise and informative reply.
@brennajm
There's an e-mail winging itself to you but I now see there is a response to your queries below!!
Re Clarification of terms & options
brenajm,
A few quick replies to start you off:
A protected depositor is one who will be fully paid out (except possibly interest since 9 October - still under discussion) by the DCS. For a retail depositor this means someone with up to £50,000 (or £100,000 for a joint account in two names). A partially protected depositor is one with over £50,000, who will be eligible for a 'top-up' payment up to that amount if the liquidation yields less than that. In practice, the £50,000 will be paid up front and then recovered by the DCS if, in the event, it turns out that you were not eligible because you would be getting more than that from the liquidation alone.
DST - DAG Strategy Team
Yes, HNW = High Net Worth, but I know of no definition (except that it is clearly more than £50,000). There is a group within (some would say without?) DAG who call themselves the HNW group. But - however it is defined - there are clearly a fair number of HNW individuals who do do belong to this group, including in the DST.
No: as of today, the DST have proposed 3 candidates (all are HNW) and the HNW-group have proposed another 3 (the deadline for nominations is 1 July). The CV's are on the bank website at http://www.kaupthingsingers.co.uk/Pages/4133
The DST candidates are Stuart Roberts (podather), Simon Bessant (knife edge) and Alex Marsella (amar). The HNW-group candidates are Gavin Brake (hopper), Nigel Smith (frog) and Peter Wakeham (?). There are also other (non-DAG) candidates, including one life company (axa) and a non-depositor creditor (for the Singer & Friedlander pension fund). I guess there will also be the FSC and who knows who/what else from ... The maximum number on the committee is expected to be 7 (this has to be voted at the meeting). It is not clear exactly how the vote will be carried out - this will only become clear at the meeting - hence the need to give a proxy vote.
The date for currency conversion is 27 May 2009 (date of liquidation). There's a list somewhere of the rates to be used, but I forget where (I have sterling accounts only). Whether you apply now (before 4 July) for DCS is up to you. If you wait, you can vote (provided you send in the proof of debt and proxy forms by 3 July - details on the DAG public site), but you may have to wait a little longer for your first DCS pay-out; we are assured (for what it's worth ?) that it won't delay things by much - but only you can decide. The first dividend from liquidation should be paid soon and will be at least 14.5%, with more expected around the end of the year. If you have around £140,000, you will almost certainly get £50,000 back sooner by applying for the DCS (whether you apply immediately or after the voting), but in the long run you will not get more unless liquidation yields less than 36% (which would be a real catastrophy!).
Finally: no, the question of the liquidator will be the subject of a vote at the creditors' meeting on 7 July. The position of the two DAG groups on this has not yet been made clear - hopefully it will be in the next day or two.
`
Hope this helps a little. Others can correct me if I've got something wrong.
Good luck!
Clarification of terms & options 2
Thank you anrigaut and everyone who responded so positively to my request last night. I am now much better informed and can, and had better, quickly fill out the necessary forms and get them off to the IOM.
Best of luck to all of us and thank you to all the people who are stepping up to the plate at this crucial time.
correction of typo
Hi folks,
Just noticed a small typo in my post above (too late to edit). I guess it was clear anyway, but just to be sure, in point 3 the last sentence should read "...there are clearly a fair number of HNW individuals who do NOT belong to this [the HNW-] group, including in the DST."
Very well done
Very well done Anrigaut !
I am sure this will be helpful to a lot of people .
Further clarification please
Emboldened by the clarification question and the thoughtful and helpful answers it has elicited I am moved to ask:
Does everyone get treated the same once the DCS, liquidation decisions are voted upon and made?
Is it possible that a liquidation voter may eventually get a greater percentage of their money back than someone who opted for DCS or vice versa?
Do the decisions of the creditors committee apply to all?
Sorry if this is simplistic or stupid, but as a teacher by profession I always tell students to ask, as normally most of the class do not understand either but did not dare ask!!!
Examples of payout under the DCS & FAQ's
Examples here:
https://www.dcs.im/dcs/dcs.nsf/ExamplesIndex
Frequently Asked Questions (but not all of them!) here:
https://www.dcs.im/dcs/dcs.nsf/FAQs
payout
It is 'my' understanding that we will all ultimately receive the same payout albeit in differing amounts and time-scales depending on how we claim.
Those that claim via DCS will receive up to 50,000 per investor (dependant on how much you had deposited) as an initial payment whereas those claiming directly via Liquidation will receive 14.5% of the amount they had invested.
The next payment from the Liquidator (possibly 10%) (don't know when) will go directly to the Scheme Manager of the DCS to recover what they have paid out to depositors already under the DCS Scheme and if there is any balance that will be forwarded to the depositor, whereas those claiming directly under Liquidation will be sent this payment directly.
This will continue until the money is exhausted.
payout
shellshocked: we are getting contradictory signals from IoM about this matter. I think the following is the most likely scenario, (with caveats and certain alternatives). The first dividend from liquidation is expected to be 14.5p inthe pound, rather than 10. For those who have not claimed DCS or EPS, they will get 14.5p in the pound of their whole deposits. For those who have claimed EPS but not DCS, they MAY get 14.5p less 14.5% of whatever they claimed from EPS or possibly less ALL that they claimed from EPS (there is a highly ambiguous bit of drafting associated with EPS2 assignment, which puts this matter in question and EC has not yet started looking atthis issue). For those who have claimed DCS, the DCS will get 14.5% of their whole deposit and take whatever DCS has paid by that time (probably nothing) and whatever EPS has paid previously (which will be returned by DCS to the IOMT) and the difference if any returned to the claimant. As for DCS's costs of recovery, for those who have 50k or less on deposit, there should be no costs taken from claimant by DCS and for those who have more than £50k, this SHOULD also be the case but again there is an ambiguous bit of drafting (this time in the DCS regulations) which put this matter (arguably) into question. SO far EC has been told by FSC that there should be no recovery costs taken from DCS claimants.
You would think that this would all be easy to sort out and get exact answers on, but it is proving to be very slow and answers are inexact andcontradicted by other documents put out by FSC and its scheme managers and press statements by IOMT and others.
Elgee
I was hoping you would reply. I love reading your postings, they never fail to clear things up for me. I rarely post but I often read. Thank you.
payout
Further to my posting above, here is the most recent word from DCS about these matters, contained in an email to EC (which was posted on website when it appearedm and is still there):
From: KPMG_Admin/KPMG(?)dcs [dot] im [mailto:KPMG_Admin/KPMG(?)dcs [dot] im]
Sent: Wed 17/06/2009 19:30
To: David Greene
Cc: Alan L. Gough; Dominic de Bono; info(?)dcs [dot] im; IOM - John Spellman Dir Fin Serv Spellman; Fayle, Michael
Subject: Re: Kaupthing Singer & Friedlander (Isle of Man) Ltd - In Liquidation [EDWIN COE LLP-MAIN.FID211622]
Mr Greene
Re: Kaupthing Singer & Friedlander (Isle of Man) Limited (“KSF”)
Financial Supervision Commission (“the Commission”)
Depositors Compensation Scheme (“DCS”)
Thank you for your email of the 11th June 2009.
Firstly, I can confirm for the avoidance of doubt that it is the expressed and current intention of the Scheme Manager to pay either the full £50,000.00 or £20,000.00 as applicable by making one payment within 3 months of the date of default. As you will appreciate, the ability to pay in this manner is not within the immediate gift of the Scheme Manager but we remain hopeful that this can be achieved. We suggest that depositors visit the DCS website from time to time and we will post any material updates to this issue as soon as we are able.
I note your proposition that the Regulation is not as clear as I stated. I also note your comments in relation to the meaning of “liability” and the effect of the regulations; however, as I indicated in my earlier correspondence the Scheme Manager’s position remains that for a claimant to claim in the DCS the claimant must assign all rights. The assignments contained in the claim form reflect this position.
As we have already indicated, I confirm that the Scheme Manager intends to ask the liquidator to re-direct any future “surplus” dividends directly to depositors to avoid administrative duplication. Upon request, the Scheme Manager would also be prepared in principle to re-assign rights back to a depositor once a position of “surplus” has been reached (this position is also reflected in the claim form). The reason the re-assignment would only be made upon request is that in connection with previous schemes a significant amount of administrative time and effort was made contacting claimants to ascertain whether they wished their rights to be re-assigned. Many claimants did not respond, or after having indicated that they wished to obtain a re-assignment did not then complete the re-assignment forms. Many claimants therefore may well be satisfied with the re-direction process but, for the avoidance of doubt, the Scheme Manager would in principle, be content to re-assign once the scheme payment and recovery process has been completed.
In relation to your query regarding accrued interest, you are correct that the Scheme Manager’s assertion is that the effect of clause 9 (4)(a) is to prevent the accrual of interest beyond the date of the presentation of the winding up petition, i.e. the 9th October 2008. We note however your interpretation and we confirm that we are considering whether it is appropriate to make an application to the High Court pursuant to Section 16B in relation to this point. We assume you would support the making of application in this regard so that this issue can be resolved by the Court?
In relation to the numbered paragraphs, I comment as follows:-
If I may, I would repeat my request that you use mfayle(?)kpmg [dot] co [dot] im for any further correspondence to ensure that I attend to it immediately.
Regards
Mike Fayle
Scheme Agent
Thanks elgee for posting this
Thanks elgee for posting this at last. I say 'at last' because, although you say this was (and still is) posted on 'the website', I had never seen it and can find no trace of it - the latest I can see on the DAG Public site is David Greene's letter of 11 June. Unless I'm blind and cannot 'see' it, could you please request that it be posted there for future reference.
Anyway, now we have it! You are right to explain (above) the situation regarding those who have claimed EPS - I did not claim this so had not thought of it when replying to brennajm.
Point 2 appears to confirm, from the horse's mouth as it were, what I had supposed: that it is perfectly OK to delay applying for DCS in order to vote at the creditors' meeting; the only effect will be a possible delay in receiving the first DCS payment. Since voting requires submitting a proof of debt form to the Liquidator, this cannot therefore disqualify anyone from subsequently claiming under the DCS. I'm stating this here because a number of people had been told otherwise by the DCS helplines and were therefore understandably reluctant to take the risk - and may now not be able to vote as a result. So it's a great pity that this email was not (unless I missed it, but I had been waiting for it so I doubt that) posted sooner on the site. I might add that I have not received any reply to my own email on this question sent to the Scheme Manager on 20 June...
Edit by anrigaut:
I have just received a reply which confirms this point, asfollows:
"Apologies for the delay in responding to you, we are experiencing very heavy email traffic at present. Our advice on this matter is as follows, and all those manning the phoneline have been given the same information. I will doublecheck with them tomorrow that there are no misunderstandings, but wanted first to ask if you are sure that such advice was given by the DCS phoneline?
If you have registered for DCS and signed your assignment form, then you have assigned all your rights to us and we will act on your behalf. In that situation, the return of a Proof of Debt/Proxy form is unnecessary, and indeed meaningless.
However, if for any reason you have not yet signed the assignment form and you wish to vote in early July with regard to the KSFIOM liquidator's appointment, then there would be sense in returning a Proof of Debt form, as without it you would not be entitled to vote. You could then register for DCS after that - this may mean you miss out on the first payment round, but we do not anticipate significant delays prior to the subsequent payment rounds.
As the liquidation proceeds and distributions are made, the DCS will recover the compensation payment. Once the compensation has been fully recovered, any further distributions by the liquidator will be redirected to you. .
The assignment transfers all the right in the account (and any other accounts with the bank) to the DCS. If, after the recovery of the compensation, you actively wish the DCS to re-assign the rights to you, it is perfectly willing to do so. The re-direct approach for the actual payments will not require formal re-assignment.
I hope that clarifies matters.
Regards
Micky Swindale
Scheme Agent "
Re payout
Basically, this is my understanding too, except that the DCS may (will?) retain something for their 'recovery costs' out of the money they recover from the Liquidator, so you may get a little less via this route; but of course, depending on the size of your deposit, you will get some of your money back much faster via the DCS.
Note however that you will not necessarily get the full £50K in the initial payment - this will depend on the total amount of claims received by 4 July; I believe a figure of around £35K has been suggested as more likely, but don't know where or what foundation there is for this.
The second payout from the Liquidator is expected around the end of the year when the £90M or so from Share sales (currently under a 6-month embargo) should become available for distribution (provided no-one contests the sale).
further clarity...thanks
Lucky Jim, Anrigaut, Elgee, Shellshocked. Thank you. That brings some clarity and some financial benchmarks to aim at..
What is clear is that there are so many unknowns....mainly, how much and when beyond the initial pay out. It is this uncertainty that causes so much stress.
The crucial figure seems to be how much KSFIOM will recover from KSF UK.
Do we know when this figure and decision will be made?