Early Payment Scheme - Is this a poisoned chalice from the 'scheming' *!@*x!s?

  • Equus
  • 14/10/08 08/06/09
  • a depositor
  • Offline
Posted: Wed, 22/04/2009 - 12:51

I have just been reading the Guidance Notes to the Application for the £10,000 under the Early Payment Scheme. I apologise if this has been covered before but I am particularly concerned with the motive of the Isle of Man Treasury when it includes under details of its 'rights' Page 7: It...
"has the right to vote in relation to any restructuring or scheme of arrangement proposed by the Liquidator/Provisional in proportion to the payments made to KSF IOM depostors."

Does this mean that if the Liquidator/Provisional is in favour of the Scheme of Arrangement for example that his vote effectively allows the IOM Treasury to vote on it too?! And in proportion to its outlay!

If as may be the case over £100 million is paid to depositors in the Early Payment Scheme, it could effectively make the Treasury the largest voter.

In the light of my strong views against the Scheme of Arrangement, I am reluctant to make an application despite the fact that my wife and I are getting desperate for funds.

Can anyone on the Legal Team allay my fears? Is that clause to which I refer on page 7 as benign as it is supposed to be?

I'm sure many others have voiced their objections to the Scheme of Arrangement.
I haven't as yet so here goes:

The IOM Government's motive is undoubtedly to minimise the impact of the demise of Kaupthing and they want to do this at minimal expense and risk.
What better than a scheme that avoids liquidation (looks bad on the country's CV)
and gives them the moral high ground - look what we're doing for all these poor depositors - when they should have issued us with a 100% guarantee in the first place. Talk about Spin. 'Scheming' !@x!s!

  • They have calculated that with half of the £550 million coming back from the UK via Ernst & Young, the current balance in Kaupthing plus what they can claw back from the sale of assets and income from outstanding debtors, they can comfortably offer us up to 60% of our deposits and pocket the rest.

  • Given the long timetable over which the Scheme of Arrangement is run (a much longer time frame for any depositor with more than £35,000 than through liquidation and the DCS), ask yourself this; are they really be doing this as they claim 'for depositors'!

  • Under the Scheme of Arrangement, the Treasury also gets to claim expenses for establishing and running the Scheme. Guess where that money comes from.

  • It is not at all clear that should we accept the Scheme of Arrangement, that we shall not compromise our legal standing over claims for any shortfall or damages against any parties particularly the IOM Government, the Treasury or their officials in future.

  • Finally there are those that say that the DCS route is unsafe. Nonsense - Doesn't the Scheme of Arrangement call for the IOM Government to cough up 60% without the help of the banks? Could they really afford not only to allow a major bank to fail and go into liquidation, but then subsequently let the DCS fail too when they have contributions from other banks. I don't think so.

No I am dead against this Scheme and if you have suspicions about all the shananagins that went on leading to the bank's demise in the first place, you'll think twice before swallowing their line.


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