KSFIOM v KSFUK further thoughts on returns

  • Gordon 45
  • 22/10/08 n/a (free)
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Posted: Mon, 26/07/2010 - 19:57

Hi Folks,

Great news re the 10p/£ back from E&Y (KSFUK) to our JLs on 28.7.2010. I had thought 5p now and another 5p in Dec, they are giving 10p and still mention a return perhaps in Dec. Looking good on returns from the English Bank to our JLs and therefore us.

Note this does not guarantee any more than the current envisaged lower 65p/£ (unless they upped it on this dividend) or the increase to £254.3m until it is confirmed, but looks good eh?

Anyway back to my current posting that I was about to make. Just some more info and thoughts of mine. And as I say on the attachment hope I am not building up hopes unduly - because that really worries me.

One last comment on making postings and seeing very few people reading them or commenting on them. Does not worry me at all, you either read or do not read what I post. Up to you entirely. Unless people tell me to stop posting I will continue to do my best so that all can see my thoughts as they were originally for my and my family's benefit to see where we were going or not going as to our future. And I was happy to let others see what I thought and still think.

I will continue to post if I feel I have anything to say or comment on and I appreciate all the other stuff that people put on, some I find very important, some interesting.

Again I attach my data as an attachment in order to get the wider pages and to protect my layout, to hopefully make it easier for those who wish to look at the info and my estimates and guestimates.

As always,

Take care and God bless to all,

Gordon 45

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The Icelandic government has been threatened with legal

  • AnneD
  • 15/10/08 01/09/09
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  • Mon, 08/11/2010 - 14:36

The Icelandic government has been threatened with legal action by a group of investors in the country's crippled banking system, in a move that could delay efforts to recoup billions of pounds of UK taxpayer funds held on the island.

Bondholders in the three main collapsed banks – Landsbanki, Kaupthing and Glitnir – were relegated behind depositors in the queue of creditors as part of emergency legislation in 2008, which in effect nationalised the Icelandic banking system. The group argue that the government's move was unlawful and any litigation could frustrate the Treasury's efforts to persuade Iceland to reimburse the compensation it paid to British savers after the collapse of Landsbanki's Icesave internet brand. The threat could also hamper efforts by UK local authorities to recoup millions in council tax revenues deposited with Landsbanki and Glitnir.

Tim DeSieno, a partner at Bingham McCutchen, the US law firm representing the bondholders, said: "We may be forced to sue Iceland to reverse 'depositor priority'. The assumptions that inform any Icesave deal then may all go out the window, and any deal to pay the UK would no longer work. We think our cause of action is strong, though it would likely drag through the courts for a lot of years, which itself would be damaging for Iceland."

While DeSieno may be preparing a negotiating position, he represents a group of about 100 heavyweight institutions made up of international investors, pension funds and banks. The 84% taxpayer-owned Royal Bank of Scotland is thought to be among the group.

A spokesman for the Treasury said compensation negotiations continue over Icesave, which collapsed with 230,000 UK savers who had deposited £4.5bn between them. Last week Össur Skarphédinsson, Iceland's foreign minister, predicted that the issue would probably be resolved by the end of the year. "My experience of Icesave is that nothing can be excluded, [but] I honestly don't think it is likely [that it continues into 2011]," he said. "[The talks are] in a very delicate phase, but with the knowledge of the processes that I have, I am not dissatisfied."

Meanwhile, the Local Government Association (GLA), whose members had about £1bn in Icelandic banks, said that Glitnir and Landsbanki have not paid back any local authority as a separate legal case is going through the Icelandic courts to determine where councils rank in the creditor queue.

A spokesman for the LGA said: "We are confident that we will get the lion's share of the money back. The banks cannot pay out any money until the litigation has run its course."

The Icelandic government did not return phone calls but, in August, finance minister Steingrímur Sigfússon said that Landsbanki bondholders were "not likely to get much". He added: "In the other banks [Kaupthing and Glitnir] the situation is better and they will get some return,"

In September, creditors took control of Straumur, the fourth-largest Icelandic bank, in the first restructuring of one of the island's lenders that collapsed in the global financial crisis. The deal is being seen by bondholders as a potential precedent for Kaupthing, Landsbanki and Glitnir.

Iceland imposed its emergency legislation in October, 2008, to allow the state to take control the country's three largest banks, which were short of short-term funds. The bill allowed the Financial Supervisory Authority to merge financial institutions and take over shareholder powers as well as giving deposits priority in the claims procedure.


Dear Gordon, Please do

  • shellshocked
  • 23/10/08 31/05/09
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  • Thu, 19/08/2010 - 10:34

Dear Gordon,
Please do continue to post. Your reports are so welcome and valuable to me and many others. Your efforts are much appreciated and I for one feel very humbled by all you do. A huge thank you.


many thanks , Gordon for all your posting

  • sabi Star
  • 10/10/08 n/a (free)
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  • Thu, 19/08/2010 - 09:35

Thanks so very much for all your work and postings which I have always appreciated.
I am not always able to view the site.


Believe me you have a strong

  • rapata 2
  • 06/12/08 31/05/09
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  • Thu, 05/08/2010 - 02:41

Believe me you have a strong following, I find your analysis and comments insightful and without prejudice.............you have kept our hopes alive during this entire fiasco!


Dear Gordon, please rest

  • southofdaborder
  • 02/11/08 31/05/09
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  • Thu, 29/07/2010 - 19:56

Dear Gordon,
please rest assured that you and Ice and a few others are thoroughy read by those like me who don't have your technical nor analytical abilities. I cannot say how helpful your analysis have been to my trying to recover from this blow. A great thank you to all of you. s


KSFIOM V KSFUK

  • jerrawee
  • 16/11/08 31/05/09
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  • Tue, 27/07/2010 - 12:34

I read everything avidly and greatly appreciate the comments and observations. Amazing really! And thank you. Please don't stop. I'm sure there are others like me.
Cheers.


Keep up the good work

  • uptight61
  • 14/10/08 n/a (free)
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  • Thu, 29/07/2010 - 11:58

Thank you Gordon, Ice + Yorkist for all your statistical analysis + informed conjecture. Believe me, it is appreciated by the members of this forum - please consider silence to be golden, not negative.


Hi Gordon 45, In your

  • IceCrusher
  • 14/10/08 25/10/11
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  • Tue, 27/07/2010 - 13:08

Hi Gordon 45,

In your attachment you list the following figures:

1b. In my thoughts on the May monthly figures I mentioned a bit about E&Y (KSFUK) worst scenario situation, which showed the following;
£590.000m owed gross back to KSFIOM from KSFUK
£163.900m less ‘set off’ owed by KSFIOM to KSFUK
£426.100m net balance owed to KSFIOM
£ 53.000m Add on owed back from CDs (certificates of deposit) from KSFUK
£479.100m net total owed back to KSFIOM from KSFUK

I would appreciate your confirmation of the elements that comprise the gross figure of £590m. From the JLs Final Report to Creditors (9th Oct 08 to 15th July 09) KSFIoM initially held (to the nearest decimal million) the following sums in the UK:

£349.6m = Unsecured deposits
£185.0m + interest from 22/9/08 until 8/10/08 = GMRA repo agreement
£534.6m + interest = Total
£53.5m = Value of CDs
£588.1m = Sub total
£2.0m = Value of the ISDAs
TOTAL originally in KSF UK = £590.1m + interest as above

You appear to have included the CDs TWICE in your list above.

According to the same report:
£349.6: Unsecured
-£164.3: Set-off (KSF UK)
£185.3: Unsecured
-£0.63: Interbank fees
£184.7: Unsecured total

£184.7m + £185m (+ int) + £2m + £53.5m = £425.2m (+ int) (Not £479.1m)
And £425.2 + £164.3 (set-off) + 0.63m (fees) = £590.1m

The repo shares were valued at £154m by E&Y and £136m by PwC, our JLs accepted the E&Y value 'in the interim' but reported £136m in the Final Report to Creditors - this was a misrepresentation.

£21.0m is the difference between E&Y's valuation of the repo funds and the actual purchase value (£185m) less the £10m shares removed from KSFIoM's repo contract by KSF UK without KSFIoM's knowledge or agreement. Eventually, we either get the shares back or the value of the difference must increase. The interim agreement rounded to £205m (£184.7+£21m) but hopefully this amount has now been resolved and adjusted upwards.

You also make the following assumption:

2b.
£254.3m
£71.75m take away total received so far
£182.550 Balance on which remaining dividends ex E&Y (KSFUK) will be based on.

Multiply this by 65%and you get £118.327m

Why are you assuming that the £71.75m is to be deducted from the £254.3m? If the UK administrators and our JLs do agree on the unsecured deposit at £254.3m, then we are entitled to receive dividends based on that sum - even pay-back dividends to correct the underpayments already made (35% of 254.3m = £89m). £254.3 at 65% is £165.3m and at 78% this increases to £198.4m - don't sell us short!
Ice


Ice, I think the £71.75

  • yorkist
  • 01/07/09 31/05/09
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  • Tue, 27/07/2010 - 20:10

Ice,

I think the £71.75 million deduction is for the amount so far received from KSF UK.

I believe KSF UK have up until now been paying dividends on £205.0 million.

£205.0 million at 35% (% already paid in dividends by KSF UK) = £71.75 million.

My analysis attached as a pdf file to my posting of yesterday also shows the same deduction.

Yorkist


@Yorkist...

  • IceCrusher
  • 14/10/08 25/10/11
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  • Wed, 28/07/2010 - 19:47

Thanks Yorkist, but I think that I've made the issue over the £205m very clear over the past several months.

If the claim is now agreed at £254.3 then our dividends have been underpaid and instead of £71.75m we should have received £89m. If £254.3 is the agreed claim, then a catch-up payment of £17.25 is now due to us.

In G45's example, the £254.3 has been reduced by £71.75. He then suggests that future dividends will be paid as a percentage of the remainder (£182.55). This is not correct. All dividends are based on a percentage of the agreed claim with back payments to make up any shortfall. The remaining 30% would only deliver £54.8m in G45's example, whereas the correct amount should be £76.3. Add this to the back payment due of £17.25 and you get £93.55m.

Your own spreadsheet shows the appropriate sum (65% X 254.3) - £71.75 = £93.55m still to be paid - so I'm not sure why you chose to question my correction to G45.
Ice


Apologies

  • yorkist
  • 01/07/09 31/05/09
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  • Wed, 28/07/2010 - 21:05

Hi Ice,

Apologies, I certainly didn’t intend to question your correction but merely to show the derivation of the £71.75 million number in Gordon 45’s analysis, in hindsight perhaps needlessly.

I also greatly appreciate your tireless efforts to focus continuous attention on those lost £ millions with KSF in the UK. Let us all hope that the £254.3 million will now become the minimum agreed claim and that we can quickly get caught up on the overdue dividends on the additional £49.3 million, which if none of the back payments have been received so far, as of today now stand at £22.185 million (45% of £49.3 million).

Kind regards

Yorkist


Accepted

  • IceCrusher
  • 14/10/08 25/10/11
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  • Thu, 29/07/2010 - 11:49

Hi Yorkist,

Thank you for the public apology, they are not often made, but do clear the air!

I think it's likely that a corrected dividend has been paid for this month (and probably the catch-up too) otherwise there will be £22m outstanding as you suggest; we'll have to see what's in the long-awaited report from the JLs. We were keen to view that so-called 'fuller' report in April, now it looks like being August...

I for one am sadly disappointed by the lack of creditor information emanating from these two 'erberts. They have all the information we crave, but choose to hold onto it until they see fit to let us know -- it is pure power control at its worst and there is nothing we can do about it. They never answer my emails though one of them occasionally speaks to G45 - though without conveying any real substance. We are left to conjecture on tit-bits and scraps that drip-feed from their mighty position.
Ice


Following Ice's comments, is

  • barrona
  • 17/11/08 31/05/09
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  • Thu, 29/07/2010 - 12:07

Following Ice's comments, is there anything we can do to improve the communication between the JL's and ourselves?
I feel we are continually being treated with almost contempt and certainly disdain.


Great work

  • Codpeace
  • 23/10/08 30/11/12
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  • Tue, 27/07/2010 - 19:45

Fantastic job by both Gordon and Ice - Thanks for all the time and effort. It all sounds encouraging, hope it continues.....


Thank you Gordon for your

  • peter and louise
  • 18/10/08 01/09/09
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  • Tue, 27/07/2010 - 08:44

Thank you Gordon for your continued, and much needed, analyses of available data and how you think this may all pan out, eventually. And exactly the same gratitude to you, Icecrusher, for allowing us all to come closer to understanding all the issues at stake and for getting to the core of the matter. For us, reading the postings from the two of you, MORE THAN ANYTHING ELSE since October 2008, has kept us from total despair. Thank you so much.


Me Too

  • calpespain
  • 12/10/08 n/a (free)
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  • Tue, 27/07/2010 - 22:42

Here Here...Thanks again


Hi Gordon, Thanks for your

  • yorkist
  • 01/07/09 31/05/09
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  • Tue, 27/07/2010 - 01:08

Hi Gordon,

Thanks for your recent updated analysis.

I've posted this message as a new thread because I wasn't able to attach my pdf file to a reply to your earlier post, but you should see it has been posted just a few minutes ago.

It has been a while since I posted anything but the recent releases of good news from both KSF IOM and KSF UK compelled me to put pen to paper again.

Anyway, I am attaching an excel spreadsheet, saved as pdf file, in which I’ve developed what I consider at this stage to best and more conservative cases for the potential dividend outcome for depositors.

With the recent new found monies (£49.3 million) due from KSF UK, I am coming up with a conservative estimate of 88.34% versus your own recent estimate of 89.94%.

My assumptions and sources for the figures are all included in the analysis and hopefully I’ve not missed anything. I’ve reverted to your earlier 80% outcome from the KSF IOM loan book but only projected this to the future recoveries from this source. I've also not attempted to come up with estimated timing of future dividends but can always add this later.

Hopefully, the soon to be forthcoming fuller update from the JLs will not blindside us with any negative developments.

I’d appreciate your input.

Regards,

Yorkist


Gordon45 Thank you as ever

  • cande
  • 15/10/08 n/a (free)
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  • Tue, 27/07/2010 - 07:22

Gordon45

Thank you as ever for your excellent work - your sharing it is really appreciated.


Thanks Gordon 45

  • Stunned Mullet
  • 17/10/08 n/a (free)
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  • Mon, 26/07/2010 - 23:31

Appreciate the numbers Gordon. Hope springs eternal, but as you rightly state, lets wait until there's ink on the paper. All the best.


Keep Posting

  • Blades
  • 19/10/08 n/a (free)
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  • Mon, 26/07/2010 - 20:24

Please keep posting.
Your thoughts are greatly appreciated by all of us. Your work and that of others remains very important indeed.
Many, many thanks.


Thanks - Keep Posting

  • dodot
  • 10/10/08 01/06/13
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  • Tue, 27/07/2010 - 11:09

sentiments i share.