KSF Letter 5/11/08 re In Flight Transfer

Letter received today............and for their information, I am one of the Depositors supporting the Hopper legal action.

Dear............,
I understand that you made a request for the transfer of funds from your account prior to 9 October 2008.
Following my appointment as Liquidator Provisionally of Kaupthing Singer & Friedlander (Isle of Man) Limited ("the Bank") on 9 October 2008. I have sought to clarify the position with regard to such transactions.
With regard to your request for funds to be transferred, I can confirm that according to the records of the Bank book entries were made debiting your account with the Bank. However, in respect of sterling transactions the Bank used its account with its sister company, Kaupthing Singer & Friedlander Ltd (in administration)("Kaupthing UK") in the UK to process payment requests from its own customers. We are advised that although the Bank included the aforementioned transaction in a batch of entries sent to Kaupthing UK for processing by them out of the Bank's account with them, it had not in turn been processed by Kaupthing UK through its own clearing facilities with RBS at the time that company entered into administration.
We have sought legal advice in respect of how such transactions should now be treated. including obtaining an opinion from leading Counsel in the UK. This advice has confirmed that following administration of Kaupthing UK. together with the presentation of a petition to wind up the Bank on the grounds that it is unable to meet its liabilities as they fall due, there is no prospect that the Liquidator Provisionally (or any Liquidator if one is appointed in due course) will be in a position to complete these transactions. The Bank's account with Kaupthing UK is now in effect frozen and the Bank will rank as an unsecured creditor of Kaupthing UK in respect of the balance held in that account.
There have been suggestions that some kind of trust claim or proprietary interest arises in favour of a customer in circumstances where (i) instructions were given by the customer, prior to the appointment of the Liquidator Provisionally, for an electronic funds transfer to an account of the customer at another bank, and (ii) the inter-bank transactions required to effect such instructions were not completed (by the appropriate credit being made to the customer's account at the recipient bank) prior to the appointment of the Liquidator Provisionally. Whilst you may take your own advice upon these points should you wish to do so, I have taken legal advice in this regard and am advised that such suggestions are incorrect and that instructions for a funds transfer give rise to no trust claim or propriety interest.
I shall accordingly be making arrangements for your account with the Bank to be re-credited as the date of the initial debit entry, with the relevant amount including any transaction charges. Following the hearing of the petition for the formal winding up of the Bank, on 27 November 2008, if a Liquidator is appointed, customers will be contacted with regard to the process for claiming monies owed to them.
In the interim we will be shortly issuing statements to customers as at 30 September 2008. It is intended that statements as at 9 October 2008 will be issued in due course once we have completed re-crediting accounts as referred to above.
If you have any queries, please contact KSFIOM on +44(0)1624699222.
Yours sincerely

Scott Bevan
For Mike Simpson
Liquidator Provisionally of
Kaupthing Singer & Friedlander (Isle of Man) Limited