Questions for Mike Simpson LP - for May 61st 2009

  • frog
  • 10/10/08 13/09/09
  • a depositor
  • Offline
Posted: Wed, 29/04/2009 - 19:40

Dear all,

Here are the questions collated for Mike Simpson for Froday afternoon's call at 4pm BST

Regards to all.

General Questions

  1. What is the current cash balance for the bank?

  2. How much interest has been earned so far?

  3. Any news about the KSFUK deposit from E&Y?

  4. What is the latest status on the sale of the loan book and any other interest in the purchase of the bank?

Open Questions

  1. Can we have a breakdown of the type and quantity of individual depositors/entities?

  2. Can we have a breakdown of the balance sheet in multicurrency (£, $ and Euro)

This Week’s Questions

  1. On page 44 of the Explanatory Statement, Part F, section 33.12.2 it states the individuals with £50,000 or less will be repaid within two years of the scheme becoming effective. This should read within one year as is indicated elsewhere throughout the document. Oversight no doubt.
  2. Has the LP put it to IOMG that it may be worth them purchasing the bank rather than wasting its taxpayers cash on the SOA? For the relatively modest sum (approx 100 million) it could rescue its banking industry (circa 70 BILLION) and probably make money on the deal with the returns from KSF UK likely to be more than 50%. The IOM depositors would probably remain loyal to the new bank and lots of bondholders are locked in to long-term bonds so a run on the bank is unlikely. Existing depositors may even be willing to support such a scheme and leave their money in for a period of time. 
 This idea was suggested ages ago I know but it still seems the common sense approach to me. They may try and hide behind the lame excuses offered in the past but surely this option is not insurmountable, as other governments have done it.
  3. In the case of liquidation (SOA voted down), what is the LP's current best estimate of
- a) the minimum initial percent dividend and
- b) the most probable initial percent dividend
 when would he expect these dividends to be paid?
  4. Can he confirm that this dividend part of the first distribution (i.e. before any top-up) would be the same under the proposed SOA? If not, please explain...
    Also in the balance sheet on page 57, it makes little sense. In comparing it to the first one he published (looking only at the book values) - suddenly £154M has appeared as a asset - being the repo agreements with KSFUK, so the assets go from £982M to £1,104M.
    Bearing that in mind, and with the liabilities being the same in both sheets, the bank goes from having net assets of £76M in the first statement - to a liability of £186.2M - surely it should be net assets of £198M? One of these is wrong - and I believe it is the latest one...
  5. When replying to e-mail queries wouldn't it be more efficient, and less expensive in administration costs, to reply by e-mail? Are there legal restraints preventing you from using this method? Rather than sending what appears to be an irrelevant generic two-page letter as an answer to queries, wouldn't it be simpler to say "I don't know" or "I do know the answer to your queries, but am not allowed to tell you at this time"?
  6. We know this:
    No. Of Customers No. Of Accounts Amount (£)
    Individuals 5,248 6,538 303,391,801
    Joint 3,114 3,937 174,397,037
    Company 797 1,242 108,515,768
    Trust 229 372 17,664,124
    Insurance Companies 1,970 1,970 289,876,074
    11,358 14,059 893,844,804

Source: Bank Records
And we also know that 7297 accounts have balances of less than £50K and worth £109M, with 3200 accounts having greater than £50K worth £770M (Conf call with LP on 12th Jan) and that 2,000 depositors will be fully paid out with EPS2 (the £10K payment)
This means that there are 5297 accounts with less than £50K and 3200 accounts with more for which company accounts and life accounts must be in there - so the Insurance companies have 6 votes but £300M of the class 3 position, while individuals would have 1200 votes and over £300M of the value. This really contradicts the generally perceived position that the Insurance Companies have the bulk of the cash but not the votes....
Q for Mike Simpson is - is this correct, or if not, could he provide the true vote distribution for all 3 classes.
7. Can MS please provide a simple spreadsheet to allow depositors to make a proper comparison (of the estimated timing and amount of each payout) between the SoA and DCS Liquidation routes?
8. FX holders could actually be paid out in the currency of their original deposit, at least for the first payment. Would this be possible? And if not why not?
9. Regarding the future appointment of a Liquidator or Administrator, please confirm the basis upon which the firm will be appointed. In particular, will the appointment be determined by a "beauty parade" to determine which firm offers the best value to creditors considering both fees and experience.
1. I may have misinterpreted the SoA but I believe that the payments at the distribution dates are maximi. 
My question is what will happen if additional funds are available for distribution on the various dates, which would exceed the maximi specified in the SoA. 
For example on the first distribution date, under the SoA the maximum distribution would be £20k.
10. Please ask about the distribution to joint account holders under liquidation and SOA. Percentages were specified in Lovett’s 3rd affidavit i.e. 12.5%, 7.5% etc. Do these % still apply, as they were not specified in the latest affidavit? 
In the case of joint account holders would the distribution be 12.5% of the total in the account or 12.5% of the total in the account to one account holder and 12.5% to the other account holder as well (dream on), assuming that these amounts are higher than the minimum SOA/DCS payout. If the joint account holders have, say 3 accounts, how will this affect the distribution? eg.12.5% of all 3 accounts?
11. If the amount available for distribution by July 2009 is higher than the %s specified in the Lovett affidavit, who will decide what and when these funds will be distributed?
12. If I recall correctly, at the tele-conference on 6th April Mike Simpson advised that under the SOA interest payable to depositors up to 8th October 2008 would be part of the principal for reimbursement. However, this appears contrary to Clause 27.1, which limits interest to 5%, or the contract rate whatever is less. Can he clarify the position under the SOA (and under liquidation)?
13. Is it the case that under liquidation depositors' entitlement to interest would continue until maturity of their time deposits or the (future) court ordered date of liquidation of KSFIOM whichever is the earlier? What is the case under the SOA?
14. Under Liquidation would depositors be entitled to interest after the date KSFIOM went into liquidation until their funds were returned to them? If so how would the interest rate be determined?
15. Under the SOA would depositors be entitled to any interest after 9th April 2009 (mentioned in Clause 27.2)? If so how would the interest rate be determined?
16. Is there any material difference between interest entitlements under the SOA and Liquidation?
17. I should also like to ask Mike Simpson when he would be issuing a comprehensive status report (similar to the recent report issued by E & Y about KSFUK?
18. What are the costs to date for the services of the LP and his staff excluding all work conducted on the SOA?
19. What are the costs to date for the work conducted by the LP and his staff on the SOA?
20. Is it intended that the LP will invoice the IOMG for work conducted on the SOA? 
 If it is not intended to claim back depositors' funds paid to the LP in expenditure on the SOA, will he please provide detailed reasoning?
21. From what web site are Legal Proxy Forms available from Internet? 
 After completing Legal Proxy Forms and appointing my Proxy Representative could Signed Legal Proxy Forms be e-mailed and to what e-mail address?
22. E & Y estimate that the total distributions at KSF will be a minimum of 50%. Given the tightly-interwoven nature of the relationship between KSFIOM and KSF is there any reason to anticipate that the total distributions at KSFIOM will be more than 50% due to other deals between them?
23. The E&Y also reports that the setoff attempts by UK Building Societies have failed. The report has also stated that the setoff position between KSFUK and KSFIOM will soon be settled. Are you still confident setoff will apply?
24. The E&Y report states that the CDs bought on behalf of KSFIOM will be fully returned to KSFIOM. Is this true then that the 50M GBP+ of CDs are now going to be returned and what is the timescale as I understand the CDs were short-term
25. When will he know more about the other disputed CD's?
26. Under the present SoA, can the parental guarantee from Iceland still be enforced?
27. In the interests of full disclosure, and given the forthcoming vote on the SOA, please can you now disclose the legal opinion you obtained from UK counsel on the status of in-flight transfers? This will then allow depositors in this situation (approx 10% by value of all depositors) to make an informed decision on whether to accept the SOA and its limitations (under Clause 8) on depositors taking action on assets, which may belong to KSFIOM held in KSF London. Otherwise, the LP is in effect encouraging those with in flight claims to reject the SOA, push for liquidation and then, via the Creditors Committee, require the Liquidator to disclose this document at a later date. Claiming "client privilege" is not an appropriate response to this question, since it would be easy to overcome this and provide all depositors with the full information they deserve to make an informed decision.
28. I understand from previous conference calls that it has not been possible to find a buyer on reasonable terms for the Loan Book albeit it is regarded to be of "good quality".
29. Is it the case that the interest rates being charged on the loans is much higher than would currently be the available in the market for new loans? And if so, is there any scope for facilitating individual borrowers remortgaging their loans with others and hence for earlier repayment of loans to KSFIOM? Obviously individual borrowers could not be forced to remortgage but it would appear to be financially beneficial for them and allow earlier repayment to depositors.
30. Does the latest news from e&y mean Mike Simpson now recommends liquidation over soa?

Your rating: None Average: 5 (11 votes)

Comment viewing options
Select your preferred way to display the comments and click "Save settings" to activate your changes.

@Frog. Way to go!

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Wed, 06/05/2009 - 07:58

It'll work.
Welcome to politics.

Legal ramifications re: late forms?

  • Anonymous
  • Offline
  • Tue, 05/05/2009 - 15:50

I live in Canada and like many others have yet to receive our voting forms. While this does not pose a problem for me, as I've downloaded copies from the bank site, it does cause me to wonder about the 50 to 75% of depositors who are not registered on this site who may also not have received the forms. They may not know that they can download the forms and even if they do may not have the means to do so.

It is my understanding that the Court stated that the forms were to be mailed 28 days prior to the vote. That wasn't provided as they were only mailed out on the 27th of April. If we in a large city in Canada haven't received the forms as yet, how the blazes will those in more remote areas of the world, not connected to the internet, be expected to cast their vote on time. Are there any legal ramifications attached to this?

Late forms?

  • tonycBrisbaneOz
  • 12/10/08 31/05/13
  • a depositor
  • Offline
  • Wed, 06/05/2009 - 03:11

I live in Brisbane in Australia (as you may have guessed), the 3rd largest city in the country and I haven't received my forms.

28 days before the 19th of May is the 21st of April, 15 days have elapsed since that date and I sure it doesn't normally take that long to get letters from the UK. It only takes 4-5 business days to send them the other way according to Australia Post. I shall be checking the post mark very carefully if they arrive. Meanwhile I've resorting to downloading as others have.

Regards, TonyC

No forms yet either - in Dublin

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
  • Offline
  • Wed, 06/05/2009 - 07:33

I am a mere 25 minute flight from the IOM and have not received the forms yet. Is there any possible believable explanation for this? In my view it is simply another entry in a catalogue of deceipt from the IOMG.

tony C

  • sad
  • 10/10/08 31/10/09
  • a depositor
  • Offline
  • Wed, 06/05/2009 - 03:25

singapore....I received mine yesterday, my husband still has not got his. As they came in a pre-paid envelope there is no postmark! How convenient....... I think most people on this site know they can download forms etc etc but what about the rest...some may not even know voting forms are on the way to them!!

We could always do as 'frog' has done and lengthen May to 61 days.....sorry, couldnt resist!

I agree this must be wrong

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Tue, 05/05/2009 - 23:15

I have yet to receive my forms ( no problem as i too have downloaded scanned and sent.)

It may not be but it almost looks like this is deliberate.

@ Frog

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Tue, 05/05/2009 - 15:10

Frog - any idea when last Friday's conference call will be posted by MS? I know there's been a bank holiday in UK, but nothing on his site yet. In the meantime, any chance you can give us the key points - if any? Thanks for all your efforts on this.

Withdrawn page from Website

  • Codpeace
  • 23/10/08 30/11/12
  • unspecified
  • Offline
  • Fri, 01/05/2009 - 11:42

Probably too late but I would appreciate if you can ask him to re-instate the apr 28 page on the bank website - if not can you ask him why it was withdrawn

I did ask, he said there

  • frog
  • 10/10/08 13/09/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 22:26

I did ask, he said there were 'problems' with it. Didn't seem to be aware why it was withdrawn.

Thanks, frog

  • Codpeace
  • 23/10/08 30/11/12
  • unspecified
  • Offline
  • Sat, 02/05/2009 - 12:38

Hope someone did manage to get a copy to the DST

I did ask, he said there

  • Anonymous
  • Offline
  • Fri, 01/05/2009 - 23:22

frog: I would hazard a guess that they were legal problems, having read extracts above, in that he disclosed more than they wanted to become known. Suggest whoever managed to get a copy of the pages in question emails to DAG ST so that they can be passed on appropriately.

Mike Simpson's website

  • jmf
  • 16/10/08 31/10/09
  • a depositor
  • Offline
  • Thu, 30/04/2009 - 17:05

I think the change to the three creditor voting groups has caused a lot of people anxiety especially as, according to posts on the DAG site, some people have completed and sent in the wrong form. If there are any more changes before voting can he post them clearly on his site.

Does Mike Simpson still support SOA .

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
  • Offline
  • Thu, 30/04/2009 - 16:44

Please ask Mike Simpson if he still supports the SOA given that his lower bound estimate for recovery is 74% and under the SOA the IOMT claws back at 70% ? Also once 70% is achieved will further payments to depositors be on hold until IOMT completes its clawback ?

Q 6

  • coldlightofday
  • 20/10/08 31/08/09
  • a depositor
  • Offline
  • Wed, 29/04/2009 - 21:28

is class 3 now class 2?

class 2& 3

  • Julie
  • 03/12/08 14/07/09
  • a depositor
  • Offline
  • Thu, 30/04/2009 - 14:25

Do >50,000 not vote in both 2&3 (on red & blue) or just red.

buyer for bank

  • chd
  • 13/10/08 30/09/09
  • a depositor
  • Offline
  • Thu, 30/04/2009 - 14:55

I had asked this question but can't see it on the list.

  1. With news from E & Y that there will be at least 50% from UK, have any parties shown an interest in buying the bank?

Look at Q4 - general

  • frog
  • 10/10/08 13/09/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 18:37

Look at Q4 - general questions.

It was discussed and the answer is no.

I might suggest that...

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Fri, 01/05/2009 - 23:17

through their machinations the IoMG has completely scotched any commercial interest in the purchase of the bank.

Yet another truly admirable success for the IoMG Hooray Mr Bell and Mr Brown.

I suggest that the readers, once again, and I'm not insulting their intelligence, ask what exactly are this IoMG's goals in this debacle?

Are they acting for themselves, or for us?