Everyone Please Read This re - SoA Urgently

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
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Posted: Thu, 30/04/2009 - 20:22

Dear all,

I am back again, later than intended by about 7 days to give once again my thoughts on why even with certain questions unanswered we should go for the SoA - and please remember I am a large bondholder (as said many time previously). But hopefully unbiased as I can be re our situation.

Below I list my thoughts on the latest Scheme of Arrangement and the latest Explanatory Statement with comments, questions plus other questions to all who matter.

And as always the best to everyone in this horrendous situation - which might be looking slightly better with the 50p pus from KSFUK, the latest on the court action on the £10m CD and the IOMG/T upping the SoA to 70% (if distributions reach that limit) prior to 'clawing back ' their Top Ups. And who knows with this other £10m perhaps our esteemed M Simpson might up the 1st payment to above 14p - as he should and perhaps the IOMG/T upping the 70% higher again - who knows?

God bless to all,

Gordon 45

Hello all,

We are as expected seeing different factions coming out and asking for people to vote with them re Liquidation or for the Scheme of Arrangement. Unfortunately from my viewpoint – which is only mine, I am perturbed at the stance the DAG Strategy Team and Adrienne (and a group) of the HNWDepositors are taking. We are all extremely worried, and rightly so and the news from KSF- UK although welcome is not sufficient at this stage to lighten our worries by too much until we see money coming back to us - and on what estimated dates (other than the two given under the SoA). I still feel that people are being very emotional about the IOMG, and as a Bondholder our thoughts on the life Companies. But as said before if that is the safest and best route that we should take at this time – then we take it.

I personally want to see if possible, my 70% back in my accounts ASAP, what I don’t want is Liquidation and all the uncertainty that goes with it. When and if I get back to 70% I will then worry about the remaining 30% - and I need that 30% as much as anyone else.

I would have thought that by having two dividends now rather than three, it ensures all protected depositors who invested up to £50k, are guaranteed their money back by 1st June 2010, (according to the latest Explanatory Statement), far better than a Liquidation with no set guarantees yet but also benefit all others – Bondholders/HNWDepositors etc.

I still think certain questions need answering by the IOMG/IOMT and the Liquidators Provisional immediately, to help those of us who may be keener to go for the SoA to definitely decide on that course of action and to perhaps also persuade others who are not yet convinced either way to definitely go for the SoA.

Things are looking slightly better thanks to the expected return from KSF – UK and the court decision in our favour re the CD worth £10m. Hopefully now there will be no other court cases involving the remaining £25m in CDs.

What does seem unfair on part of Liquidators Provisional is the now expected 10p in the £ return from KSF – UK giving us £36.9M in June this year = 4p in the £ to us. If you add the £36.9m to our £156m = £192.9m or 21.28p in the £, and all the Liquidator Provisional has done is said he would increase the 1st payment from 12.5p in the £ to 14p in the £. Why not give us at least the full 4p in the £ extra, and give us a first payment of 16.5p in the £? Still leaves him 4.78p in the £ or £43.3m in the kitty to keep paying costs etc, as well as capital and interest still coming in from the loan book.

So to the IOMG/Treasury and the Liquidators Provisional are you willing to clarify the few points I list below under ‘Explanatory Statement’ to help all Scheme Creditors decide whether or not to go for the SoA option?

Remember that other £10m from outstanding CDs which appears is ours now equals 1.1p in the £. Surely if that makes it likely the remaining £25m in CDs is coming back that equates to another 2.76p in the £. Then the Liquidator Provisional could increase the first dividend from 12.5p to the suggested 16.5p+ the other 3.86p = 20.36p in the £ that would make a massive difference to those creditors who are in the HNWDepositors group, the Bondholders and also diminish the requirement from the IOMG/T for the ‘top up’ in the first dividend? How about it you accountant gurus?

Based on this further change regarding CDs – is the IOMG/T willing to look at upgrading the base at which they will recoup their ‘Top – Up’ payments from 70p in the £ up to say73.5p or 74p in the £?

Below is a slightly modified update of my previous thoughts on certain parts of the latest version of the Scheme of Arrangement, followed by statements/questions I feel need raised about the latest version of the Explanatory Statement.

Thoughts on Scheme of Arrangement Document issued on 27th April 2009 and the Explanatory Statement issued at same time

The Scheme – Statements and Questions from various parts that I feel are relevant

The Scheme – Part 2

  1. Purpose of the scheme

6.2 Treasury will make top up payments to protected scheme creditors – good for protected and non-protected including Bondholders including HNWDepositors.

  1. Moratorium

8.1 No change from D Lovett’s 3rd affidavit
· If SoA - cannot claim against KSF-IOM
· Not good for Bondholders/High Net Worth Depositors (HNWD)
8.2.2 – But retain right to all other 3rd party claims – good for Bondholders/HNWD

  1. Winding Up

9.1 Subject to 9.2 – The Company will remain in provisional liquidation during the term of the Scheme. – Good for all Bondholders/HNWD.
9.2 + 9.2.1 & 9.2.2 – Provisional Liquidator can apply to the court-requesting petition to wind up the Company and appoint a Liquidator. – Good for all bondholders and HNWD.

The Scheme – Part 3

  1. Realisation of Assets by the Office holder

10.3 The Office Holder – Is Provisional liquidator - Good for all creditors
10.4.1 – Sale of Loan book must be approved by treasury & creditors committee - Good for Bondholders and HNWD.
10.4.2 – any release of rights/claims against KSFUK and/or Kaupthing Bank hf needs written consent of treasury and creditors committee - Good for Bondholders and HNWD.

  1. Application of the assets – General

11.3.3 Pari Passu distribution to Scheme Creditors – Good for Bondholders and HNWD as the IOMG will put in ‘Top Ups’ plus hold back recouping this money until all scheme creditors reach 70% return.

The Scheme – Part 4

  1. Payment of Distribution

15.1.1 & 15.1.2 & 15.1.3 & 15.1.3 – Good for all Protected Depositors, helps the Bondholders and HNWD, in that it gets the payments out more quickly to all those due up to £50k including HNWD. But also allows quicker return of cash to Bondholders & HNWDepositors. Fails in showing more estimated dates of distribution for Bondholders and HNWD after 2nd distribution.

Surely Provisional liquidator has some idea of Loan book Returns over the 6 years, and has to take some form of guestimate on estimates re CDs (now won 1st court case involving £10m, leaves three more CDs totalling £25m – they might not go to court now?) and KSF – UK (we now expect 50p+ in the £ with the 1st 10p in the £ due back in June 2009). And can therefore estimate dates for 4th, 5th and 6th distribution and some idea of year of final distribution? – Poor again for Bondholders and HNWD – but no worse than liquidation.

15.4 Use of Pari Passu distribution as fair as can be, allowing for the fact that up to £50k individual depositors & HNWD are guaranteed up to £50k as protected depositors. But no different from Liquidation.

  1. Conditions Precedent to each Top-Up Payment and Reporting

16.1.1 & 16.1.2 – Good if made available to all creditors

  1. Top-Up Payments

17.3 & 17.4 & 17.5 – Although not fair on Bondholders, it does get those up to £50k depositors and the 1st £50k of HNWD dealt with. So that any cash coming from the Company is then given to Bondholders – Pari Passu until they catch up with the other HNWD (unless I am reading it wrong?). No guarantee of when payments would be made under Liquidation and how often.

  1. Assignment of Scheme Claims and Treasury Payment Directions

I see no problem with IOM Treasury being assigned these rights and as said previously, Bondholders will be allowed to ‘catch up’ re Parri Passu with HNWD and IOM Treasury until 70% reached.

  1. Early Scheme Payments and Set Off

If depositors/Bondholders have applied/received early payments through EPS1 & EPS2 then the IOMG are entitled to take on these rights and reclaim such.

  1. Currency of Payment

25.1 – For depositors/Bondholders who used foreign currency in their deposits – this change in SoA to 9.4.2009 may not be good for all. Especially for those high value Bondholders and HNWD.

  1. Rights of Interest

27.1.1 & 27.1.2 – For any fixed term Bondholder this is not good news, as I am sure the 5% rate applied will be lower than they contracted for. But in relation to the loss of their investment it will be of lesser concern.
27.3 – Small ‘crumb’ of comfort for high value bondholders & HNWD if they get that lucky.

  1. Set - Off

Good for all – if I am reading it correctly.

The Scheme – Part 5

  1. Duties and Powers of the Office Holder

Good for all.
30.3 – Would have liked to see a quarterly or ‘4 monthly’ feedback from the Office Holder & Scheme Supervisor rather than ‘6 monthly’ feedback.

  1. General duties and powers of the Scheme Supervisor

31.1 – Good for all especially Bondholders and HNWD as control not given to FSC.

The Scheme – Part 6

  1. The Creditors Committee

33.2 – Five members to small – need at least 1 Bondholder (preferably higher value) and 1 HNWD – unless the Protected Depositor is a HNWD.
33.3 – MS/P Spratt should be encouraged to ensure what I have said in 33.2 is adopted at least. The Committee should also include one of the senior DAG Committee members and perhaps the DAG lawyer.
33.8 – Meetings to infrequent, at least quarterly or ‘4 monthly’ and all minutes available to all residual Scheme Claimants.
33.10 – The quorum is only ok if the Protected and Non - Protected depositors present – if not could be bad for Bondholders and HNWD.

The Scheme – Part 7 - Releases

No comments

The Scheme – Part 8 – Miscellaneous

No comments

Thoughts on Explanatory Statement Document issued on 27th April 2009

Statements and Questions from various parts that I feel are relevant to this Document

Summary of Proposal

· Bullet point 3 – page 2 – Speaks about the Liquidator being able to approach the Court to place the Company in liquidation if he feels that certain claims can only be done by a Liquidator. Must consult first with Treasury and the Creditors Committee. In doing this the Scheme would continue – in my opinion this is good for all creditors.
· Bullet point 9 (last point) – page 2 –
o Re deferment of ‘Top Ups’ – by Treasury until all creditors have received 70p in the £. Could I clarify will repayments to the Treasury at this point equate to 70% of what they are owed or will they reclaim all they are due at this point?

o And if only taking 70% at this time would they then stand in line with all other remaining Scheme Creditors and receive payments – pari passu either until all receive 100% or the limit available for payout?

How does the Top-Up payment work?

· Just to clarify here – are the IOMG/T still saying they will put in up to £150m in ‘top ups’ if required, or more than that if required?

Part A – Introduction

Point 6 – Proposed Timetable for Implementing the Scheme

· Can I ask why are there no indicative dates for distributions beyond the first two. If you go back to D Lovett’s 3rd Affidavit there was three scheduled payments followed by another three giving indicative dates. See below - Why have been omitted now?

3 Scheduled dividends under Scheme of arrangement – Key Elements
i. 1st Dividend within 3 months (page 6 – 26.1.09 – Approx Aug 2009 for non protected depositors – 12.5%
ii. 2nd Dividend within 12 months – May 2010 – again for non protected depositors – 7.5%
iii. And 3rd Dividend approx 2years – Aug 2011 – 15% giving total of 35%.
iv. 4th Dividend – 3 years - Aug 2012 – 15%
v. 5th Dividend longer term – 10%
vi. 6th Dividend longer term – 5%

Part B – Implementing The Scheme of Arrangement

Point 13 – Currency Translation for Voting Purposes

Concerns here about the foreign exchange rate used to translate creditors with deposits in foreign currency into GPB as at 9.4.2009. This may be detrimental in some cases as against the date of 9.10.2008 for this purpose. Is the Liquidator Provisional prepared to give any guarantee of no loss using the different date?

Part C – The Provisional Liquidation

Point 16 – Provisional Liquidation

16.4 – Sale of loan book at KSF – IOM. Point states sale requires consent of Creditors’ Committee and the Treasury, unable to agree would then go to the Court – understand that, But – then says ‘Provisional Liquidators remain open to considering offers for all or part of the Loan book but any offers received would need to be benchmarked against what is estimated will be recovered from a work out of the Loan book’. Can I ask the LP what this means in reality?

Point 17 – Update on the Provisional Liquidation

17.3 Certificates of Deposit – just logging here that the court case for the CD worth £10m came out in favour of KSF-UK and KSF-IOM. Spoken about above.

17.4 Advances to Customers –

· Can we clarify some points here – firstly how much can Liq Prov expect back in interest per year from 2009/2013?
· How much capital repayments can he expect each year from 2009/2013?
· Are there any capital and interest repayments due beyond 2013?

17.4.2 Is it true to say that any ‘set-offs re the £20m will affect the above estimates in 17.4.1?

17.53 & 17.5.4 – These two sub points deal with the share capital of JJB Sports Plc. These shares were sold on by Liq Prov on behalf of KSF- IOM. Point 17.5.4 discusses the sale and the entwined indemnities surrounding this sale and finishes by saying that the end result is their inability to make a distribution of the sale proceeds for the relevant period. Would the Liq Prov put this into normal speak and show figures as to what this eventually means to Scheme Creditors please?

17.6 Amounts owed by KSFUK –
· The two figures of £565m owed to KSF-IOM and the £164m owed to KSFUK by KSF – IOM are shown here.
· What I am not clear about is on the balance statement issued by the Liq Prov for 8.10.2008 that showed what had been returned overall to KSF-IOM these two figures were shown and then a Net figure of £401.8m due to KSF-IOM.
· But on the updated figures shown on the new update as at 31.3.2009 this net figure has gone down to £369.7m.
· Has this change been caused by the insertion for the first time of – ‘Share collateral in respect of repo agreement’ of £154m in the assets side of the statement?

17.8 – Dividend return

· The difference between the return of £36.9m from KSFUK at (10p in the £) to KSF-IOM means 4p in the £ but Liq Prov has only increased the first Distribution from 12.5p to 14p in the £ - has been discussed above.

18 – Cost and Expenses of the Provisional Liquidation

· It says the Provisional Liquidation will continue throughout the life of the Scheme and that the court provides for the costs and expenses of the Prov Liquidators to be approved by the court – fine –
· But what are costs of Bank staff from 8.10.2008 up until the present?
· What are the very approximate costs of Bank staff until end of Scheme of arrangement?
· What are costs so far for the Prov Liquidators and their ancillary costs i.e. lawyers in UK, travelling etc?
· And what are the very approximate costs for the Prov Liquidators and other ancillary costs between now and the end of the Scheme of arrangement – (around 2013/2014)?

Part D – Role of Isle of Man treasury and the Top-up Mechanism

No comments/questions

Part E – Worked Examples of Payments to be made under the Scheme

Point 23 – Examples of Possible Returns to Scheme Creditors based upon a range of outcomes and claim values

23.5.4 – I note that the ‘Three Asset realisation scenarios’ used in the 5 sets of graphs show a return of high – 90.3%, medium – 86.6% and Low – 75.2%. And as other people have said before me – is this an indication now of what we can perhaps expect? In my own lay man estimates – previously posted on the DAG I estimated a recovery of 83.59% based on £200m back from KSFUK, a guess of a return of £43.2m (85%) on the CDs (based on replies by M Simpson) an 85% recovery on KSF-IOM loan book (again based on replies by M Simpson), and £80m input by the Banks over 8 years less cost of £30m for Prov Liquidators including Bank staff and now a further cost of £7.9m based on a subordinated right by IOMG/T of £2.8m instead of £10.7m as originally stated. That would lower my estimate from 83.59% to 82.7%. But who knows?

Part F – Outline of the Key Terms of the Scheme of Arrangement

Point 24 – Purpose of the Scheme

24.1 – Purpose of Scheme to ensure that all Scheme Creditors (whether protected Depositors or not) have the opportunity to receive larger payments by way of distribution more quickly than may have been possible in a liquidation – I agree with this statement.

Point 26 – Post-Insolvency Costs

This refers to the costs of the ‘Office Holder’ and ‘Scheme Supervisor’ – As asked above what are the costs so far and also the rough estimation of expected costs of M Simpson & P Spratt?

Point 32 – Distribution under the Scheme

32.2 – Sub points 32.2.1/32.2.2/32.2.3 – These relate to the Distribution dates for payments to Scheme Creditors – now only two dates given instead of three up until now and even then as said previously in D Lovett’s 3rd Affidavit – it gave dates for 4th & 5th Distributions and listed a 6th with no indicative date. Question has already been asked above for further indicative dates to be given, so we can see a fuller picture regarding returns (at least by date, if not value).

Point 33 – The Top up Mechanism and Assignment of claims to the Isle of Man Treasury

33.10 – Says Treasury will receive no payment until all Scheme creditors have been paid 70% at least in the £. Again looking for clarification if at that point IOMG/T will ‘claw back’ only 70% of what they are due or will they claim back the full 100% they are due? Already asked this question above.

Point 33.12 – how does the Top up Payment Mechanism work?

I thought this new additional material inserted, was very good at explaining how distribution payments will be made to the various classes of creditor. And when individuals ‘kicked in’ for pari passu payments if they received ‘Top –Ups’ during the first two payments.

Point 33.12.6 – At the end of this section there is a statement made that the ‘Treasury will never recover the entire amount paid by it by way of Top-up unless all Scheme Creditors recover 100 pence in the pound’. That seems to suggest they only take back 70% of what they are due when all others get that, then anything else given out is pari passu to all remaining Scheme Creditors including IOMG/T – But I would like this statement clarified please?

Part G – Management of the Scheme and the Provisional Liquidation

42 – The role of the Creditors’ Committee

This point concerns the powers of the Creditors’ committee and the make up of this Committee plus how often it will meet. It is discussed above in Part 6 of the Scheme and various questions and comments are made there.

Appendix 1 - Summary of Balance Sheet as at 9 October 2008 and Receipts and payments to 31 March 2009 in the Provisional Liquidation

· Two points here - New inclusion of £154m in the assets shown as – ‘share collateral in respect of repo agreement. This was not shown in the original statement given out by M Simpson as at 8.10.2008 with receipts and payments up to 31.12.2008. I wanted to ask if this has anything to do with the shares of JJB etc that came into the picture at some point in time?
· Also as said previously the net figure due back to KSF-IOM from KSFUK after ‘set off’ appeared in the first table on 31.12.2008 as £401.8m. This has now gone down to £369.7m. Can I ask why?
· And is it in any way connected to the ‘share collateral’ insertment this time round?

Appendix 2 - Notices and Forms

I have no comments to make regarding these – as a Bondholder I have no input or say as to how they are filled in by the Life Company who are seen as the ‘depositor’ in this instance (sadly).

Appendix 3 – Exchange Rates Table for Voting Purposes

Thankfully (if anyone can be my investments were made in GBP). I am not sure how the rate of exchange as at 9.4.2009 affects each individual depositor. But I am sure it must affect some adversely. And I feel that if that is the case the IOMG/T plus Liquidator Provisional should rectify this anomaly immediately as I am also sure some rates have moved significantly against depositors.

Last few points –
· If (heaven forbid we don’t get back as much as 70p in the £) every HNWDepositor and Bondholder will gain due to the fact that the IOMG will not retrieve all subordinated rights brought about by the Top Up Scheme – a sad but true statement.
· Now being a lay- person and perhaps not understanding, reading things properly, I may have missed important points in the documents supplied. I apologise if I have. But having read through what was obtained I do not see reference to the Banks starting to input their £9m in year three – as the IOMG/T are putting in £19m to cover the first two years. Would IOMG/T and/or Liq Provisional correct me if I am wrong?
· Also do not see anything re Banks agreeing to put up the £9m per year for 8/10 years or until stopped by IOMG. – Will this happen? Could obviously have an effect on Bondholders and HNWD.
· No guarantee of any return under DCS and HNWD only guaranteed £50k.
· The £150m from IOMG not guaranteed under DCS if another Bank fails before October 2009 – so SoA definitely better for everyone including protected depositors of up to £50k as it could take longer to get their cash back.
· Good for Bondholders that M Simpson & P Spratt would be Scheme Supervisors rather than FSC.
· And also because MS/PS are retained as Office holders then Scheme Supervisors but still under ‘Prov Liquidation’ that means can go back to the Court for liquidation if required to pursue 3rd Party Claims – good for both Bondholders and HNWD.

Apologies again for the length of this document, but I feel it is important to put across how I feel, not only for myself, but for all others just in case I can help them through a non biased approach (I can assure you) to make up their minds – and lets hope we all win

Gordon 45

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Advise from my life company

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
  • Offline
  • Mon, 11/05/2009 - 09:19

At last my Insurance company have sent me a copy of the SOA with their comment that its a jolly good idea to vote for the SOA because under the DSC system we are only entitles to a share of 20K pounds...............how biased and misleading can one be..............

Reply From Royal Scandia. Talk about sitting on the Fence !!!

  • madmax836
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Mon, 11/05/2009 - 10:16

Dear Mr Madmax 836

Thank you for your comments

1) I cannot comment on any actions of the Isle of Man Government
2) The Ernst & Young report only confirmed that there would be a return of 10p in the £ in June/July. They have estimated a return of 50p in the £ dependent on market forces
3) Again I comment on this only that as a member of the Creditors’ Committee Royal Skandia will continue to lobby for a 100% return of account holders deposits.

Michèle Pringle
Customer Helpdesk
Royal Skandia Life Assurance Limited
 Email: RSKFMCustomerHelpdesk(?)royalskandia [dot] com
 Tel: +44 (0)1624 655465 (direct)
 Web: www.royalskandia.com
 please don't print this e-mail unless you need to
This message is confidential and for use by the addressee only. If you are not the intended recipient, you must not use, disclose, distribute, copy, print or rely on this message. Please notify the sender by return email and then delete the message from your computer. Royal Skandia accepts no responsibility for changes made to this message after it was sent nor for any loss or damage from receipt or use.
Royal Skandia Life Assurance Limited - a member of the Skandia Group of Companies - Reg. No: 24916 Isle of Man - Registered Office: Skandia House, King Edward Road, Onchan, Isle of Man IM99 1NU, British Isles - Regulated by the Personal Investment Authority for UK Investment Business - Member of the Association of International Life Offices

Good afternoon

I refer to your letter dated 22/4/09 from Mark Halewood General Manager, re KSF IOM.

My name is Madmax836 my Bond Policy No is .......................

I would like to reject the SOA as proposed by the IOM government, due to the fact

  1. Why after the depositors receive 70% of their money, does the IOM gov then take their money back in full and only then, they would distribute the remainder to the depositors (if there is any left)
  2. After the news from E&Y receivers in Britain for KSF, that they expect at least 50% of the monies to be returned to the IOM. The IOM gov then up their SOA from 60% to 70%
  3. I feel that the IOM gov as with every other gov in Europe ensure that ALL depositors are guaranteed their 100% back. Then and only then, they can take any monies that they have put out back. We as innocent depositors should not suffer. If they do not , I feel that the bad press will affect their financial institution forever.

I look forward to hearing from you

Best Regards

Madmax 836

SOA analysis

  • Equus
  • 14/10/08 08/06/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 09:42

The Scheme of Arrangement as laid out in the Summary of the Proposal (as it claims not a definitive document) nevertheless could hide some nasty surprises. For example, why on the first page does it make a point of the Treasury agreeing to:
subordinate its pre-winding up petition UNSECURED claim against the Company (of approximately £2,800,000 ).

I am no lawyer but the question needs to be asked: Does the Treasury get a bite of the cherry under the scheme that it would otherwise not get? In other words once it has fulfilled a 70% return obligation to SECURED creditors, can it then claw back not only the Top-ups and admin costs but money which would normally come to us as on-going dividends until SECURED creditors (read Depositors) have been paid in full and BEFORE UNSECURED claims can be met?

Even if legal analysis proves me wrong on this point, I am deeply suspicious of the Treasury's motives behind the whole scheme. For example, we are led to believe that there is an issue with the security of DCS payments. If the Treasury is now prepared to bare the full financial burden of the DCS commitment why didn't they simply pronounce that they would underwrite the DCS under liquidation and avoid this whole Scheme debacle. Timing you say. Well I don't know what others are reading, but the timing of payments doesn't seem to be significantly different except perhaps for small depositors.

It just seems to me that the Treasury (apart from saving the IOM Government some embarrassment) is playing on people's ignorance of the process of Liquidation and their insecurity as a result, to push through a scheme which is hugely advantageous to itself and the IOM Government. I mean for a start the scheme adds another total layer of administration with all its inherent costs. Are these costs really to our benefit?

I cannot believe with the legal and information resources that the Treasury has at its disposal (the Liquidator/Provisional must have been very close indeed to have agreed to the appointment as Scheme Manager) that they would be offering a 70% return if it didn't KNOW that this is a safe level to offer.

In other words we should TAKE GREAT COMFORT from this and go ahead with Liquidation, it will costs us less and it should secure us the maximum possible. Simple conclusion - because its the law. No other snouts in the trough until we have been paid as much as there is or in full.

Creditors' Committee.
I think we are entitled to a Creditors' Committee anyway under Liquidation and its power will lean towards the SECURED creditors and its decisions and votes will be entirely dedicated to maximising returns to depositors. Under the scheme we are being asked to give up 20% of this decision making to the Treasury. Why would we do such a foolish thing?

I feel insecure like everyone else. I'm no gambler either, but I'm not going to be railroaded in two weeks into something which I will regret for years to come.


Pain & Suffering!

  • Anonymous
  • Offline
  • Fri, 01/05/2009 - 08:13

Whilst I understand what you are trying to do to give us more Clarity Thank You! it does Not EXHONORATE the fact the PAINand SUFFERING some of us have had to endure in this whole Affair!

Why on earth are thes people allowed to get away with what' s been done..
Here we are all squabbling about how much Money we can get back when this has made a lot ofDepositors and relations Very ill, due to the Knock on effect...APOLOGIES are not acceptable from PM and the IOM T this is ONLY words these people are a Bunch of Idiots, they do not have a Clue what they are doing as far as I am concerned its a Matter of TRUST I have NONE in these Pirates floating in the Irish Sea!!!!

Disgusted! and FED UP!!


@ Aurora

  • German Mike
  • 13/10/08 31/05/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 09:39

Of course the IoMG are unforgivable in respect of the misery they have caused, and I understand your wish - anybody's wish - to make thesuffer for it.

However, the sad fact is they are the ones with the money, or more precisely control over our money, and doing things which achieve no more than make life uncomfotable for them is invariably counterproductive. By way of example, what exactly was achieved by giving Alistair Darling a pasting in the TSC? Nothing more than increase his dislike of the offshore industry, and increase his determination to have the upper hand.

Of course we shouldn't roll over and play dead, but getting our money back - all, or a significant percentage - quickly, or at least before some of us shed our mortal coil, is by far the most important need. For this reason I am voting SoA as seeming the quickest route, and I am trying to supress what I feel about politicians in the meantime.

Hang in there, and keep taking the Vallium!

Best wishes,


Alistair Darling and the TSC

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 15:24


I don't disagree with some of what you say but I'm afriad I cannot agree that giving Alistair Darling a pasting at the TSC meeting did not achieve anything. In part it resulted in the following statement in the final report :-

"If the Chancellor feels that there has been an element of tax evasion, then HMRC
should investigate and prosecute those involved. Furthermore, whilst the Chancellor
appears to deprecate the use of offshore banks by British citizens, we note that the FCO
carries advice on its website for those retiring abroad that “you may want to … consider
the benefits of offshore banking before you retire abroad.An offshore bank account
can play an important role in helping to minimise your tax liabilities"

In the world of senior politicians, such a statement in an official report is about as close to a slap around the head as I think you'll see.

@Aurora // Pain and Suffering

  • Anonymous
  • Offline
  • Fri, 01/05/2009 - 08:38

If you want "further pain and suffering" then vote against SoA.

If not, then vote YES, ie for the scheme.

(Don't let your evident and, with respect, irrational hatred of IoM cloud your judgement.

If you are <£250k read the SoA and get your calculator out and vote accordingly.

If you are not, then make your own decision based on your own circumstances and risk aversion.

If values prove to be greater then everything may be rosy.

In the present crisis with uncertainty increasing (not decreasing) the return just may be greater.

But if lightning strikes twice the pain and suffering will really start and it will NOT be the IoM'S fault.

Bobby Shafted's pain and suffering

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Mon, 04/05/2009 - 17:10

Bobby Shafted what you have written makes no sense (read nonsense).
You can not have read the SoA if you really believe this "Scheme" will prevent further pain and sufffering.
The SoA is jampacked full of loopholes and uncertainties. If you are a depositor with <£50k these risks are perhaps worth taking. Larger depositors should think not just twice but a hundred times before signing up for the SoA. By the way where did you pick up the erroneous idea that the dividing line is at £250k?
It is possible that depositors with up to £120k may have a very small (but uncertain) financial advantage through the SoA but the up to £250k figure is not supported by any facts!
The LP could easily pay dividends worth 20% between July and September if he wanted to do so. For a depositor with £250k this would be worth £50k. A lot more than he would get under the SoA.
The only reason the LP will not confirm that he will be able make such a distribution is to make the SoA appear more attractive!!!!
Remember the LP could already have paid us a dividend of at least 12% (worth £30k to a £250k depositor)earlier this year if it had not been for the manipulations of the IOMG in preventing the liquidation of the bank. Do you really want your destiny controlled by a government which will use its powers under the SoA to control the actions of the LP to the ultimate disadvantage of many of the creditors of the bank?

When comparing the SoAScheme

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Mon, 04/05/2009 - 17:46

When comparing the SoA with liquidation, it may be worth considering how joint account holders would be treated under liquidation. An account with two account holders and a deposit of £250k would receive £50k if the first dividend was 20% under liquidation.

Under the SoA they would receive £70k at the first dividend (2 x 35k).

Hear Hear

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Mon, 04/05/2009 - 17:24

The LP could easily pay dividends worth 20% between July and September if he wanted to do so. For a depositor with £250k this would be worth £50k. A lot more than he would get under the SoA.
The only reason the LP will not confirm that he will be able make such a distribution is to make the SoA appear more attractive!!!!
Remember the LP could already have paid us a dividend of at least 12% (worth £30k to a £250k depositor)earlier this year if it had not been for the manipulations of the IOMG in preventing the liquidation of the bank. Do you really want your destiny controlled by a government which will use its powers under the SoA to control the actions of the LP to the ultimate disadvantage of many of the creditors of the bank?


@Bobby S

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 16:30

If you want to vote for the SOA go ahead but please DESIST from making statements like 'Irrational hatred of the IOM.

It is patronising and in fact just plain stupid.

People posting here arent stupid and thats why most will not wish for lightening to strike twice by entrusting the outcome of this fiasco to those who to a large extent. let it happen the FIRST TIME!

SOA opinion

  • run668
  • 18/10/08 31/05/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 07:56

Dear Godon 45,

Thank you very much for this excellent, very informative and constructive post.

I am not posting often but feel compelled to post on behalf of foreign currency deposit holders. Under SoA (or liquidation) we see our deposits converted at a given rate of a specific date, and then paid in British pound at unspecified rates.

Indeed, the payments, made in Pounds, over several years (SoA or liquidation), will be subject to tremendous exchange rate fluctuations when converted back to our currency of choice. This could be positive or negative for the depositors.

For example, say I have $100,000 and we all get back 75%. In my account, I should have $75,000. Not $71,000 or $78,500 depending on the exchange rates.

In the example above, and currently if under liquidation, I retain all my rights to sue to ensure that the same % returns, like all other depositors. Under SoA, I am not so sure I retain all my rights.

Compared to liquidation, under the SoA, we have an opportunity to include text to see that all foreign currency depositors get back x% (the same as other depositors) of their deposits in the original currency. That would then make the SoA more appealing for a specific group.


Ps. My status: Foreign currency depositor with more than GBP50,000.