DCS & Agents of Misinformation

  • jkk
  • 10/10/08 31/05/09
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Posted: Mon, 23/02/2009 - 22:14

It is impossible to know if certain people are remunerated for the misinformation they spread, or if they are doing it for fun or perhaps out of sheer stupidity but it cannot be denied they have been incredibly active since the last court session of 19 February. They have been telling us that there are no funds in the DCS, that it will take 17 years to pay everyone, or that the scheme in general is as clear as mud. But what are the facts?

If liquidation had been declared at the last court session, the DCS would now be obliged to pay £240 million to all eligible depositors. Deducting the 10% dividend that Mike Simpson is ready to pay us since quite a while, this sum gets reduced to £216 million.

A further deduction has to be made for depositors with accounts of over £500k who will not be able to claim payment from DCS because from the dividend itself they will have received more than the allowable £50k. Using the data available on this site I estimate that there are approximately 400 persons in that situation, so a further £20 million deduction reduces the amount payable under DCS to £196 million.

As for the funding, first of all we have £150 million payable by the Treasury under the provisions of para 12A.(2) of DCS Regulations. Since these funds may only be used to cover the amounts above the first £20,000 we may assume that only half of it, or £75 million, would be available in our case.

Then there are bank contributions. According to Adrienne's list there are 36 banks in the IoM, 10 of which are exempt from the scheme. That gives us 26 banks required to pay the levy of 0.125% of their total deposit value per year. Assuming conservatively that the average bank has deposits of around £400 million, (which is less than a half of what KSFioM had before the collapse) that gives us a yearly contribution of £13 million, first payable before 31 March 2009.

And then of course we have the loan of £110 million approved by the Tynwald, which IoMG plans to distribute in the coming weeks as an EPS of £10,000. All together it adds up to a sum of about £198 million to cover £196 million payable under DCS, or in other words we have a modest surplus!

And all that could be paid before 31 March, which is in about 5 weeks, That's right; not in 2 years as in SoA, not in 17 years as some depositors(?) would want us to believe, but in 5 weeks.

Now, can somebody please explain to me why are there people on this forum who do not want us to receive this money? Are they stupid, are they on the government payroll or do they have a zany sense of humour?

And why would anybody in his right mind want to give up such crystal clear legislation as the DCS for a murky deal in Nigerian style, cooked up by professional scam artists?

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We Have the Right to Immediate Compensation

  • jkk
  • 10/10/08 31/05/09
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  • Wed, 25/02/2009 - 12:41

I am not aware of any other bank defaulting since this legislation has been introduced. Are you?


@jkk,No, but do you have a

  • expatfrance1
  • 15/10/08 31/05/09
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  • Wed, 25/02/2009 - 14:20

@jkk,

No, but do you have a crystal ball and can say that no other bank will default between now and October 2009?

You seem to think that the DCS is there just to compensate KSF depositors. It is not, it is there to cover depositors in all banks that have signed up to it so if any of those also default they would also want a share of the £150 million, or perhaps you would be able to convince them that KSF depositors should take preference.

Hopefully it will never happen but who knows.


You don't need a crystal ball

  • jkk
  • 10/10/08 31/05/09
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  • Wed, 25/02/2009 - 15:02

You don't need a crystal ball to know if a default has occurred. And "Where a default has occurred the Treasury shall pay to the Scheme Manager such sum as appears to it to represent the total of the amount by which the compensation payable in respect of each depositor exceeds £20,000."

This legislation is enforceable when a default HAS occurred. It makes no mention of waiting for other defaults to occur.


Again you pick and choose

  • expatfrance1
  • 15/10/08 31/05/09
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  • Wed, 25/02/2009 - 15:57

Again you pick and choose what you want to see.

As you have already stated the DCS rules state:-

(2) The total sum provided under paragraph (1) in respect of ALL defaults shall not exceed £150,000,000.

In respect of all defaults. This is all defaults that occure for the duration of the enhanced scheme that ends in October 2009. They are hardlly likely to pay £150 million now to KSF depositors if this is meant to cover ALL defaults, just in case another default were to occur which would require a share.

Talking about being enforceable. I suppose you could in theory enforce the DCS coming into effect but as far as I am aware, once triggered there is nothing in the DCS that says when payments must begin and for how much. In fact the scheme regulations state:-

The Scheme Manager shall determine the maximum amount which it is prudent to pay by way of compensation sums to depositors in any financial year of the scheme having regard, amongst other things, to —
(a) the amount of contributions for that year levied in accordance with regulation 12(1); and
(b) any Treasury funding due under regulation 12A.

So it look like all of this is down to the discretion of teh Scheme Manager.

All I am saying, if we are not in favour of the SoA because we do not know what that really means we had better be damn sure of all the implications of the DCS if we decide to go down that route rather than just making wild claims that the DCS will pay out in full by the 31st March if it were invoked.


IoM Playing Foul

  • jkk
  • 10/10/08 31/05/09
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  • Sun, 01/03/2009 - 15:03

I have not seen any wild claims on this forum that DCS will pay out in full by the 31 March, except in your post above.

What I keep repeating is that there is more than enough money available for immediate full payoff under DCS, which is an undeniable fact. Since only about a half of the Treasury's £150 million will be necessary in our case, spending it between October '08 and March '09 can indeed be only called prudent as that period represents exactly a half of the 12 months during which the Treasury funding is available.

Furthermore, much less than a half of that money will in reality be required, because a large number of depositors in the £250k to £500k group have no intention of applying for compensation.

That leaves us in a situation where the government has all the legislation and all the funding necessary to pay us by 31 March but for some reason does everything in its powers to avoid it.

Why? One can never be sure but I suppose it is simply much cheaper for them to pay AlixPartners and support a few shills on this forum than to fulfil their legal obligations towards the depositors.


jkk, In fact it was YOU that

  • expatfrance1
  • 15/10/08 31/05/09
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  • Sun, 01/03/2009 - 15:12

jkk,

In fact it was YOU that was making the claim that the DCS could be paid by 31st March in your original post:-

'All together it adds up to a sum of about £198 million to cover £196 million payable under DCS, or in other words we have a modest surplus!

And all that could be paid before 31 March, which is in about 5 weeks, '

You also repeat the claim in your post above that you know the intentions of a large number of depositors in the £250k to £500k:-

'a large number of depositors in the £250k to £500k group have no intention of applying for compensation.'

Next you will be claiming you can walk on water!


Shills Always Playing Foul

  • jkk
  • 10/10/08 31/05/09
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  • Sun, 01/03/2009 - 21:49

Your post makes it evident that my earlier title should have read: "IoMG And Their Shills Are Playing Foul".


& your point is jkk

  • skintagainnow
  • 10/10/08 31/05/09
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  • Sun, 01/03/2009 - 23:09

Repeated for the benefit of any who may have missed it the first time around:-

there's an old saying that goes something along the lines "he who cries foul loudest & longest, may have something to hide"

go away jkk and play your silly games on another forum somewhere more suited to your age group


dbl post

  • skintagainnow
  • 10/10/08 31/05/09
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  • Sun, 01/03/2009 - 23:10

dbl post


So why are the insurance companies currently favouring SOA

  • hopeful
  • 11/10/08 31/05/09
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  • Tue, 24/02/2009 - 21:22

Agree with you jkk. I hope I am wrong but I suspect that the answer to this question is that the IOMG have given some promise to the insurance companies behind the scenes.


Why Insurance Companies Favour SoA

  • jkk
  • 10/10/08 31/05/09
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  • Tue, 24/02/2009 - 21:47

The gift to the insurance companies is the inclusion of bondholders in the compensation up to £50k.

Also, governments in general do a lot of business with insurance companies, so they have plenty of opportunities to reward them with sweetheart deals in the future.


@jkk

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
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  • Tue, 24/02/2009 - 22:01

I thought I had heard this somewhere - where is the fact that individual bondholders will be guaranteed up to £50k written and detailed please?


Bondholders under SoA

  • jkk
  • 10/10/08 31/05/09
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  • Tue, 24/02/2009 - 22:47

I have to admit that I was simply repeating what bondholders themselves were saying on this forum; that under DCS they "get nothing" and under SoA they are compensated up to £50k. I thought, if they are satisfied that they are covered, they probably know what they are saying. But to tell you the truth, I was not able to find anything in IoMG affidavits that would confirm that information.

Could it be another rumour spread on purpose to garner more unfounded enthusiasm for the SoA?


re - Bondholders under SoA

  • skintagainnow
  • 10/10/08 31/05/09
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  • Wed, 25/02/2009 - 12:21

But to tell you the truth, I was not able to find anything in IoMG affidavits that would confirm that information.

Then you are reading but once again not understanding, as in your response to liebenk's & others letter to the court. Read and understand the possible implications of para 6 for >50k depositors, if my own calcs along with kiwi 38's, mike's & klaus's are correct. If on the other hand Ally's & undone's understanding and figures are correct then para 6 for >50K depositors will have no adverse effect. There is another possibility however that's highly unlikely as it's a fundermental issue of the SOA.

I for one & probably many others are becoming increasing bored with your constant insinuations that certain people are remunerated by, or in the employ of, the IoMG, but lets expand your conspiracy theory:- equally others could be in the employ or gain a remuneration from PWC - who will undoubtedly still gain more from a full liquidation than as scheme manager. These conspiracy theories are probably something we will never know for sure, however there's an old saying that goes something along the lines "he who cries foul loudest & longest, may have something to hide".

& just for the record at the present time I'm neither for or against the SOA, unless my calcs are corect & the insurance companies do succeed, then I'm most certainly against.


Sorry, skint, you're wrongagainnow

  • jkk
  • 10/10/08 31/05/09
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  • Sat, 28/02/2009 - 11:52

As you say, you are reading and not understanding. PwC are going to gain much more money from the SoA than from liquidation.

In liquidation the scheme manager has practically nothing to do with the liquidator and receives no remuneration from the liquidated assets.

If you read and understand the latest version of SoA however, you will see that Lovett has just confirmed that PwC will act as both the liquidators and the scheme administrators. And of course they will be remunerated for both of those functions. And guess what? They will be paid for both from our money!

That Lovett guy is a genius. Too bad he has been employed to rip us off instead of paying us in full. The London Team should consider hiring him as our lawyer.


re - Sorry, skint, you're wrongagainnow

  • skintagainnow
  • 10/10/08 31/05/09
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  • Sat, 28/02/2009 - 16:06

jkk - stop being a complete pillick - under SOA there is NO LIQUIDATION HENCE NO LIQUIDATOR -- or is that just too difficult for you to understand being one brain cell short of an amoeba.

It is the intention of the IoMT (we are led to believe) to appoint in their place "if a SOA was accepted" Price Waterhouse Cooper as "the scheme manager".


Skint, despite all the

  • jkk
  • 10/10/08 31/05/09
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  • Sat, 28/02/2009 - 17:32

Skint, despite all the nonsense you write in favour of SoA I have to admit that you do not give the impression of a government shill. I therefore accept your ignorance as genuine and offer you the way out of your confusion this one last time. Please open the 4th affidavit of David C Lovett on page 3 and read the footnote about the Liquidators Provisional remaining in office whilst simultaneously acting as Scheme Administrators.

To put it simply, SoA is a liquidation and a depositors compensation scheme combined into one single process. Why is it so difficult for you to understand?


are you actually for real, or

  • skintagainnow
  • 10/10/08 31/05/09
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  • Sat, 28/02/2009 - 19:37

are you actually for real, or just really pigheaded.

Go read ALL the court papers again / cross reference each between the various documents / affidavits / legislation, have a dictionary handy and use it you simply do not have the ability at this present time to fully understand the arguments in front of you.

BTW -- something else you neglected to see I'm neither for or against a SOA --


For the record...

  • Anonymous
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  • Wed, 25/02/2009 - 14:40

since my name has been referenced here, let me state that I am not in the employ of anyone. I am a retired Finance Manger, in his mid-70's living in Canada and who has more than £50,000 at stake.

I have yet to make up my mind whether I will vote for the SOA or the DCS but I will voice an opinion when those on this site spout off and condemn either of the schemes with what I believe to be unfounded facts. The SOA, as it has been presented to us, is not clear on several issues - treatment of Bondholders, Rights of creditors vis-à-vis those enshrined in the DCS and the conversion date for foreign exchange accounts. However, there are also many unknowns about the DCS, such as how much is readily available for immediate payouts, how much of that which is available will be held back to meet contingencies, how much will be used to meet the Liquidator's expenses and when will the available monies be distributed. Instead of condemning one scheme or the other, bad mouthing governments for actions that we don't know for sure they are guilty and pointing fingers at depositors because they might have a different opinion , why don't we try to identify those areas that need to be questioned and ask the London group or the provisional liquidator to clarify. The bi-weekly telephone meetings conducted by Frog is providing some answers regarding the DCS, why can't the same be done for the SOA. I would suggest to those that seem to be anti SOA, spend more time to identify what they would like to see introduced or amended in it. That sort of activity may be beneficial to all.


@ undone

  • skintagainnow
  • 10/10/08 31/05/09
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  • Wed, 25/02/2009 - 15:14

undone, I only mentioned your name in conjunction with Ally as formulating an alternative and hopefully more accurate financial picture of the SOA proposal.

Almost thought I was back in employment for a little while there - engineers differing with finance over budget expenditure & in Feb too, just in time for end of year reconciliations -- "sort of" situation normal.

I agree, no one at this present time has enough information of both schemes to make any decisions re - preferred route, both options have wide gaps in their interpretations, implementation of either - both untested, nightmare waiting to happen.


@jkk

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
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  • Tue, 24/02/2009 - 22:56

I am as cynical as you I am afraid. This is a key point that needs formal clarification over the next day or so.

Ally - perhaps you could e-mail Mr Spellman for clarification and report. Could you please also ask the question about other asset classes and any proposed increase in the SOA g'tee to £50k? Perhaps they intend to lift the SOA g'tee for all account holders, regardless of asset class (personal, bond, company, trust, partnership, etc) to £50k? Or perhaps as JKK has suggested the IOMG has no intention of making any changes in the SOA over and above what would be available in the DCS but somehow a rumour has leaked to this forum? Clearly formal clarification is needed asap.


kiwi38 - Bonholders

  • Ally
  • 13/10/08 31/05/09
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  • Tue, 24/02/2009 - 22:17

kiwi38

I'm with you on this one. I think it has been often mentioned, I'm sure the Insurance Companies advocate brought it up in Court as part of their "wish list" of amendments, but I am sure it is not in the current SoA.


@Ally

  • kiwi38
  • 11/10/08 31/05/09
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  • Tue, 24/02/2009 - 22:33

Yes there seems to be some confusion as I thought I had heard that under a SOA bondholders would be treated as individuals therefore all up to £50k are fully repaid. If the SOA works as you outlined yesterday then that is probably not an issue as the IOMG will top up any required payment to the £50k level however if the SOA works how I think it will then it is a big problem as effectively the High Value Depositors would be paying for this move as I showed yesterday in my example - i.e once we hit 60% payback the IOMG gets all funds until their £150M is repaid (in my example I think it showed High Value depositors getting back 62% even if 80% of KSFIOM assets were recovered). Please note I do not have certain facts or accurate numbers so this is just an illustration. Clearly we need official clarification re how and when the IOMG start to recoup their £150M under the proposed SOA.

If the SOA g'tee top up payment to £50k is as you understand it to be then it is hard to understand why the IOMG will allow bondholders to be treated as individulas as this change will cost them many tens of millions.

The other thing that gets to me is why single out this asset class for a change of treatment under the SOA? I have a business account ( a one man company) so under SOA why doesn't my guarantee increase from £20k to £50k if that is being suggested for all bondholders?


@kwi38

  • Ally
  • 13/10/08 31/05/09
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  • Tue, 24/02/2009 - 23:00

Without wanting to offend bonholders I would think it would be very difficult to let them stand as individuals in a SoA, as, as you say it would make it difficult to turn down calls for special consideration from other assets classes. I can't see it myself.

Re: Clarifiaction on SoA IoMG know clarification is needed, hopefully this will come shortly, but they haven't been quick with information in this mess so far, so who knows.


Bastard Creation Called SoA

  • jkk
  • 10/10/08 31/05/09
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  • Tue, 24/02/2009 - 23:25

How about dumping entirely this bastard creation called SoA in favour of a liquidation with immediate compensation to which we are legally entitled?


SOA slower than DCS???

  • Elisabeth
  • 24/01/09 31/05/09
  • not prepared to answer
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  • Tue, 24/02/2009 - 21:06

I'm not sure I understand. Does it mean SOA is going to pay us in two and a half years what we we could get from DCS by March 31st??? That can't be possible. Are there any experts out there?