Creditor Committee update

  • adrienne
  • 10/10/08 13/05/10
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Posted: Tue, 07/07/2009 - 16:02

On Monday night at 8:00pm, (following a HNW conference call at 7pm on Sunday) Gavin wrote on behalf of the HNW to the DST on two issues.

Firstly, having taken the PWC issue and conflict liquidator proposal seriously and debated it thoroughly, the email recognised that the DST and HNW Group have different views on the matter. We suggested how best to move forward, and that we need to respect each other's views and vote in accordance with our stated positions.

Secondly, regarding membership of the Creditors Committee. The HNW approach has been supportive of DST to date. In all our communications to depositors we expressedly stated we would be supporting the DST nomination. For example, we came up with the idea of a block nomination of 4, and we actively pushed for one of these to be a DST representative. We still believe this to have been the right decision - being mutually supportive of the key groups of depositors, and should have ensured we all get at least one seat each on the Committee.

Over the past few days, as our levels of proxy support became apparent, the HNW group extended a second offer of mutual support to the DST in order to guarantee depsoitors four seats on the committee - this was namely that the DST, the insurers and the HNW work together to give each group one additional seat on the Committee. If we all worked together this could have be achieved since we would have been able to reach in excess of the required 50% level by number and by value. Gavin has had a huge amount of discussion with the insurance cos that having two, two and two reps on the committee would make sense. In effect, that would mean on a committee of seven, we would have four retail depositors, with the right skills to represent us.
We told the DST team that we believed both our supporting groups of depositors expect us to cooperate in this fashion.

Our offer of mutual support was NOT accepted by DST.

We have yet to receive an explanation as to why DST resisted this.

This morning, as you know, the vote was held. As above, we did not support the conflict liquidator proposal put forward by DST, which was not a lightly made decision.

When the resolution to pass the block nomination of 4 was put forward - including Gavin Brake and Stuart Roberts, DST voted AGAINST the motion. Of all the votes cast, DST was the only one to vote against. the only one. Meaning that we DID NOT get two automatic depositor seats on the committee.

So then they went to an open vote. There were 11 nominations - two island depositors (lees and McMurray), two insurance cos, three HNW, three DAG, and one pension fund. Each group was alllowed to use their proxy six or seven times (I cant remember).

Think through some of the numbers (approx values only) then take your own shot at guessing about who put which votes where... Robert had some 300 - 380 votes, and 74Million in value, HNW 145-180 votes and £65 million in value, the insurance companies £290million and 11 votes (but several were voting independently).

....we will have to wait to see the outcome now, but one thing I'm prepared to guess about is that the island guys are going to get huge protest votes against DAG from the insurance companies.

In conclusion, possibly we now could have a cred committee made of two insurance cos, two island people, one pension fund, and maybe two seats left for depositors

Had DST co-operated with ourselves and the insurance companies we would have had a committee comprising 4 depositor reps right now.

Please can we ask for a decent explanation from DAG as to why DST would not support the initial block resolution.

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Creditors Committee

  • chb
  • 10/10/08 15/10/09
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  • Wed, 15/07/2009 - 15:56

Just heard via the Royal Skandia website that they have one seat on the creditors committee.


CC and Royal Skandia - Apologies

  • chb
  • 10/10/08 15/10/09
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  • Wed, 15/07/2009 - 16:26

Sorry, spoke too soon.

In fact, their website says 'Royal Skandia was nominated for a place on the committee. As soon as the results of the vote are known we will place the details on this site'. Please disregard previous.


Spooky

  • manx-person
  • 17/10/08 31/05/09
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  • Wed, 15/07/2009 - 16:50

With contradictory comments like that, we can be sure you are a spook working for the IOMG/PWC ;-)


Driving a wedge

  • barrona
  • 17/11/08 31/05/09
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  • Tue, 14/07/2009 - 11:39

Having read the plethora of emails from bioth HNW and DST, I must confess to being extremely dismayed by what I construe as bickering. The relevant authorities must be laughing up thir collective sleeves.
Both groups should unite to show a unified front in what I still hope is the joint aim of both groups namely, to achieve a 100% return to all depositors.


Creditor Committee update

  • Anonymous
  • Offline
  • Mon, 13/07/2009 - 17:13

See Anrigault's Blog "What a Shambles"

  • sabi Star
  • 10/10/08 n/a (free)
  • unspecified
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  • Sun, 12/07/2009 - 08:31

See Anrigault's Blog today "What a Shambles" - top of "Recent blog posts".


Results of who sits on Creditors Committee

  • chris watson
  • 23/10/08 31/03/10
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  • Tue, 07/07/2009 - 19:36

This may be posted elsewhere, but when are the results on who sits on the Creditors Committee expected?


results unknown

  • adrienne
  • 10/10/08 13/05/10
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  • Tue, 07/07/2009 - 19:47

Hi Chris. We dont know now. All the parties put the ticks in their chosen candidates boxes, and they will try reconcile the numbers. They will count % by value and % by number for each candidate. I suspect that many of the % for all six of our candidates will be a mix of value and number anywhere between 15% and 80% depending on where the insurance votes went. So its anyones guess now which carries more weight. If there were lots of protest votes we couold find the outside candidates all in.


I cannot speak for DST. No

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 07/07/2009 - 16:59

I cannot speak for DST. No doubt they will give their views in due time.

But in the meantime I would be very greatful if the HNW group could give a decent explanation as to why it decided against voting for the appointment of a conflict liquidator (and thus for the continuation of PWC alone), despite the overwhelming contrary view expressed, not by DST but by DAG members in a confidential poll on this site. Of over 600 members of DAG (more than the total number who gave proxies to either DSTor HNW!) who responded to this poll, only 78 (13%) were in favour of retaining PWC alone. Something just doesn't seem to add up.

You do say that this decision was not made lightly; so who is wagging the tail of the dog? Given that only 78 DAG members expressed their support of this move in a heavily subscribed poll (where anyone wishing to oppose the majority view had ample opportunity to express themselves), I wonder how many of the 150-180 DAG members who gave their proxies to HNW are happy with this outcome.


Anrigaut - please read

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 13:28

Anrigaut. You raise valid points.

  1. The HNW Group has given an explanation today to those who gave it the proxy, as part of the updating/communication process (it is email #10). I will happily send it to you if you like. Drop me a line via this site and I will send it on. At the risk of inflaming things, I would prefer not to post this email more widely.

  2. I am not sure if you attended the meeting, but please be aware that there was no vote on whether to appoint a conflict liquidator. This is an important point - there was no vote on whether to appoint a conflict liquidator. Robert Coates asked for this resolution to be put to the meeting. He was informed by Seth Caine that this would not be legal. Hence it was not put to the meeting. Hence there was no vote on whether to appoint a conflict liquidator.

  3. It is however fair to say that, had such a resolution been put, the HNW proxy would have been voted against it

  4. In terms of the DAG survey which I believe came out on Monday (?) I agree this is interesting. I have always been a bit concerned about these sorts of surveys because (i) the way in which the question was put "kinda leads" to the answer hoped for....and (ii) I do not believe it is valid to include those with less than £50k (joint £100k) in the results, because the question of PWC or conflict liquidator is not relevant to these lucky people who get paid out in full by the DCS in the very near future. It is relevant to those who are in this, potentially, for years to come.

  5. In terms of the survey, I guess the only way to really get the bottom of your question is to cross reference those who filled in the survey with the HNW Proxy list. What I can tell you is that I have not received any complaints so far in terms of how the HNW proxy was exercised from those who granted us their general proxy. They were also very much aware that any decision on how to exercise the proxy would be made by majority voting on the Committee of nine.
  6. Finally, you might like to know that, on a personal basis, I did hold quite a few speical proxies for some very large depositors who instructed me to vote out PWC. And I exercised their special proxies exactly as they requested.

Gavin


resolution illegal?

  • Anonymous
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  • Sun, 12/07/2009 - 18:57

Hopper: You wrote: " This is an important point - there was no vote on whether to appoint a conflict liquidator. Robert Coates asked for this resolution to be put to the meeting. He was informed by Seth Caine that this would not be legal."

I have said several times that this "important point" that you make is incorrect. It seems that although you were actually at the meeting, you have put forward an incorrect account of what took place and this incorrect account is repeated throughout the forum by HNW supporters. In the following e-mail correspondence, the final email from Seth Caine makes the JDORs' position clear and sets out what is claimed by Cains to be the legal position on our conflict liquidator resolution and what was said at the meeting. As you will see it is not claimed by Caine that it was "not legal" nor "illegal" nor even unlawful:

http://www.ksfiomdepositors.org/public-page/dst-correspondence-pwc-and-c...

I also received the following comment by e-mail from our David Greene of Edwin Coe:

Date 9 July 2009 11:20

[Addressee deleted]

... First, I understand that it is suggested that in some way the putting of a resolution for the appointment of BDO as joint liquidator was "illegal". There is nothing illegal about it or, more appropriately, unlawful ....


thanks to elgee

  • iainb
  • 11/10/08 01/02/10
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  • Sun, 12/07/2009 - 19:00

fascinating post elgee.....thanks

because no voting group has a majority of both votes and value then it is impossible to get any positive resolution passed

it may have been better to put the resolution "the current liquidators (PWC) should not be replaced" this resolution would not have received "a majority by votes and value" and would have been defeated

we could then have replaced the liquidator!

regds

iainb


thanks to elgee

  • Anonymous
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  • Sun, 12/07/2009 - 19:17

the first resolution (to which you refer above) was put by PWC, not by us, and the wording they chose appears in the relevant statute. I agree with your analysis which suggests that passing that resolution is a very difficult hurdle to overcome.


stop winidng us up

  • chd
  • 13/10/08 30/09/09
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  • Mon, 13/07/2009 - 07:24

Elgee,

"I agree with your analysis which suggests that passing that resolution is a very difficult hurdle to overcome."

So stop winding everyone up, and let's move on. We don't have the voting power to do anything with PWC, so let's try and work with what we have instead of nitpicking with semantics.


stop winidng us up

  • Anonymous
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  • Mon, 13/07/2009 - 09:52

Swiss: Please read my posting again and try to follow the argument. The resolution that I describe as a very difficult hurdle to overcome was the PWC resolution, which they (wrongly in my view) insist had to be pased first. I was not referring to the conflict liquidator resolution, which DAG was not allowed to put.


I agree: The audience is critical.

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Mon, 13/07/2009 - 08:54

What counts is the result. I accept the means v the end arguments.

But Elgee you need to pay much more attention to the capacity of the audience. You are starting to appear to be incognisant of your audience, you are starting to appear confrontational, and as you appear to be speaking for DST this is very important.
Whilst you might be able to have the knowledge 'to split atoms' I wonder whether this has been the best approach in the recent, and continuing, timeframe.
Perhaps you might like to hazard a 'statement of intent/aim'. Prognosis (or even a full analysis) rather than a point by point approach. Detail is important, but so is the big picture. Personally I'm starting to sense an agenda. Physicists, and even lawyers, are not famed for their sensitivity to their audience. perhaps you might reflect on this and put some some effort in to improving your PR (and DAG's) at this point.

Personally I want an autopsy. people pick up on 'currents'. 'Gordon 45' posted interestingly and with pertinent detail just recently. One aside he made referred to the 'ego's' of DAG and HNW. I'm starting to feel, as if I haven't stated this enough so far, that some ego's need to be popped.


@Hopper

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 08/07/2009 - 15:00

Thank you Gavin for your considered reply.

I did not attend the meeting, but had understood the point you make in (2). What I wished to understand more clearly was the reasoning behind your group's decision to vote against such a resolution if it had been put. I would be pleased to receive your email #10 and have emailed you about this.

The survey (poll) I was referring to is the one which closed about a week ago. I agree that a problem with interpreting the results of this poll was the fact that the question only really concerned those with over £50k (though it seems to me unlikely that many under £50k would have bothered to vote). DST were aware of this too, which is why - at almost the last minute - they set up another poll and also asked members to complete a confidential on-line survey indicating the amount of their deposit. This is the survey to which nixi has referred in another post, though the results have not been announced (and I am not privy to them). Unfortunately, IMO, this survey asked only whether or not depositors were satisfied with the performance of the liquidator, but not what they thought should be done about it. Which is not necessarily the same thing! While it seems clear that depositors have a very low view of Mr Simpson's performance to date (only 6% of the 145 who have voted in the simple on-site poll say they are 'satisfied') - a view which I uderstand many of your group share - this begs the more pragmatic question of what best to do about it.

Anyway, enough of that. Whoever was (more) right or wrong, this is now water under the bridge and we have to make the most of what we've got. We have a lot of capable people between us. Can we at last all try to pull together?


Comflict liquidator not option on IOM

  • chd
  • 13/10/08 30/09/09
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  • Wed, 08/07/2009 - 13:42

So if Robert Coates was informed at the Creditors Meeting, that appointing a conflict liquidator on IOM was not a legal option, why didn't the DST legal team find out this info before leading us all on?

I honestly feel that the whole liquidator replacement/conflict appointment scenario has been a total waste of time and energy, since it now becomes apparent that both of these options were about as likely as finding water in the Sahara.

Everyone got so excited at the prospect of getting a new kid on the block for liquidation, and the only thing that we have gained is a great chasm between DST and HNW.... and losing valuable representation on the CC.

It now seems that HNW did more homework on this matter.


Conflict liquidator not option on IOM

  • Anonymous
  • Offline
  • Wed, 08/07/2009 - 14:50

I make this posting on my behalf, not on behalf of the DST. I do not like to see depositors being misled on legal matters.

Of course the conflict liquidator was an option - do you think DST would have proposed it otherwise or BDO Stoy Hayward would have spent thousands of pounds of their own money looking into it beforehand?

It was simply PWC's contention, naturally withheld from us until the meeting itself, which we dispute in any event, that the conflict liquidator resolution could not be put unless and until their own resolution (which was required by IM law) that an application be made to the court to appoint alternative liquidators to themselves had been passed, and of course that resolution was defeated.

In summary, the legal arguments made by PWC and its lawyers were that the meeting must first resolve to oust PWC completely before the meeting could consider the resolution to appoint a conflict liquidator. The argument was that the conflict liquidator resolution could not be considered if the meeting did not vote to oust the existing JL(P)s because the existing JL(P)s would not be willing to work as JLs alongside a conflict liquidator.


Conflict Liquidator

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Wed, 08/07/2009 - 16:42

Just my 2p and expanding on elgees post....

For a "conflict liquidator" to be appointed, and be able to exercise his powers, he would need to be appointed to act jointly and severally,

This would require the consent of the current incumbents (Spratt &Simpson). Such consent was not given (and in fact was withheld by Simpson at the meeting). Since the responsibilities of a liquidator are of a personal nature it would require each individual to consent and in fact this consent could not have been given at the creditors meeting as Mr Spratt wasn't present.

I think it is difficult therefore to imagine, in the absence of an agreement by the current incumbents, how an additional liquidator could have been appointed in any case.


Is this not the elephant on the table?

  • chris watson
  • 23/10/08 31/03/10
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  • Tue, 14/07/2009 - 10:27

Manx-person writes: "I think it is difficult therefore to imagine, in the absence of an agreement by the current incumbents, how an additional liquidator could have been appointed in any case."

Assuming this statement is correct, it means the circumstances did not exist for DST to propose a change of liquidator.

Rather than the various depositor groups ripping themselves apart publicly, I am surprised there is no discussion by members of this forum as to why Mr Spratt was not compelled to attend.


Is this not the elephant on the table?

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
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  • Tue, 14/07/2009 - 12:46

I am not sure if I agree with elgee's analysis on this, but there is enough argument on this thread without me adding to it.

Mr Simpson stated at the creditors' meeting that Mr Spratt was originally intending to attend, but he couldn't due to unforseen family matters (I don't remember the exact words but it was something to this effect)


Is this not the elephant on the table?

  • Anonymous
  • Offline
  • Tue, 14/07/2009 - 10:42

It is not hard to imagine. Creditors' will is expressed through a vote. If in favour JLPs then have to decide whether they are willing to work with conflict liquidator or not. If not, they resign and c.l or another liquidator appointed in their place. If PWC had not found a way to block the vote, we think they would have been forced to negotiate, in which case it would have been settled by agreement.


Elgee

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 16:05

Laurence, are the DST therefore thinking of challenging in court PWC's contention that the conflict liquidator resolution could not be put unless and until their own resolution that an application be made to the court to appoint alternative liquidators to themselves had been passed? Gavin


Elgee, Actually no, I didn't

  • chd
  • 13/10/08 30/09/09
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  • Wed, 08/07/2009 - 15:04

Elgee,

Actually no, I didn't think that DST would have proposed a conflict liquidator if they didn't think it an option, but, now that the DST has jeopardized 4 seats on the CC, I am beginning to doubt them seriously, and cannot wait for an explanation. My parents have supported DST both financially and emotionally all along, but are absolutely flabbergasted that they did not give mutual support to HNW. There was room for both groups.

After DCS has paid out, most depositors left to scramble for their money are in fact HNW, which by the way should be renamed to MTFK (more than 50K). DST represented everyone during the SoA saga, and I have nothing but praise for them. However, it is time to move on and adjust tactics, because the HNW group has a serious argument and deserves the following that they have. It's no longer a battle between the "more or less than 50K" depositors, it's a battle of MTFK! What a pity that DST hasn't adjusted to these new demographics.

Hopper's recent postings are brilliant, and at last we have been given some solid and useful information. If anyone gets on the CC, he deserves the spot.


Elgee, Actually no, I didn't

  • Anonymous
  • Offline
  • Wed, 08/07/2009 - 15:36

Swiss, are you not a member of the HNW group anyway? If so, why are you now pretending to have been swayed by recent events?


@Elgee

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Wed, 08/07/2009 - 15:56

What has'nt seemed to sink in yet is that this is not a competition.

We are all in this together ( except yourself Elgee because you have nothing to lose)

The time for intransigency and head butting is gone.

IMO It should never have been there in the first place.

What possible good reason is there to give up the chance of 4 places on the CC.?


No pretending going on

  • chd
  • 13/10/08 30/09/09
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  • Wed, 08/07/2009 - 15:54

Elgee,

No pretending going on. If you deepen your research, since that is your forte, you will see that my parents are members of both HNW and DST. We felt it necessary to look at arguments on both sides. They gave their proxy for the SoA to the DST, because they weighed up the options, and thought that the better choice at the time. They have contributed to the legal fund,and are forever grateful to the DST.

They gave their proxy for the CC to Gavin, because once again, they weighed up the pros and cons, and were swayed towards HNW, basically because of their transparency, and did not believe that replacing the liquidator was a viable option - e.g. costs and delayed dividend payment. God my parents will be dead if we hang on any longer!

We will continue to be members of both groups (if that is allowed), and just like in any democracy, weigh up the pros and cons in making future decisions. DST made a big mistake in not giving their mutual support.


Well let's wait and see the

  • chd
  • 13/10/08 30/09/09
  • a depositor
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  • Wed, 08/07/2009 - 15:42

Well let's wait and see the results of the CC. But mutual support would have been a decent gesture.

FYI, I do not see any mud slinging from HNW, just facts that have been stated.

And yes, you're right that neither group has influence over the life companies, which is why it should have been noted beforehand that they had more punch in the ousting of the liquidator than both DST and HNW combined.


Well let's wait and see the

  • Anonymous
  • Offline
  • Wed, 08/07/2009 - 16:06

Mere assertion does not make a fact.

Of course it was noted beforehand that the life cos. had by far the greater say by value and so they were canvassed by DST on the conflict liquidator issue. I am informed that the HNW similarly canvassed the life cos., but did so with a different view about DST's conflict liquidator proposal.


Well let's wait and see the....

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 16:32

Laurence.

The HNW group (MTFK) have had a dialogue with the life cos for months. I know because I have had this dialogue personally. To be clear, I believe we did not "similarly canvass the life cos". In my ongoing conversations with them I explained to each of them our proxy voting strength and our views. Our views included that (i) DAG DST and HNW should each have two seats on the Committee (ii) life cos should likewise have two seats on the Committee (iii) PWC should remain (iv) we were against the appointment of a CL alongside PWC.

I had an easier job here than the DAG DST, because the HNW view happens to be very similar to the views of the life cos on these topics. I did not have to try to convince them to change their position, unlike the DAG DST.

It is worth pointing out that I was having a similar dialogue with the life cos over the SOA vote, when our views were opposite to those of the life cos (HNW against, life cos in favour). We disagreed but respected each others position.

Gavin


Well let's wait and see the....

  • Anonymous
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  • Wed, 08/07/2009 - 17:04

Gavin,

Thanks for clarifying what HNW did. But the positions:

(iii) PWC should remain; and
(iv) .. against appointment of conflict liquidator,

were directly opposed to the views overwhelmingly and consistently expressed in each of our 4 recent samplings of depositors.

DST could not ignore depositors' wishes on this or any other issue. On this issue DST asked them directly and they told us in such numbers that we could be left in no doubt.

I recognise that HNW had a easier ride with the life cos than DST did. But DST has never taken the easy route; only those paths that it believed to be in the best interests of depositors.


Well let's wait and see the....

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 19:32

Laurence,

Always a pleasure. I believe it would be fair to say that at times both groups, DST and HNW, have chosen difficult paths, sometimes in synch, sometimes apart, because they believed that path to be right.
But one of my key concerns over the past several days, namely DAG DST's tactics regarding the Creditor Committee vote, has yet to fully addressed by any member of the DST. At least you have held your head up and expressed some of your views, and for that I greatly respect you, even though I do not always agree with you. I believe Stuart and Simon are both on holiday, but what about the others? Does any other DST member have a view ?
I really do hope that "things work out" with the eventual structure of the Creditors Committee. Maybe we will know by the end of the week ? God knows. Let's hope now that a sensible balanced representative committee is somehow established. Maybe with a bit of luck this still might happen. As I have stated repeatedly, I think a 2 DAG DST, 2 insurer, 2 HNW would be right, with the individuals I have mentioned to you privately, plus 1 other from outside of these groups to make the 7. We could have so easily had it formalised by now, with the offer that I developed with the insurers and put on the table, but DAG DST instead chose to "gamble" both your position and ours. No surveys of depositors views can be used to support this "gamble". It does not seem to be a justifiable decision however you look at it. Right now I can only conclude that it was personal/vindictive/irrational....?
But lets be optimistic. Lets assume, somehow, that a sensible and fair Committee somehow comes out of this messed up voting process. Thank God for all of us if it does. However, this will NOT EVER justify the way in which we got there. Two thoughts to leave you with,
(i) if you want get to Bristol from London, you don't drive via Edinburgh. You might still end up in Bristol, eventually, with a bit of luck, but it is a pretty stupid route to take, or,
(ii) if you play russian roulette and don't get shot on the first go, you might still be alive, but it doesn't mean it was a good game to play, it just means you got lucky
Lets hope we get lucky.
Rgds
Gavin


What is DST's explanation?

  • ruggrat
  • 01/11/08 12/01/10
  • a depositor
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  • Thu, 09/07/2009 - 08:58

Hopper, you said:
"It does not seem to be a justifiable decision however you look at it."

I am eagerly awaiting the explanation from DST, though, at this point, it won't help anything. Still I am now of the belief, after having read many posts by you and others, that DST has made strategic mistakes. It would be more than self-gratification to know what was DST's reasoning, for my own future decisions about whom to support. If it has anything to do with the fact that some DST leaders are on holiday, well, I find that would be unconscionable, and a terrible mistake for them not to be following events as critical as the appointment of oversight committee members. I hope this "Creditors' Committee" is not just a "feel-good" measure with little or no influence on what happens.

"...I can only conclude that it was personal/vindictive/irrational....?"

This sounds slightly inflammatory, doesn't it? Not that I disagree. I still want to see DST's explanation, more than ever.

ruggrat


I also find the silence from

  • chd
  • 13/10/08 30/09/09
  • a depositor
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  • Thu, 09/07/2009 - 09:25

I also find the silence from DST rather disturbing. They have had my full support during the entire fiasco, but I am deeply saddened by their recent manoeuvre, and fail to comprehend why?...

I know that the conflict liquidator issue was an issue of conflict between DST and HNW, but from what I understand (and please correct me if I'm wrong) it was made clear at the beginning of the CC meeting on Tuesday that bringing in a conflict liquidator and ousting the present liquidator was voted out due to the mega voting power of the insurance companies. So... Why oh why didn't DST then mutually support Hopper during the voting process, since any conflict over the liquidator problem was no longer to be an issue? It was out of both HNW and DST's hands.

We would have all benefited by having 4 seats shared between DST and HNW on the CC. Hopper spent endless hours negotiating with the insurance companies to assure this position. He had them on our side. But alas..... DST chose a different path. As Elgee has previously posted somewhere else on the forum, the DST does not take the traditional route. Let's wait and see where their route will lead us.


Silence from DST...

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 09/07/2009 - 10:16

Swiss, your summary is spot on. I have always had grave concerns about the lack of public disclosure of some of those on the DAG DST. Not all, but some. It seems that this secrecy of "who takes decisions" and "how decisions are taken" is quite a convenient situation at a difficult time like this, when a very strange decision appears to have been made by the DAG DST (that decision being to block the formation of a perfectly sensible and well structured Creditors Committee with a guaranteed 4 out of 7 representatives being retail depositors).

If, by luck, we do end up with a well structured Creditors Committee, then let's not forget that the journey to get there was wrong, solely due to DAG DSTs refusal to accept HNWs offer of mutual support. To be clear, I have grave concerns about the process followed, not the outcome, which we don't yet know. The outcome, even if, fingers crossed, it ends up okay, does not justify the process followed by the DAG DST.


Lawyers behind this strategy?

  • chd
  • 13/10/08 30/09/09
  • a depositor
  • Offline
  • Thu, 09/07/2009 - 12:57

As I ponder over DST's reasoning behind their inexplicable actions, I'm wondering if they haven't received expert advice from Edwin and Coe to try and gain a DST monopoly on the CC. We have already been informed by DST that they expect to take advice from Edwin and Coe during their stint on the CC, so it makes sense, from a lawyer's perspective, to hug as many seats as possible, because they will be in for some big business during the next 4+ years.

Ahh lawyers will be lawyers!


Post deleted

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 14:49

Post deleted


Hello Anrigaut. The HNW - addional comment added

  • adrienne
  • 10/10/08 13/05/10
  • a depositor
  • Offline
  • Tue, 07/07/2009 - 17:24

Hello Anrigaut. The HNW committee has regular conference calls and take minutes of our meetings and the debates and discussions we have. We follow a formal agenda.
We have minutes of the vote we took between the nine of us on the conflict liquidator, which we did on two separate occasions as more information became available. we make decisions on a majority basis on the committee, and that is the way we then use the proxies.

one of the key reasons we swung to 'against' in the last vote is the incredible credentials of Schwartzman - who will be responsible for the litigation aspects. Enron being one of them. unfortunately he far outclasses the proposed individual from BDO, although BDO is a respectable candidate.

I am not at liberty to share the minutes with this whole forum, although we have given detailed information on our thoughts to depositors who provided us their proxy in the HNW group who have asked for them.

We have also shared the summary of those discussions with the HNW group who have provided us their proxies - in a formal issuing of a series of emails - currently on email 9 which outlines our reasoning.

To add further to this the HNW voting power on the conflict liquidator idea made no difference today anyway.

Under IOM law, the resoution to appoint a conflict liquidator was not allowable. When DST asked for this resolution to be included today, they were told that it was not legal. The only resolution allowable was to vote out PWC. In this instanace, if you look at the numbers, the HNW proxy vote made no difference. To vote out PWC, it needed DST to give a 50% majority by number, which they did, and the insurers to give a 50% majority by value, which they did not.

Our vote was academic, but we stood by our decision to vote against removing PWC wholesale


Retention of PWC

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Tue, 07/07/2009 - 20:46

Adrienne:
Thank you for responding. I am well aware of your internal voting procedure and was in no way suggesting you should post your minutes here.

Despite your explanations, and independently of the fact that the HNW vote apparently made no difference to the outcome, I remain extremely disappointed and upset that a majority of your committee chose to overide the clearly expressed wishes of a vast majority of DAG members. If you seriously believed you had valid reasons for doing so, why did you not post them on the forum before the vote to give depositors a chance to reconsider their opinions and possibly change the way they voted in the poll? Would that have not been a more open course of action?

With respect to the reasons you give, I'm afraid I am not familiar with the "incredible credentials" of Mr Schwartzman; a quick search in Google confirms that he was indeed involved for PWC in the Enron case, but not much more. Perhaps you can enlighten me on what he actually achieved for the Enron victims and what you hope he might do for us? Whatever he did, I understand that many of those victims are still fighting for compensation 8 years after the event; is that what we have to look forward to? I do not know on what evidence you base your assertion that Mr Schwarzman "far outclasses the proposed individual from BDO" or even how relevant that might be if it is true, but the fact remains that we are still stuck with Mr Simpson...

As a lower net worth partially protected depositor, I shall now claim DCS and wait to see if and when anything else trickles back over the years. To those who have more at stake, I wish you luck.


We didn't have numbers to vote against PWC

  • chd
  • 13/10/08 30/09/09
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 08:53

According to latest reports, it seems that we simply didn't have the numbers (value) to vote for a replacement liquidator... and never had for that matter. Surely DST knew that this was an impossible task to bear against the mega millions of the insurance companies, yet the poll got people all excited about the prospect of bringing on a new liquidator. If this was doomed from the beginning, why were we led to believe that it was possible? It doesn't matter how much disrespect we have of PWC, we are simply not in a position to change him. Just like we are not in a position to change the jurisdiction where we have deposited our funds. I'm sure that we would love to have deposited our monies in a country that refunded 100%, but that just isn't the case. So we are going to have work with what we have and make the most of it. I hate the IOM for what they have done, especially their crappy SoA, and despise PWC's actions in making us pay for it, but further bashing of IOM and PWC will only bash us further into the ground. We are going to have work with what we have ON A UNITED FRONT PLEASE..

And.. I still don't see how appointing a conflict liquidator would not cost more money. It's an extra body on board, that wouldn't be willing to charge at a busboy rate . Just as the name suggests, this would have created an enormous amount of conflict with PWC, who clearly did not want one.


I think the problem was that

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 10:05

I think the problem was that the DST started to believe its own propoganda that 95% of depositors supported the removal of PWC! Perhaps we can all now get on with the job of ensuring that depositors receive as much of their money as possible rather than these peripheral skirmishes.


@ expatfrance1

  • columbgc
  • 11/10/08 14/07/10
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 10:58

Spot on expatfrance1! We let emotions take over pragmatic thinking and we managed to hurt ourselves in the process..... Assuming that we get now once member from DST and one from HNW in the committee could DST and HNW (outnumbered as a result of their inability to agree) make common front when time comes to protect our interests? Remains to be seen.


Liebenk

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
  • Offline
  • Tue, 07/07/2009 - 16:54

Liebenk: "Robert had some 300 - 380 votes, and 74Million in value, HNW 145-180 votes and £65 million in value"

So DAG (i.e DST + HNW) only had 560 maximum in proxy votes between them (us)?

I know there were about 11000 depositors and many have been paid out, but this seems a tiny number.


@ chris

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 02:13

Chris there were 11000 accounts.

Some depositors had more that one account.

70% of depositors have been paid out so would not bother to vote even so i would agree that this seems a small number.


Thats correct. Just noted the

  • adrienne
  • 10/10/08 13/05/10
  • a depositor
  • Offline
  • Tue, 07/07/2009 - 16:59

Thats correct. Just noted the same in my reply to DonaldC.


PROXY VOTE

  • benchar
  • 10/10/08 31/08/09
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 00:25

Regretably,due to lack of any initial directive except that "if your deposit was less than £350,000 you would be better to claim under DCS",I believe that like myself many of us PANICED and returned DCS forms too early giving up our right to vote.
Obviously a deliberate ploy by the DCS organisation ,and it worked.
It was not until the last week of June that advice was given not to apply until after 7th July and so retaining proxy vote,and DCS dealine extended.
This info was issued too late, a basic earlier directive from either DST OR HNM
" To hold off application to DCS until consideration could be given to the issues"would have saved the day. I believe like myself most took void of info as an indication simply to get application out of the way not realising we forfeit our right to vote.
On all previous issues we were advised immediately to hang fire until the issue could be considered.It is my belief that if so the number of proxy votes would have almost been the same as for SOA .I for one could have held off,as a delay in any DCS payment would not have caused me a problem.
We owe so much to the efforts of the dedicated few, but at the 12th hour many of us jumped the gun and there was a failure in communication,we cannot turn the clock back but we must be more careful im the future.


Lack of DAG support for HNW group

  • DonaldC
  • 25/11/08 31/05/09
  • not a depositor
  • Offline
  • Tue, 07/07/2009 - 16:32

You say

"The HNW approach has been supportive of DST to date"

Except of course in supporting the SoA, setting up its own proxies and refusing to vote for the conflict creditor.

Can't possibly think why the DST didn't want to support your 1:3 (DST:HNW) block depositor strategy.


correction on interpretation of block vote

  • adrienne
  • 10/10/08 13/05/10
  • a depositor
  • Offline
  • Tue, 07/07/2009 - 16:51

Hi.

Just to be clear, we did not support SOA, we said we WOULD support an SOA IF one was put on the table which gave us significant financial benefit, and gave us fair legal rights, etc. When the SOA as presented was never improved, we raised votes to vote it out. I think that is very different from supporting it.

Please can I refer you to our courts submissions as reference.

The block of four votes was : 1 insurance company, 1 HNW, 1 DST, and a trade creditor. Not a 1:3. The remaining three positions could have been voted on by all the representative groups. It would have ensured two retail depositor seats. By voting against it, we are as a retail depositor collective exposed to no seats, one seat, two seats, none for DAG, or three for us all, depending on where the sympathy lay with the insurance cos, the trade creditors, the pension funds, the islanders, etc.

It is important to note that combined, the DST and HNW groups today held approximately 500 proxies. I believe there are 11,000 depositors in this bank. Neither of us represents the bulk of depositors.


CC voting - block vote

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sat, 11/07/2009 - 08:56

I don't know exactly on what basis the DST decided to vote against this particular resolution. But I find it quite extraordinary that such a resolution for a block vote in favour of four of the nominees over the other seven should ever have been put forward by the Joint Deemed Official Receivers (JDORs) (Messrs Spratt and Simpson), the very persons (if I'm not mistaken) whose work is to be 'inspected' by the said Committee. Why would they do that? Their track record to date does little to suggest it was entirely in our interest. Surely it is the creditors - and they alone - who should be deciding who should represent them in this? What right did the JDORs have to attempt to influence the outcome in this way by suggesting to creditors who they should elect? Were they not supposed to be neutral? I was shocked by this Resolution from the start, but said nothing. Am I the only one?

For democratic reasons alone, and despite the fact that it would have guaranteed two seats on the committee for DAG, it therefore seems to me only right and proper that it was rejected by the creditors as a whole. Democracy is not to be tampered with in this way.

As to the final composition of the committee, I await with interest to see how PWC will interpret the voting rules, which (unless new ones were announced at the meeting?) appear to be well nigh inoperable (judging by the time it is taking to produce a result, I guess they must be having serious probems!). According to the Letter to Creditors of 30 June announcing the meeting, the places on the Committee are to be filled by "those nominees whose nominations are approved by a majority in number and value ..... and who receive the highest number of votes in number and value". So to get elected, a nominee first of all needs to have been voted for by at least 50% of those voting and 50% of the value of their votes. Many (if not all??) of the 11 nominees may have fallen at this first hurdle, meaning that there may be far less than 7 members elected; and there is no mechanism in place to add more. In the unlikely event that more than 7 nominees pass this hurdle however, the second requirement is totally unworkable - you don't need a Ph D in mathematics to see that putting the candidates in order by BOTH number AND value is impossible (you can do one or the other, but not both at the same time). Yet another almighty cock-up by those who are going to be looking after our interests for the next n years!

May the good Lord (or whoever or whatever you choose to believe in) preserve us!