Court Judgement 19-2-09

  • Anonymous
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Posted: Sat, 21/02/2009 - 11:07

The Court Judgement of 19-2-09 is now on the public site under Facts/Court documents: HERE Reproduced below for comment.. (mind your language ;-)

Judgment

[1] I have had the opportunity to study the papers in a little bit more detail, in light of submissions made this morning, over the lunch adjournment and I have come to a decision in this matter and also in light of the submissions I have heard this afternoon from members of the public.

[2] Just very briefly relating the history of this matter, for the record. On 9th October 2008 the Provisional Liquidator was appointed over this company and on 25th October 2008 the hearing planned to put the company into liquidation was adjourned at a time when it was said there were certain high-level meetings taking place between governments to try and resolve the matter; those, unfortunately, didn't bear fruit. On 20th November 2008 an additional Provisional Liquidator was appointed. On 27th November 2008 the matter came before the Court again and was adjourned for the consideration of a Section 152 Scheme of Arrangement; a similar adjournment was granted on 29th January 2009 and the matter comes before me today when a third adjournment, fourth in total but a third adjournment on what I might call Section 152 grounds, has been sought by the Treasury.

[3] Going back to fundamental matters this company is on any basis insolvent and there is no evidence provided to the contrary. Prima facie therefore a Winding Up Order should be made and I understand from both the Financial Supervision Commission and the Company itself that their position has not changed in that regard. A Liquidator, of course, has very well established roles and duties under Isle of Man Company Law. Our Company Law has dealt with, I think it is, two substantial bank liquidations certainly in the last twenty or thirty years and the legislative framework, despite its age, seems to deal with those quite satisfactorily, and has dealt with those satisfactorily in the past. A Liquidator is an Officer of the Court, he is subject to the directions of the Court. The Committee of Inspection, which is a well established body, can give consent to the carrying out of particular functions and the function of that Committee is to assist and supervise the acts of the Liquidator.

[4] Returning to fundamental matters, when a bank as with any company becomes insolvent, generally speaking, a compulsory Winding Up Order would be made. The Isle of Man does not, unfortunately, have any halfway house such as Administration. The extra complication as the Attorney has just said is in relation to banks where the Depositors Compensation Scheme is there to assist the small depositors. But the Liquidator in insolvencies is there to pursue recovery for the benefit of the company and its creditors with the benefit of the extensive powers available to him and with the guidance and assistance of the Court and the Committee of Inspection.

[5] Now in this case as I have noted in my previous Judgments a Scheme of Arrangement has been proposed and since the last Court there have been significant developments in fine-tuning it, if I may put it that way. There is no doubt that the most eminent practitioners have become involved in this matter to the benefit of all concerned. Mr Moss QC is well known to anyone who has ever dealt with insolvency matters; he is an extremely learned gentleman whose textbooks are regarded with great respect in the Courts. We also see that Herbert Smith, a leading firm of City Solicitors, are involved in the matter so there is no doubt that any Scheme which is put before this Court will, I am sure, be of a high quality.

[6] There are, however, certain fundamental matters of concern which were raised at the last Court and the question before me now is whether those have been addressed adequately. In many ways the key point so far as I was concerned at the last Court, and to some extent now, is the question of claims against third parties, and there is also the question of timescale. So far as claims against third parties are concerned it is, I must say, a little disappointing that the draft Scheme does not at present address this at all and I think this is unfortunate. There is no doubt that claims against third parties in this particular case will assume significant importance. It is likely that there may well be claims against regulators, other governmental bodies, possibly directors, I don't know, but claims against third parties are a key matter of concern for the body of creditors. Now, we have had the benefit of Mr Moss' affidavit on this point and if I could very briefly refer to it. At paragraph 30 of his affidavit, (he has in the previous paragraph identified the various claims which the company could raise against third parties) and as the Attorney said the most important category of those claims undoubtedly is the first category identified by Mr Moss. In short, what Mr Moss says is that the company would be able to bring such claims notwithstanding the sanction of the Scheme and even if the Winding Up Petition was dismissed and the Joint Liquidators Provisionally left office. If necessary or desirable the Scheme could make provision as to who was to bring such claims, how they were to be funded and how any proceeds were to be dealt with.

[7] As I say, I think it is unfortunate that the Scheme documentation currently before the Court did not at least make some attempt at outlining how those matters were to be dealt with. Paragraph 33 deals with the matter in slightly more detail and deals with the legitimate concern raised by Mr Wright on behalf of his clients about the shareholder in this company, which would appear to be Kaupthing hf or its directly-owned subsidiary. The question is raised as to whether that company or its subsidiary could interfere in the affairs of this company thus, I suppose, torpedoing any attempt to bring effective litigation. Paragraph 33 of Mr Moss' affidavit, as the Attorney has just said, makes it clear that in Mr Moss' view the company would remain at all times under the control of the Joint Liquidators Provisionally or the Scheme's supervisors (and as I understand it those would be the same people) and control will not revert to the company's directors or shareholders. So it seems to me that, bearing in mind that very learned opinion from Mr Moss, the Scheme as it currently stands as outlined in Mr Moss' opinion is sufficient to deal with the concerns which have been raised. In other words it will still be open to this company, under the control of the Provisional Liquidators, to take action against whichever third parties they consider are relevant in order to achieve fuller, or perhaps even full, recovery for the depositors. Of course the company through its Liquidators could always seek directions from the Court and the powers of the Joint Liquidators could be enlarged to deal with any specific matters which are necessary.

[8] I accept what Mr Moss says that the procedure of combining a Scheme of Arrangement with a Provisional Liquidation, especially in the context of insurance companies, prior to the extension of the administration remedy to such companies, is well established. I agree with Mr Wright that there is some doubt as to whether the analogy with insurance companies is particularly apposite but, as I say, the procedure of combining a Scheme of Arrangement with a Provisional Liquidation seems to have been well established in England prior to legislative changes.

[9] Mr Moss also deals with the issue of classes which was a matter which was raised at the last Court. I am satisfied that this is not a matter which should deflect from the principle of the Scheme of Arrangement; there is some uncertainty as to which regime should apply, whether it is the 1934 regime as has been outlined, or the more modern regime as applied in England but I am assured by the representatives from the Treasury that if there is a need to deal with the questions of classes sooner rather than later then that would not impede the timetable, the indicative timetable which has been put in Mr Lovett's affidavit.

[10] There was also some uncertainty expressed at the last Court concerning whether there would be a need to apply to the English Courts and the knock-on effects which that might have on timetabling. As has been pointed out by Mr Moss, the Cambridge case which went to the Privy Council has reinforced the well-established rules relating to co-operation in international insolvency matters and I do not see, as presently advised, why that should be an impediment to the Scheme.

[11] So far as the issue of timescale is concerned this was a matter which caused me concern at the last Court. Again, I express some slight concern that the issue of timescale was not specifically addressed in the papers before me but I have been assured today that the existing timescales remains, that is the indicative timetable annexed to Mr Lovett's previous affidavit. I express some concern about Mr Moss' reference to repeated adjournments and the time taken to prepare and implement a Scheme of Arrangement but I am assured that work is well advanced on the relevant documentation and there is no doubt that these matters are complex but the timescale must be adhered to.

[12] So far as the timescale for payments is concerned, I have had a useful affidavit from Mr Simpson which was sworn yesterday. That, in very short terms, says as follows that the combination of the Liquidation and the DCS [Depositors Compensation Scheme] would produce a total of £226m by 30th October 2009, that is £160m by 31st May 2009 and £66m by 30th October. A Scheme, however, would produce a total of £212m, the first payments being made some time in July or August 2009.

[13] So when one looks at those figures and that indicative timescale, and bearing in mind that none of these timescales can be necessarily written in stone, one does see that what had been a clearly identified advantage of expedition, speed that is, in relation to this matter is not perhaps as clear as it was previously.

[14] However, today it has been emphasised to me that a main advantage of the Scheme being propounded today is its security, i.e. that there will be certainty with payments because these payments are guaranteed and the payment dates are virtually guaranteed. That relates to the fact that the Depositors Compensation Scheme may be affected by subsequent bank insolvencies; these are indeed exceptional and uncertain times in which we live and I accept that there must be taken into account the possibility that the Depositors Compensation Scheme could be affected by subsequent bank insolvencies and therefore remove the security which might otherwise be available to depositors under that Scheme. I am also informed that the Scheme being propounded by the Treasury would in fact produce a small additional financial benefit to the depositors described as 1.2 pence in the pound but nevertheless that is a benefit which should not be discounted in any way, shape or form.

[15] I return to Mr Moss' affidavit at Paragraph 12 where he says that he understands the intention of the Scheme is to replicate the financial treatment which creditors would receive in a Liquidation and under the DCS but provide for payments to be made in a more efficient and timely manner whilst not prejudicing any claims which the company may have against third parties.

[16] In my view the interests of the creditors are protected under this proposed Scheme, or seem likely to be protected under this proposed scheme, and as has been said the devil will indeed be in the detail and the creditors will have an opportunity to examine the Scheme in great detail and have a hearing to determine whether in fact the Scheme is of benefit to them. This is not a hearing to determine whether the Scheme is in fact going to be approved, it is merely to allow further time for it to be developed.

[17] There were some other issues raised, quite rightly, by Mr Wright and others. There were issues over how the creditors might participate in the process. There is a very brief reference in the papers to a Creditors' Committee, at Paragraph 13.2 of the document produced by Herbert Smith. Again it is a very brief reference and I think it would have been helpful if greater detail had been provided at this stage. There is no doubt that a Creditors' Committee must be set up in order for them to have meaningful input into the process.

[18] Concern has been raised by Mr Wright concerning the powers of a Liquidator or Provisional Liquidator as against a Scheme Administrator. He points to the fact that the provisions in Section 207 of the Act which relate to the investigation of fraud would not be available to the Provisional Liquidators acting under a Scheme. However, it is undoubtedly the case as Mr Moss points out that the Section 206 investigatory powers would remain available to the Provisional Liquidator and of course the Liquidators Provisionally can come to the Court to ask for additional powers, as I have said before. I do not rule out and I do not discount the point that Mr Wright makes that perhaps the fraud powers under Section 207 won't be available but this does, as currently advised, appear to be one of those cases where fraud is unlikely to be an issue. If it is, of course, the matter can be looked at afresh.

[19] So my ruling therefore is that a Scheme should be allowed to be developed further and I am prepared to grant the adjournment sought by the Treasury, such that the matter will come before the Court on 9th April 2009, which is the date which the Attorney suggested the matter be re-listed for, and at that stage the Petition for the approval of the Scheme would be before the Court. So that is my ruling on the application which is before me today.

Deputy Deemster Corlett

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Timing of payout

  • moneytoburnnot
  • 26/11/08 31/05/09
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  • Sat, 21/02/2009 - 20:06

[12] So far as the timescale for payments is concerned, I have had a useful affidavit from Mr Simpson which was sworn yesterday. That, in very short terms, says as follows that the combination of the Liquidation and the DCS [Depositors Compensation Scheme] would produce a total of £226m by 30th October 2009, that is £160m by 31st May 2009 and £66m by 30th October. A Scheme, however, would produce a total of £212m, the first payments being made some time in July or August 2009.

[13] So when one looks at those figures and that indicative timescale, and bearing in mind that none of these timescales can be necessarily written in stone, one does see that what had been a clearly identified advantage of expedition, speed that is, in relation to this matter is not perhaps as clear as it was previously.

Interesting that the Deemster in the above acknowledges the combination of the DCS and Liquidation provides greater return and in the same timescale as the SOA, yet he still lets opts to allow the saga continue, though he does not sound at all convinced its the right path


Payout

  • Anonymous
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  • Sat, 21/02/2009 - 22:00

I suspect the figure £212M quoted for SOA does not take into consideration any topping off by the IOMG which they claim they would do under a SOA but not for a DCS. Based on their illustration issued in January, the £50,000 guarantee would be paid out a year sooner under the SOA.

For the record I am an over £50,000 depositor.


Timing of payout

  • Anonymous
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  • Sat, 21/02/2009 - 20:39

Moneytoburnnot: and the Deemster seems a little over-impressed with Gabriel Moss. The latter is not an "amicus curiae" in this matter, as might appear but, along with Messrs Herbert Smith (also referred to in rather glowing terms by the Deemster), merely highly paid to further the Treasury's case for a SoA.


SOA

  • maxsweep
  • 15/11/08 31/05/09
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  • Sat, 21/02/2009 - 15:46

It sounds as though the Deemster has already made up his mind for SOA and is only awaiting details. I also don't think, from the quote below, that the depositors will get a choice re SOA or Liquidation. It obviously means further delays beyond 9th April as once the finalised SOA is presented on that date a further hearing will be required for the creditors to give their views and then probably a further delay before the Deemster gives his final ruling.

"the creditors will have an opportunity to examine the Scheme in great detail and have a hearing to determine whether in fact the Scheme is of benefit to them. This is not a hearing to determine whether the Scheme is in fact going to be approved, it is merely to allow further time for it to be developed."

Don't mean to sound negative but reading through the whole judgement he certainly seems to be leaning towards SOA unless something major comes up to change his mind.


Huge rabbit' needed to avoid liquidation - advocate

  • Spanishfly
  • 25/10/08 31/05/09
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  • Sat, 21/02/2009 - 17:02

Came across this on one of the IOM Web sites in the news items

Huge rabbit' needed to avoid liquidation - advocate

Date Posted: 20/02/2009 09:21:43

Source: Manx Radio
;Huge rabbit; needed to avoid liquidation - advocate

On a knife edge!

That’s how the court case surrounding the collapsed Kaupthing Singer and Friedlander bank has been described by Isle of Man based advocate Jonathan Smalley.

Yesterday, liquidation of the bank was again averted with a court hearing adjourned until April 9 to allow final details to be added to the Manx government’s proposed Scheme of Arrangement.

Under the scheme, payments would be speeded up and small depositors would get their money back first.

Mr Smalley says it’s no surprise there was a mixed reaction to the latest adjournment and told Manx Radio:

"We've got another adjournment (and) it's, in my opinion, turned on a knife-edge.

"If the insurance companies had supported the application by Mr Wright, on behalf of the depositors' action group, I think we would have had a liquidation.

"I said last time we spoke about this that the tide was turning in favour of a liquidation. In my view the tide is running strongly and unless they pull a huge rabbit out of the hat at the next hearing I think we will have a liquidation."


Was it Harvey...

  • Anonymous
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  • Sat, 21/02/2009 - 17:05

....the invisible rabbit - or is that dating me?


Speed

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Sat, 21/02/2009 - 16:00

Well yes exactly, its a good job IOMG keep saying that a SoA will produce faster repayments to depositors than triggering the DCS, otherwise the way events are panning out I might not believe them.


Speed

  • Anonymous
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  • Sat, 21/02/2009 - 19:12

Tricky: On faster repayments: I do not think it is true and that is becoming more apparent.


Speed

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Sat, 21/02/2009 - 21:43

Come on elgee, lighten up, it was written with my tongue in my cheek. a little sarcastically if you like, but with a point ie both DCS and SoA are on timescales about 5% apart, and yet IOMG, event the Deemster for some stupid reason still bang on about how the SoA is going to give us faster repayments.

If you read some of my comments, sometimes I like to add a little pointed humour.


Speed - Trickle Dicky

  • Anonymous
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  • Sat, 21/02/2009 - 23:34

Trickle Dicky: Really, I did recognise your sarcasm but I was trying to make a serious point. As you suggest, it appears that the Deemster has struggled to find reasons for favouring the Treasury's arguments, and has (if I recall correctly) even grasped at dubious Treasury arguments at the level of 1% so as to do so.

Trying to be objective, which is obviously hard for any of us, it seems to me that the Deemster's last two judgments are eminently appealable, but there would be little point in doing so. However, if and when he approves the SoA, there may well be grounds and good reasons for an appeal. For those who may be thinking that an appeal would be too extreme, remember it is almost entirely by appeal from the High Court that most authoritative case law is made in common law jurisdictions, and this case is fairly novel.


Speed - elgee

  • manx-person
  • 17/10/08 31/05/09
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  • Sun, 22/02/2009 - 00:44

I agree with your suggestion that there are potentially appealable issues in the last judgments, as you know from our discussions.

I have posted elsewhere about the issue of formal representation of creditors that have instructed DAG.

If, as you have suggested, you are correct that the IOMG will go to "extra lengths" to avoid a liquidation/DCS then increasing the creditors appearing on the petition might help encourage them to improve the terms sufficiently to be approved.

There will be issues of "margin of safety" and I think that should be leveraged by DAG to its benefit.

Don't you think though if in the final analysis the SoA doesn't provide demonstrable benefits over a liquidation the insurers will just not support it? They will want to be quite analytical about there approval due to the risk of their conduct being questioned by policyholders.

If the insurance companies don't support it then it will be quite difficult I would imagine to gain the courts approval, especially if DAG doesn't support it.

This links back again to my suggestion for fuller representation of DAG members rather than just the few at the moment.


faster repayments ??

  • rbirch
  • 13/10/08 31/05/09
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  • Sat, 21/02/2009 - 19:23

isn't it likely that if the bank had been liquidated and the DCS triggered in October, the whip round for the banks to fund the DCS would have happened by now and we would be on our way .....

so when we compare timings for repayments the start date is important. for the DCS it could have been October ..... for the SoA ???


DCS funding

  • Anonymous
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  • Sat, 21/02/2009 - 23:42

Yes, we have lost 18 weeks worth of contributions from the banks in the DCS. Also, greater delay in activating the DCS, increases the appeal of the SOA. But why the support for an SOA? The SOA is better than liquidation because: list of points....
Deemster Collett failed to address the point that delay in compensating victims weakens the compensation. I would wish to seek further compensation for the delay in compensating me. The failure to activate the DCS is cheating us. The parental guarantee is outside of the control of the IoM; the DCS is within IoM control.


[15] I return to Mr Moss'

  • SgKZ
  • 10/10/08 31/05/09
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  • Sat, 21/02/2009 - 11:36

[15] I return to Mr Moss' affidavit at Paragraph 12 where he says that he understands the intention of the Scheme is to replicate the financial treatment which creditors would receive in a Liquidation and under the DCS

[16] In my view the interests of the creditors are protected under this proposed Scheme, or seem likely to be protected under this proposed scheme,

What the hell does 'seems likely' to do mean in this context?

We know that the FOREX depositors are severely disadvantaged and the issue has been raised on numerous occasions. They had a chance to re-dress that particular issue and have swerved it. So why would the judge think that they are 'likely' to behave according to the guiding principle of no depositor being any worse off under an SOA than liquidation?


[15] I return to Mr Moss'

  • Anonymous
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  • Sat, 21/02/2009 - 11:47

The problem Moss had, I should think, is having to comment upon a scheme the terms of which were not finalised ("indicative" only) and in some cases not particularised at all. I suppose that explains thepresence of "seems likely".

I too think the forex issue is an obvious injustice, and I suspect it will be amended in the perfected scheme, but since there is only a fixed amount of money available, any amendment that benefits (or removes a disbenefit) to one group of depositors will inevitably create a balancing disbenefit to another group of (or even all) depositors, and we have to beware of that.


[15] I return to Mr Moss'

  • Ally
  • 13/10/08 31/05/09
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  • Sat, 21/02/2009 - 12:03

I would tend to agree with elgee that the fx issue will be sorted in the final SoA.

I am cynical of everything, so it might not be because it is an obvious injustice, but much more likely that it is a big issue with the Insurance Companies and they are very unlikely to support a SoA that does not address this issue. Without the support of the insurance companies I would suggest it would be extremely doubtful that a SoA would have any hope of passing.

However as elgee says this would effect all other over £50k depositors as it would reduce the amount available to them.


ally, in light of what you

  • IceCrusher
  • 14/10/08 25/10/11
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  • Sat, 21/02/2009 - 18:23

ally, in light of what you say above, would it be your unbiased opinion that employing the SoA would tend to lend preference to the Life Co bondholders at the expense of the higher retail depositors? That is, in comparison to the DCS, and is this benefit a direct result of the change in provision of monies to the Life Co from the SoA payment schedule?


@Ice

  • Ally
  • 13/10/08 31/05/09
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  • Sun, 22/02/2009 - 11:54

Ice

I would say if they change the fx to say the date the scheme was approved it would only bring the SoA back in to line with a liquidation as the fx date in liquidation would be the date the winding up order is made.

How things stand at the moment the SoA is probably slightly advantages for over £50k's in GB£ as those in US$ and Euro are losing out. So if the fx issue in the SoA is changed to bring it into line with how a liquidation would work I would say the SoA wouldn't be advantageous to Insurance Co's on this issue when compared to liquidation.


@Ice

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Sun, 22/02/2009 - 12:09

It is my understanding that SoA1 (Lovetts 3rd affadavit) said the forex date would be set at the time the SoA is 'approved' - as it would under DCS, but in SoA2 (Lovetts 4th affadavit) this had been revised to be set at 9th Oct 08.


Tricky Yes you are right. I

  • Ally
  • 13/10/08 31/05/09
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  • Sun, 22/02/2009 - 12:34

Tricky

Yes you are right. I was speculating that by the time the SoA is put to the Court on 9th April then the fx rate would not be the 8th Oct 2008 but that it would be closer to the date the scheme is approved (if it ever is) or could even be 9th April. If this was the case then the fx used by the SoA would be broadly in line with the fx used under liquidation (being the day of the winding up order). If the fx in the SoA is changed to a date in April then in those circumstances they would be no material difference between the SoA and liquidation in terms of fx and so the life insurance companies would not have an advantage with a SoA over liquidation on this particular point.


insurance companies

  • chd
  • 13/10/08 30/09/09
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  • Sun, 22/02/2009 - 14:23

Ally,

However much the SoA is revamped, the insurance companies are still at an advantage with SoA than the DCS, since they only get one lump payment of 50k top up for all their bond holders under liquidation. The insurance companies will lose out tremendously, making liquidation a definite no no for them. Please enlighten me on this one.

Does this also mean that higher depositors under an SoA will be "footing the bill" for the insurance companies since they would not have to do so under a liquidation.


Insurance companies

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Mon, 23/02/2009 - 11:18

As non retail depositors, insurance companies get 20,000 I believe.
That is why they want SOA AND are trying to re-classify their investors as small and should be treated like retail depositors like us.
I posted elsewhere that bonds have tax advantages over bank deposits.
I also said that it would be incredible that 100% of bond holders cash was placed in one bank--the normal spread of risk would involve 3 to 20 different vehicles depending on the amount of the investment.

In broad terms, when it was my job to advise, I would look at a 40/40/20 profile---40% cash, 40% blue chip and 20% speculative----but if you were investing say 100,000 GBP, I would split each denomination into 4 or 5 different funds/institutions/currencies.

I don't know what the 300,000,000 of insurance funds is and what %age of each punters money is involved.

Regards


Wasn't this noted in the "Herald" report?

  • Anonymous
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  • Sat, 21/02/2009 - 12:13

" In winding up, the A G said he had heard no great clamour for liquidation and that without wishing to appear presumptive, he believed Treasury had surmounted the hurdles put before them at the last court. He acknowledged that a demanding timetable had been set but he thought it is achievable, and that the issue of the date set for currency rates needed revisiting."


no clamour for liquidation

  • Anonymous
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  • Sat, 21/02/2009 - 13:37

If the A-G is right, that there has been no great clamour for liquidation, then I think this may well prove to have been a mistake on our part.

Personally, I thought that there had indeed been quite a clamour for liquidation since the last hearing in January. In fact I thought I saw one in DAG's own last affidavit.


Clamour for liquidation

  • manx-person
  • 17/10/08 31/05/09
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  • Sat, 21/02/2009 - 14:14

I dont mean to be controversial here, but give the following opinion.

JW only represents 4 people directly. So the value in weight and numbers is perhaps only been applied in respect of these few people.

Of the public in the court there were only 3 people I think who expressed a view that matters shoud proceed to liquidation.

In favour of the adjourment were the IOMG, All of the Insurance Cos, The advocate representing the wishes of around 6 companies (I would guess client companies of a local fiduciary)

So in terms of numbers (or value) there hasn't been a clamour as such.

There have also been a number of letters written to the court and those were mentioned in court (maybe 12 in total) but I guess as the people haven't been proved as creditors, or sworn the evidence then less weight would be put on these things.

Also, IMO, JW said in his address words to the effect of "the SoA is dead in the water and the bank should be liquidated immediately"

In many ways it is a great shame IMO that people have contributed to the legal funds, but, as it curently stands, it is unlikely that the voices and values that the court will recognise will be limited to the four that JW represents.

When taking a decision the deemster can only take into account what was provided and said to him, as well as of course the law!

I know this is obvious, but perhaps it is so obvious it has been overlooked.


how does the court assess depositor opnion?

  • iainb
  • 11/10/08 01/02/10
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  • Sat, 21/02/2009 - 19:17

rightly or wrongly JW said he represented DAG...2000 depositors and 100m (conservative estimate)

the DD seems to have overlooked this

this is not a democratic process..its a legal process

those who can get a barrister to court will always have the upper hand

the DD judgement is very interesting

he seems to imply there is an overwhelming prima facie case for liquidation then opts for an adjournment!

however he seems like a sympathetc sort of person...and not a fool....so i'm confident at the next hearing he will do the right thing

regds


Q? at right thing

  • IceCrusher
  • 14/10/08 25/10/11
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  • Sun, 22/02/2009 - 04:02

What is the 'right thing'? If the DD allows the SoA to go before the creditors to vote on its acceptance or otherwise, then the presumption is that the Life Cos' will carry it. All the Life Co votes and DAG votes together do not count for the total number of creditors, so are the majority of interests being taken care of?


how does the court assess depositor opnion?

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Sun, 22/02/2009 - 03:34

There is a particular process (Rule 22 of the Insolvency Regulations 1934 I think from memory), for creditors to 'appear' in these proceedings. Clearly only 4 people have actually been admitted under rule 22 (as far as the DAG advocate's representation is concerned). In reality the remainder of the (2000-4) have not proved their deposit to the court, or its advocate - the reasons for this, which are valid to some extent IMO are due to AML requirements for identifying clients under AML, and of course the issue in taking instructions from a large number of parties.

The point I am making is that if this had been done it could not be 'overlooked' as you say.

The DAG do have 'a barrister to court' its just that the way in which the representation is structured does not, IMO assist the 'weight in value and number' argument.