IN FLIGHT TRANSFERS

  • cande
  • 15/10/08 n/a (free)
  • a depositor
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Posted: Tue, 24/02/2009 - 16:14

Would it not be the case that allowing in-flight transfers on to their final destination would be to the benefit of all depositors?

The monies would be paid out of the account with KSF UK which was created specifically for the processing of BACS and CHAPS payments from the IOM. This would reduce the claim against either the DCS/SOA in the IOM by the same amount and would therefore increase the amount to be paid out of funds under the control of the IOM to everyone.

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Action re in-flight transfers

  • AJM UAE
  • 11/10/08 31/05/09
  • a depositor
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  • Thu, 26/02/2009 - 10:18

Please could someone update me on the status of the legal action regarding in-flight transfers? Who is organising this? Please contact me directly via e-mail with details. Thanks.


IN FLIGHT TRANSFERS

  • benchar
  • 10/10/08 31/08/09
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  • Tue, 24/02/2009 - 18:41

Thanks Cande,
Whilst it does not exactly balance,it is too the advantage of ALL if in flight transfers
are released,there is a definite advantage to all other depositors.These funds are held in Kaupthing UK( london ) and not on the IOM.
Mike Simpson has no legal right to involve himself as these funds are outside his juridstriction,and has no right to have done so.Under the British Banking Code to which the IOM is signed up,once ENACTED by the specific Bank these funds are the legal property of the specific individual and are "RING FENCED " in the clearing system and must be passed to that individual.
This is to the advantage of the remaining depositors as there are less deposits to share the same pot of money.
Mike Simpson must reconsider his position and uphold the law and Banking Code
Which requires him to take action to ensure these In Flight Funds are released NOW.
Just because he has made book entries back to the individual accounts is MEANINGLESS GARBAGE,which does not change a thing ,he does not have the in flight funds to credit back to those accouts.These book entries are a work of fiction.


IN FLIGHT TRANSFERS

  • Anonymous
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  • Tue, 24/02/2009 - 20:14

Benchar: "Mike Simpson has no legal right to involve himself ... these funds are the legal property of the specific individual and are "RING FENCED " in the clearing system and must be passed to that individual. This is to the advantage of the remaining depositors as there are less deposits to share the same pot of money."

While I agree that the in-flights have a pretty strongly arguable case and I support them, it will not do at all to pretend that the remaining depositors would benefit from the in-flights getting their money out. This is simply false. The best that could happen, which is only in the event of 100% recovery for all, is that it would make no difference. If recovery is anything less than 100% (as it will inevitably be), the remaining depositors will lose if the in-flight depositors get their money out.

I think this is obvous, but here's a simple example in case it isn't:

Take 10 depositors, all with £1,000,000 on deposit and suppose that 2 of them are in-flight. Suppose the in-flight are treated as special cases and recover their funds in full, making no loss, and that there is £5,000,000 is in the kitty to pay the remaining depositors. The remaining 8 will receive £625,000 each, making a loss of £375,000 each.

Now consider what would happen if the prov liq. adds the in-flight monies to the kitty. It becomes £7,000,000. All 10 depositors would recover £700,000 each. All depositors including the 2 in-flight depositors would lose £300,000 each. The 8 non in-flight depositors would each receive £75,000 more than in the previous case.


in flight money

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Tue, 24/02/2009 - 21:50

Elgee,
Usually your posts are pretty intelligent but this one is uncharacteristic rubbish. The money owed to the inflighters is already with KSFUK. If this had not been the case the inflighters would not have any possibility at all of getting their in-flight money back. This is the very reason that the inflighters are fighting their case in GB and not on the IOM, it would habe been pointless to do so! The KSFUK receivers are likely doing their best to prevent the inflighters getting their money as this would leave less in their kitty. It is in my opinion incomprehensible that Michael Simpson aided and abetted them in this. Perhaps he believed, at that time, that he could still gain access to all the KSFIOM deposits with KSFUK. Perhaps he also believed they were ring fenced!
Assume KSFIOM evetually recovers 50% of their deposits with KSFUK.
If the inflighters received £10m of their inflight moneys, KSFIOM would receive £5m less from KSFUK but the KSFIOM retail deposit total would reduce by £10m leaving the others KSFIOM depositors £5m better off!
The lower the KSFIOM recovery from KSFUK the bigger the advantage to the other KSFIOM depositors!
The other DAG members should therefore hope the in-flighters will be successful.


in flight money

  • Anonymous
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  • Tue, 24/02/2009 - 23:05

Brabander: Dealing first with your last point, as it happens I do hope inflighters are successful.

As for the rest, there may well be some misunderstanding on my part (and also of one or two other posters below). I thought that the in-flight money never physically left KSFIOM or that if it did it had been returned to it. However, you are telling me that it is all in KSFUK.

I also thought that the inflighters were fighting their case in the IOM, as I recall that was where proceedings were issued, but I have not been keeping up with the in-flight issue at all so I may be completely wrong.

As to your numerical example, if the in-flight money is in KSFUK, then I agree that if and only if the % recovery from the UK bank is lower than the % recovery would be from the IOM bank in the event that in-flight monies are not repaid, then KSFIOM depositors would benefit from the inflighters recovering their funds in full from KSFUK rather than as part of the liquidation. But only subject to that proviso.

In general, if the recovery from KSFUK is p% of the total I of in-flight funds and if the recovery from KSFIOM is q% of a total D of non-inflight deposits in the event of prior full recovery by in-flight depositors, and the recovery from KSFIOM is q' % if there is no prior recovery by in-flight depositors:

then I calculate that q' = (qD + pI) / (D + I) [1]

and q' - q = (p - q) I / (D + I) [2]

so if p > q then q' will be greater than q

ie. if % recovery from KSFUK is greater than % recovery from KSFIOM (excluding in-flight) then KSFIOM depositors would recover more if in-flight depositors did not win their case. Conversely, if % recovery from KSFUK is less than % recovery from KSFIOM (excluding in-flight), then KSFIOM depositors would do better if in-flight depositors do win their case.

numerical example using [1] and [2]

D = £8m
I = £2m
p = 50%
q = 62.5%
from (1): q' = 60%
from (2): q' - q = -2.5%


IN FLIGHT TRANSFERS - NUMERICAL EXAMPLE

  • HOPPER
  • 10/10/08 31/05/09
  • unspecified
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  • Tue, 24/02/2009 - 21:29

Elgee, I like your approach of providing numerical examples, to me this approach generally provides clairity, but I believe you have missed a key point.
Let's use your example of 10 depositors, each with £1m on deposit, and the prov liq having £5m in the kitty.
If the two inflighters each get back their £1m in full, I agree with your numbers (the remaining 8 share £5m, so £625k each.
If the prov liq gets back 100% recovery on in flight monies, then again I agree with your numbers (the full 10 each get £700k).
But what if there is only 50% recovery on inflight monies. Then the "kitty" is £6m (i.e. £5m plus £1m in flight). Then each of the ten people only get £600k. In this case, the non-inflighters end up suffering from the failure of the inflighters.
It depends on many things, e.g.
1. The percentage recoveries (including from KSF London to KSFIOM) - a spreadsheet can calculate break evens if necessary, but it will end up being quite complex
2. The nature of how the inflighters get paid out (for example, if inflighters get paid out in full, then this will reduce the payout percentage to all creditors of KSF London, but since KSF London is way bigger than KSFIOM, the percentage impact will be tiny)
As with many things in this sorry mess, it is not simple.
Regards
Hopper


Hopper: Thanks, I understand

  • Anonymous
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  • Tue, 24/02/2009 - 21:32

Hopper: Thanks, I understand you point, but is it not the case that the prov liquidator actually has (most of) the funds that were purportedly sent out by the in-flighters?


'Now consider what would

  • cande
  • 15/10/08 n/a (free)
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  • Tue, 24/02/2009 - 20:51

'Now consider what would happen if the prov liq. adds the in-flight monies to the kitty.'

The point being that the liquidator provisonal does not have access to the monies in question - they are in KSF UK and therefore do not form part of the 'kitty'.


Now consider what would

  • Anonymous
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  • Tue, 24/02/2009 - 21:30

I understood that most of the in-flight money was back with the provisional liquidator


Monies in KSFUK

  • IanAbroad
  • 11/10/08 13/08/09
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  • Tue, 24/02/2009 - 21:14

unfortunately most of the unprocessed in flights are just entries on the KSF IoM ledgers as debits on the transferers accounts.
No money was never credited to the KSF UK account to make the transfers.
What the LP has done is credit the account balances back to the IoM accounts rather than credit the KSF UK balance sheet and send them more money.
The LP has spent good money, the depositors money, our money, seeking the very best legal opinion on this matter and has decided, on favourable odds, that he is correct and no court would try to uphold the transfers for various legal reasons.

The next step in this saga is the Habana case to be heard on the IoM where an IoM company is challenging the fact they initiated a transfer that was not completed. If that case is successful, and I hope it is, then that will be a decisive point for the in-flighters.
The in-flight topic and summising are dead until the Habana case has a verdict.

Best to concentrate on the return of 100% of our savings from IoM Gov to save their economy now and for future generations.


FUNDS COVER FOR IN FLIGHT TRANSACTIONS

  • flying pig
  • 16/12/08 31/05/09
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  • Wed, 25/02/2009 - 15:48

There was no need for any funds to be sent to KSF they already held more than sufficient in their "contra" account as is normal banking procedure. Funds flow in and out of that account on a daily basis (or at least they did until HMT stopped it) but the funds always exceed the amount required for any transfers and the balance belongs to KSFIOM.

Funds left KSF as ordered but were returned (for whatever reason which sometimes happens due to incorrect account numbers etc). They are clearly identifiable and in the normal course of events KSF would remit them again after checking details. Now that KSF have finished the ING transfer (totally illegal favouring one depositor creditor over another) the transfers should now be completed.. Simpson's "book entries" are garbage and in fact false accounting. Simpson does not have the money so how can he purport to recredit it? I have heard of "creative accounting" but this takes the biscuit!

KSF have been told that there are claims against them and that they "intermeddle" at their peril.

Resulting court cases will be in the UK not the IOM although there is probably a very good case aganst several people there for events occuring both before and after 8th October 2008 particularyly in view of some of the documentation issued including some purporting to be MT103's


British Bankers Association - Inflight

  • Alastair
  • 10/10/08 30/09/09
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  • Tue, 24/02/2009 - 19:18

Bencher or anyone else. Can you point to the specific section of the code of conduct that covers this?

Also has anyone contacted the BBA for advice on how to following this up for instance with a bank ombudsman?


IN FLIGHT TRANSFERS

  • benchar
  • 10/10/08 31/08/09
  • a depositor
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  • Wed, 25/02/2009 - 16:22

BC,
I regret I cannot point you to the section as I do not have a copy before me.

I have written to the Banking Ombudsmen and "Banking Code Standards Board" on 19th Feb and await a reply,I do not expect a result straight away.

Mike Simpson has stated in writting that the IN FLIGHTS are held in Kaupthing UK
and so are NOT on the IOM.
Mr Simpson can carry out all the paper exercises he likes ( SO CALLED BOOK ENTRIES
back to individual accounts ) the funds are still in the UK and he has no control over this situation,thats why we cannot understand his attitude.
It is now widely thought that it is likely to be benificial to other depositors if the in flights are paid out by Kaupthing UK.As hooper stated there are too many variables to be certain,but broadly this should be the case.
Hopefully one of the governments involved will face up to their legal and moral obligation and pay us ALL OUR MONEY BACK, In Flights will then be irrelavent.


IN FLIGHT TRANSFERS

  • flying pig
  • 16/12/08 31/05/09
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  • Thu, 26/02/2009 - 16:16

Simpson does not and never has had in flight funds.

They were adequately covered in the KSF contra account. (See my comment 25the February 2009 1548 above)

I was told by a chartered accountant that Liquidators fees usually include a proportion related to the value of funds they deal with / recover. I was left to make my own judgement as to why Simpson wants to "recover" these funds. They belong to the In flighters not KSFIOM.

The UK govermment has guaranteed 100% return to depositors with KSF.

In flighters are (inadvertant) depositors with KSF and therefore return of their funds is guaranteed by the UK government.
So far KSF liquidators have failed to reconcile the funds they hold "in transit" quoting that their priority was the ING transfer.

Hopefully they will now get on with it.

The UK FSCS will not pay out as the KSF liquidators will not confirm details of (*inadvertant") deposits.

I have no idea how many depositors are working on this basis, perhaps there is room for a new confidential thread where they can share their knowledge.

Unfortunately Simpson already has access to DAG groups so it may be better to conduct something off site as he seems to be working against us

Maybe Hopper has a suggestion.

However my experience with liquidators (only as a creditor so far!) is that they spin everything out as a meal ticket because their performance and competence is rarely assessed. by anyone independent.

Hopefully the fact that so many eyes are on them with this matter including their own regulatory bodies and governments may induce them to up their game.


In flight benefit all?

  • Alastair
  • 10/10/08 30/09/09
  • a depositor
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  • Tue, 24/02/2009 - 19:09

Isn't it just that 100% of the payment would come out of KSFUK and 100% off the liabilites of KSFIOM. Hence if you assume KSFIOM are not going to get 100% back from KSFUK this is good for those of us with funds not in flight.


Plus the fact that it was

  • SgKZ
  • 10/10/08 31/05/09
  • a depositor
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  • Tue, 24/02/2009 - 17:04

Plus the fact that it was morally wrong to slow them down and stop them in the first place. Maybe the Forex in flights are in two minds though...