Initial letter to DCS claimants dated 05 June 2009

  • Anonymous
  • unspecified
  • Offline
Posted: Fri, 05/06/2009 - 22:09

Initial letter to claimants sent by the Scheme Manager on 5 June 2009

Dear Claimant

Kaupthing Singer & Friedlander (Isle of Man) Limited – In Liquidation (“KSFIOM”)

Introduction

On 27 May 2009, the Isle of Man Court placed KSFIOM into liquidation, and on the same day, the Scheme Manager of the Isle of Man Depositors Compensation Scheme (“DCS”) declared KSFIOM to be in default and activated the DCS for depositors of the bank.

Full details of the DCS can be found on www.dcs.im. This letter is intended to give you general guidance on how to start the claim process if you wish to do so.

Who can claim?

The named account holders, except for certain specified parties - primarily those connected to KSFIOM, are eligible for compensation. The broad categories are:

&nbsp1 Individuals may claim 100% compensation on aggregated deposits up to a maximum of £50,000.

&nbsp2 Joint personal account holders may claim 100% compensation on aggregated deposits up to a maximum of £50,000 each.

&nbsp3 All other account holders may claim 100% compensation on aggregated deposits up to a maximum of £20,000.

&nbsp4 In certain circumstances, persons with interests within clients’ accounts and trusts may be treated as individual claimants.

If you have already received payments from one or both of the Early Payment Schemes operated by the Treasury of the Isle of Man, the amounts you have received will be deducted from any compensation and/or liquidation payments due to you.

By claiming from the DCS you will receive compensation payments up to the maximum you are entitled to as soon as the Scheme Manager is able to make payments. In return, you will be required to assign your existing full rights in the liquidation to the Scheme Manager to enable it to pay compensation sums to you and thereafter recover the amounts of compensation paid. As soon as the compensation is recovered, any additional distributions from the liquidation will be redirected to you immediately.

If you choose to claim from the DCS, and therefore assign your rights, it will not be necessary for you to make a claim directly in the liquidation as well – the Scheme Manager will do so on your behalf.

How do I claim?

In order to process claims as quickly as possible, the DCS claims mechanism is primarily electronic. You will need to go to http://www.dcs.im and follow the instructions on how to start the claim process. This site will be available for submissions as soon as possible but in any event by 10 June 2009. Updates on the availability of claims submission site will be posted on http://www.dcs.im. You will need three things to enable you to initiate a claim:

&nbsp1 An email address

&nbsp2 At least one account number of an account that you held at KSFIOM

&nbsp3 The name of the account

If you do not have any access to the internet and/or do not have email, you should write to the Scheme Manager at the above address stating your name and account details (number(s) and title) and forms will be sent to you by mail.

Before making any decision to claim in the DCS you should read the full details of the DCS, the Claim Form and the Guidance Notes, and consider taking professional advice on whether to claim in the DCS or stay outside and receive all payments directly from the liquidation of KSFIOM.

In order to be assured of inclusion in the first payment of compensation by the Scheme Manager, you will need to have completed the claim form online and returned the signed printed version by 30 June 2009. Forms requested by post will also need to be completed and returned by this date. Please note that late submission will not invalidate any entitlement you may have at this stage but may delay payment.

Communication

The DCS website will be the main source of information about the progress of claims, expected payment dates and general information about the progress of the DCS. It may be found at http://www.dcs.im. A recorded helpline is available on +44 (0)1624606000 and emails may be sent to info(?)dcs [dot] im.

Yours faithfully,

Mike Fayle
Agent to the Scheme Manager

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Postmark 5-Jun-09 9.00 pm

  • Anonymous
  • Offline
  • Mon, 08/06/2009 - 10:08

.....received NW Spain 8-Jun-09 am

It can be done Mr Simpson - with the correct postage!


Icesave DCS

  • lorraine
  • 14/10/08 14/07/10
  • unspecified
  • Offline
  • Sat, 06/06/2009 - 21:54

Why all this complication with IOM. For Icesave within a very short time after liquidation I received a letter and claim form from FSCS, filled it in and lo and behold my money - every penny of it - was repaid within a couple of weeks.

Why does the IOM do everything they can to make life difficult for everyone? Even Iceland has now paid back a substantial amount of money to the UK but still IOM keeps us hanging.

Lesson learnt: Trust Iceland before IOM - next time I'll put my money in the Nigerian bank --- gotta be a better bet than IOM.


As far as I am aware, Iceland

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 07/06/2009 - 05:22

As far as I am aware, Iceland has not paid any money back yet. All that might be agreed is that they have agreed a load from the UK Government which they will start paying back in 7 years and will be completely paid back in 15 years.


The next stitch-up?

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 09:08

Okay, so what might lie hidden in this such that they recommend our taking legal advice? Does anyone have any ideas?:

'Before making any decision to claim in the DCS you should read the full details of the DCS, the Claim Form and the Guidance Notes, and consider taking professional advice on whether to claim in the DCS or stay outside and receive all payments directly from the liquidation of KSFIOM'.


What Does DAG Advise With Our Solicitors ?

  • spanish
  • 26/10/08 13/06/09
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 20:51

Good Point, to sign or stay outside until Liquidation.? What does DAD and Edwin Coe Advise.? As those with more than £50K will wonder.? Whatever DAG advises, I would go for because they have been steadfast through-out..


The next stitch-up?

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 11:32

broke2: See below for effect of assignment of ful rights in liquidation


DCS Claims

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 11:29

Following the protracted delays in delivery of the SOA voting forms, Mike Fayle has taken a lesson from the Simpson----don't send the forms until someone asks for them following receipt of the 5th June letter.

Then wait again to receive the claim form and guidance notes.

Then be sure to get legal advice before you make your claim and then post it back to arrive by 30th June if you want to be in the queue for the first hand out which may be sometime away.

Thus for those in remote spots e.g France???--sorry sarcasm---who are not up to speed with PC and a printer and scanner are up s**t creek again with no paddle.

Is it me or are all these highly paid bean counters morons?

I feel another e mail coming in my mind to Mike Fayle--I upset him with the first one ---I did apologise for being a little OTT(e.g get off your a**e and do something) but now I am getting the feeling that I was wrong to apologise.

I will wait until tomorrow I think.


BEWARE OF THIS

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 09:36

I received this as well by email this morning:
1. The subject line was 'Fw: .........' - ODD
2. There was another 6 'people' cc'ed on the same email - ODD
3. The senders phone number is based in South Africa - ODD
4. Checking the Skype info - the person sending it has a web site for Craton Capital - a South African Investment Company

There is something to me that does not ring true with this email especially as it is supposed to come to each depositor individually from KPMG IOM - so until it is confirmed as good or bad please do not respond to it


Tricky, here is where I got the letter

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 10:38

I went to the following IOM government FSC website

http://www.gov.im/fsc/

Clicked on the item listed as KAUPTHING SINGER & FRIEDLANDER (ISLE OF MAN) LTD (“the Company”) – in liquidation which is the third item under latest news and then select www.dsc.im as shown in the sentence " A dedicated website has been created for the Scheme, www.dcs.im "


Re: Letter and DCS claim forms

  • Anonymous
  • Offline
  • Fri, 05/06/2009 - 22:52

If I read the above letter correctly, all claims against the DCS will have to be submitted by 30 June 2009 to avoid delays in payment. If the letter is only being mailed out today, how in the blazes are those depositors who live far afield, and don't have access to a computer, ever going to obtain and return their form by that date?


Claims on DCS

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 02:39

The claim form is not yet available and will not be until 10th June.

I believe that e mail is acceptable as of course one would need to print the form in order to sign it and then scan and attach--that's how I read it.

The postal timescale is optimistic for many.

Observation--3 weeks for claim form turn around but at least 2 months to pay out! one sided again!


claim forms

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 08:04

So, they've sent out the claims forms (5 June). Why isn't the claim form available online now? You think it won't be available online till 10 June? Time is suddenly tight. All for the IoM to have things wrapped up for the 30 June meeting. I'm worried about missing the date. I haven't received my voting forms yet.
Nervous again.


claim forms

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 08:33

I understand they have sent out the letter which is posted on the site, not the claim forms; they are not yet ready and will be posted by 10 June.

I'm nervous too - but more about assigning all rights to DCS (or renounce applying for a scheme which would probably - who knows? - return a fair proportion of my money much sooner than liquidation alone).


DCS initial letter - significant issue

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 00:41

I note the assignment required under the DCS is the full rights of the claiming depositor in the liquidation. Only yesterday I was telling another poster that that couldn't be right, but it has since been pointed out to me by someone more awake than I usually am that it is indeed right (ie. I was wrong) because it is necessary so as to ensure that the DCS is able to recover in full before the depositor gets any further money from the liquidation.

However, and this is the important part, because everyone with deposits of less than around £350k should claim from DCS, the assignments made under the DCS are going to be very large indeed - probably more than £350m. Moreover, those assignments will be made when DCS claims are submitted, rather than when DCS pays out, and that will occur before June 30, which is the final date for DCS claims if claims are not to be delayed. That is before the first creditors meeting. That means that the FSC, or whatever other entity is the beneficiary of the assignments made under the DCS will acquire a very large value with which to vote at creditors meetings, far greater than the votes already gained by IoMT under the EPSs.

It might be possible to argue that the beneficiary of these assigned rights (FSC/Treasury) should not be able to exercise the full value of assignments for voting purposes, because it has been artificially acquired and does not represent money to which they are fully entitled and that the only value in respect of which they should be able to vote is the monies actually paid out by the FSC/Treasury.


DCS claim

  • richiyeh
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 09:55

A question for you or the other legal brains. Apart from assigning one's rights in liquidation, the DCS states that no claim under liquidation should even be submitted. How is it to be ensured that the excess over £50k will be recovered as and when the dividends exceed this proportion of a claim?


@richiyeh

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 09:59

I too am uncomfortable with this. I see what the DCS is trying to achieve, because full assignment provides the means by which it can ensure that it recovers all funds due to it before the depositor recovers any, but it seems to me that the same can be achieved another way without necessitating the assignment of the rights in more than the sum limited as payable to the depositor under the DCS. I am looking into this - as you will have realised, it is not at all a simple matter and the IoM has obviously had several weeks lead on us on this one.


@richiyeh

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 09:59

I too am uncomfortable with this. I see what the DCS is trying to achieve, because full assignment provides the means by which it can ensure that it recovers all funds due to it before the depositor recovers any, but it seems to me that the same can be achieved another way without necessitating the assignment of the rights in more than the sum limited as payable to the depositor under the DCS. I am looking into this - as you will have realised, it is not at all a simple matter and the IoM has obviously had several weeks lead on us on this one.


DCS and voting rights

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 09:13

Indeed Elgee - this seems to be a very significant and urgent point to consider. After all that has happened so far, I for one feel extremely uneasy (to say the least) about assigning ALL my rights to the DCS Scheme Manager before any payment is made and before the creditors' meeting (and before even the rules for electing the creditors' committee are known). And yet this is indeed what we appear to be being asked to do, with great speed (before 30 June) if we do not wish payments to be (further) delayed.

This undue haste after so much delaying seems highly suspicious. Months ago some of us went to great pains to dissect and try to understand the DCS and its possible pitfalls. Since then our attention has been diverted to the abortive SoA. Meanwhile, 'they' have had all their time to get organised to their best advantage. And, after all the time, effort and money spent trying to convince us that payouts would be quicker under SoA than under the DCS, we are now being told that IF we apply for DCS before the creditors' meeting we MIGHT get fully paid up to £50K within 3 months. Of course, they will no doubt insist on the huge effort they are making to help depositors, particularly those who supported the SoA ... and who will be able to disprove that?

The DCS regulations, paragraph 16, state:
"16. (1) Where a participant is in default, this regulation has effect in relation to depositors
who apply for compensation under the Scheme.
(2) Despite any other provision of these Regulations, the Scheme Manager shall not
pay or determine to pay a compensation sum out of the Fund in respect of a liability unless the
depositor has agreed that —
(a) the depositor’s existing rights in respect of that liability shall vest in the
Scheme Manager;
....
(3) If the depositor so agrees, the participant's liability to the depositor is
extinguished or, as the case may be, reduced and the Scheme Manager shall have a right of
recovery against the participant, being a right otherwise identical to the depositor's right in
respect of the liability agreed to be vested in the Scheme Manager."

A priori this would include our voting rights?

Is this an attempt to deprive DAG (or indeed any group of direct depositors) of ANY representation on the creditors' committee, which could end up in the total control of the DCS and the big insurance companies? I'm sure DST are on to this - it seems urgent to know what we can and must do to ensure we are represented.

According to Regulation 10(1) of the DCS Regulations, we have up to 6 months to apply to the DCS. The possibility (no guarantee) of a payout within 3 months if we apply in haste is the carrot now being dangled before us. I for one would be willing to wait a little longer if it would help get better representation for all. Advice from the legal team is urgently needed before we fall into another IoM trap.

I also note that the DCS regulations as posted on the DCS and FSC sites begin with the following disclaimer:

"Disclaimer: This copy of the Compensation of Depositors Regulations 2008 has been updated by the
Financial Supervision Commission (“FSC”) for the convenience of users of this website to include
subsequent amendments to the Regulations. The FSC accepts no liability for the accuracy of the
updating. The updated version of the Regulations is intended for guidance only and the following
original legislation should be consulted for legal purposes: SD 826/08, SD 844/08 and SD 232/09."

Charming! I have looked for the 'original legislation' referred to here, but can find no trace of it on the FSC site.


DCS and voting rights

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 09:53

Anrigaut: I have copied of the DCS in it various incarnations, obtained by seraches on the IM government website (www.gov.im). However, it will not assist you other than to show you the ways in which the instrument (the regs in this case) have been amended since last year. I think it is safe to assume that the amendments showing on the copy supplied of the current regs. are indeed the amendments that were made, but if it helps the various amendments are also available on the gov. site:

and these are the latest amendments themselves (not inserted into the regs being amended):

http://www.gov.im/lib/docs/infocentre/acts/secondary/2009/201_300/sd2320...


DCS and voting rights

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sat, 06/06/2009 - 10:29

Thanks Elgee. I agree that the latest version should be OK - but still found it infuriating that the copy provided for creditors should conatin a disclaimer on every page, with no obvious link to allow verification in the original legal documents.

This was however a minor issue. The real problem as I see it concerns the problem of getting DAG representation on the creditors' committee and the possible (probable?) negative effects of applying immediately for the DCS. The question is clearly urgent as claim forms will be available within the next 3 days. Should we be asking depositors NOW to at least hold fire in sending off claim forms in unseemly haste, at least until we are better informed as to the possible negative consequences?


DCS/voting

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
  • Offline
  • Sat, 06/06/2009 - 00:56

Has the FSC been written to about this? Has KPMG been asked to put it on the FAQs on the DCS website?
It is clear to me that they (the scheme manager) will want to be on the creditors cttee.


DCS/voting

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 09:22

Manx: I only thought of it at about 1am this morning, so the answer is that the FSC (or KMPG) has not been written to about this matter yet. Doubtless the DST will want to clarify it as quickly as possible, although letters written by EC to PWC about creditors representation have not yet been responded to after more than a week.


Letter/DCS Claim forms

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
  • Offline
  • Fri, 05/06/2009 - 23:27

I am sure processing the documents in batches and having claim stages will reduce costs.
It is quite possible to have an all online claim process it seems.
Seems fairly well organised and rational to me.


manx-person, it seems to me...

  • Anonymous
  • Offline
  • Sat, 06/06/2009 - 01:24

The online claim process will only provide the the applicant with a filled in claim form which they will have to download, print out, sign manually and return by post mail to FSC. I could be wrong but that is how I interpret the 2nd to last paragraph in the letter above.


claim process

  • manx-person
  • 17/10/08 31/05/09
  • not a depositor
  • Offline
  • Sat, 06/06/2009 - 03:06

Yes looks like that to me too, I think for the assignment to work it would either need to be electronically signed/authenticated or provided in hard copy ( the scheme managers didnt think the cost of electronic signing was justified I guess ) - I didnt mean to mislead.

Elgee's comments are interesting in respect of timing though...