Fundamental questions

  • Ormus
  • 19/10/08 31/05/09
  • unspecified
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Posted: Tue, 21/10/2008 - 12:05

I am one of those who have a bit less than £50,000 in KSF (IoM), but which nonetheless represents everything I have managed to save in my lifetime. Could someone help me to understand a few basic points. 1)Am I correct in saying that individual depositors are now fully guaranteed by the IoM DCS to get all our money back? (Up to this £50,000 threshold). The Tynwald decision to raise the ceiling from £15,000 to £50,000, even though taken on the same day that KSF ceased trading, does apply to us all?
2) How are we to know, in the current meltdown, that the IoM guarantee is guaranteed? Especially when the Icelandic govnt's guarantee has evaporated?
3) If the IoM guarantee is sound, when are we likely to get our money back? Currently I am going into debt as everything is frozen. I realise no-one can say for sure, but has anyone any experience to offer any thoughts on this.
4) I also have £13,000 "in flight" i.e has left KSF but has not arrived at destination. Is this at least likely to be resolved soon so that bills can be paid?
Any thoughts on these points would be gratefully read. I think this site is doing a great job, and will contribute what I can when I can.
Regards to all,
Ormus.

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The dates puzzle me? 6th

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 21/10/2008 - 15:12

The dates puzzle me?
6th October banks told not to process Icelandic money but KSF not told, this is in line with anti tipping off guidance.
Next day Darling makes accusations re Icelandic banks and then 8th KSF London goes into Admin.
Surely the decision to not process Icelandic funds was therefire made over the weekend of 4/5th some 2-3 days before Darling has alleged conversation with icelandic officials where he states they are bankrupt. The decision to close the banks was made and then the rationale worked out afterwards?


Strategic Iceland

  • worriedsaver
  • 10/10/08 31/05/09
  • unspecified
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  • Tue, 21/10/2008 - 15:31

Question : Given all the unanswered questions regarding , dates of anti tipping off guidence , evoking anti terrorist laws , sealed court papers , etc ., did the UK government deliberately conspire to bring down the Icelandic economy in order to force it to go to the IMF and presumably then join EU rather than go begging to Russia to bail it out because the West was worried about Iceland's stategic significance . If so then I guess we depositors are just a small peice of "collateral damage " in the whole scheme of things . Does anyone in the press have any views on this and will I now mysterious die in an unexplained car accident for even suggesting this ?


Yes. The guarantee is a

  • occams razor
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 21/10/2008 - 12:23
  1. Yes.
  2. The guarantee is a post-problem payment or payments by the other banks on the island. There is no standing fund. See here:
    http://www.gov.im/fsc/investor/dep_comp.xml
  3. It may take many years to pay customers back fully, but in theory you should get it all back.
  4. No-one knows.

Sorry.


Getting compensation paid

  • ItsTheft
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 21/10/2008 - 13:20

Ormus, As it stands now KSF IOM depositors are covered by the £50k guarantee. The IOM FSC have stated that the DSC scheme in place when a bank is wound up applies. The decision has not been formally made to wind up KSF IOM, though that will almost certainly happen this Friday. So technically speaking the bank has not gone out of business just yet.

We can only appy to the DCS scheme once all claims to the bank have been finalized. This could take a while as we won't know what portion of our money we finally get from the bank until all liquidation proceedings are complete. If there is a class action suit then it will take much longer - 2-4 years (I experienced this once and it took 4 years). Unfortunately this is likely to be the case as there are so many depositors who had more than £50k in KSF IOM savings, and if all other avenues come up empty, the only straw to clutch at will be legal action. Pity because the law says that a liquidated company only has to pay out what it has in its coffers. So any law suit will be about how the existing assets are apportioned to various creditors.

Once liquidation claims are done, we will be allowed to apply for compensation under the IOM FSC DCS. You can roughly estimate how long this will take as the scheme works like this:

1 - No standing slush fund
2 - All banks operating in IOM that take deposits are required to contribute to DCS (only when claims are made) to a maximum of £500k per year each year until the claim is satisfied. Note: none of the money comes from the IOM gov.

There are 33 banks in the scheme (used to be 34!) so the pot available is £16.5m per year. How long will it be for us? You would need to know what the total bill comes to. To do that you have to work out how many claimants there are and then work out how many will claim the full £50k or more as well as the total amount claimed by the under £50k crowd (you can only guess at this as claims will range from <£1k to £50k or £100k for joint account holders).

If you base your calculations on the 870 people who answered the poll on the home page of this site the total bill would be about £36.2m and could be paid in a couple of short years.

There is hope for short term relief in your case: I saw a post on this web site where someone apparently spoke with the KSF IOM call centre this week and was told that the liquidator is working very hard on a plan to make a partial payment (30p on the pound was mentioned) right away to provide relief to people who have short term cash flow problems as a result of this.

The worst case scenario is a long protracted process (with lots of admin for us based on my experience - "if you don't return this completed form by x date you will lose your claim...", etc.). The best case scenario is that somehow the liquidator's lawyers manage to recover the KSF IOM assets stuck in KSF UK in which case there is apparently enough to pay us all in full. It does feel like a long shot.


"There are 33 banks in the

  • occams razor
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 21/10/2008 - 15:31

"There are 33 banks in the scheme (used to be 34!) so the pot available is £16.5m per year."

It may be less than that, as not all banks will be paying the full 500,000 - it depends on what their total assets are.

"I saw a post on this web site where someone apparently spoke with the KSF IOM call centre this week and was told that the liquidator is working very hard on a plan to make a partial payment (30p on the pound was mentioned) right away to provide relief to people who have short term cash flow problems as a result of this"

I haven't heard that, are you sure you are not confusing it with the 30p:£1 intermin offer made to the Guernsey Landsbanki savers? You may be right, I just hadn't heard that.


Also I believe the DCS would

  • occams razor
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 21/10/2008 - 15:39

Also I believe the DCS would kick in pretty much from the moment of default or shortly after, and you then have 6 months in which to lodge a claim. At least that's my understanding.


Thank you both above. That

  • Ormus
  • 19/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 21/10/2008 - 14:00

Thank you both above. That does at least allay some fears. Unfortunately, it does appear that we may be in for the long haul.
Regards,
Ormus.