Re-assignment of Rights?
The latest DST update informs us that they are still pursuing the matter of trying to get the rights of those who originally surrendered their rights to the DCS re-assigned to the GLs (gormless liquidators).
The Update states that there are complex legal issues, and that the GLs (needless to say) seem reluctant to pursue the matter at this stage.
Which makes me wonder what, in PRACTICAL terms, have those of us, who surrendered our rights to the DCS, lost, or stand to lose if we leave things as they are?
As far as I am concerned, the DCS is the one arm of the IOM Govt. that has performed relatively competently. It was fairly straightforward to register, the website is simple and easy to use, and so far the payments have been on time. I believe that initially there were some problems, but these seemed to be due to the bank, and not the fault of the DCS.
If we go through the rigmarole of handing things over to the GLs there will just be more hassles, more liquidator's costs, and more legal fees which will ultimately be borne by us.
So why not just allow the DCS to finish the job for us?
Hi Valentine, To be more
Hi Valentine,
To be more accurate, the latest (23 July) DST update says with respect to reassignment of claims: « We continue to monitor the situation closely », not that it is being pursued.
This subject was raised initially with the DCS because a number of depositors clearly felt very strongly about the issue, their decision to claim via the DCS and not directly in the liquidation having been based on assurances by the DCS that reassignment would be possible once the compensation payment had been recovered. It has become clear that, at the time, the DCS had not fully considered the consequences of those assurances and now find they are unable to respect them. While this is unfortunate, I don't believe there was any intention to deceive. Both personally (as one who assigned my rights) and in my dealings with them on behalf of DST, I too have found the DCS agents to be basically competent and helpful, at least once some early problems due to the overwhelming number of claims to be dealt with had been sorted out. The recent addition on their website of a facility to provide claimants with a clear statement of their account, including confirmation of the amount of the agreed claim and updates on payments made, is an example of their reactivity and response to our requests.
I have asked about the possible practical disadvantages to leaving things as they are. As I understand it (though I stand to be corrected), apart from the short delay of around 10 days in receiving liquidation payments, there is nothing to lose in practical terms by remaining with the DCS unless and until the dividend reaches 100%. If that should ever happen (and apparently it no longer seems impossible), then interest would become claimable under the Liquidation and would require reassignment of rights (the DCS would not deal with interest claims). At present, therefore, it seems indeed difficult to argue that costs (reducing the payout for all creditors) should be incurred (by all) for what is currently an academic question (for a minority).
It is however I believe helpful and reassuring that this issue has now been extensively disussed by the Committee of Inspection, as reported in the minutes of their meeting on 29 June. While « it is not proposed to activate the process at this stage », it has been agreed that PwC will go to Court for directions at the stage of the final dividend or « if it becomes likely that dividends will exceed 100% ». In my opinion, and taking into account the interest of all creditors, this is the best outcome that can be realistically expected at the present time. If and when the time comes to activate the process, the groundwork that has been done should hopefully allow it to proceed more smoothly and efficiently than might otherwise be the case.
So no, I personally don't think it's worth actively pursuing this matter further at this point, but I do think it has been worthwhile to get as far as we have.
Delay in receipt of DCS dividend payment
Hi Anrigaut,
I agree that the operation of the DCS has been essentially OK. My compensatoin payment has now been fully recoved and I'd like to be directly paid by the liquidation. The additional delay in receiving payment was 14 days. Why is there this delay? Clearly, the quantum of the dividend payment was known some considerable time before the day of payment on 9th July - it was in the COI minutes of 29th June. Therefore why can't the DCS crunch the numbers in advance of the dividend payment date and then distribute dividends through the DCS on the same day?
Ian
Re delays in receipt of DCS payments
Hi Ian,
All I can do in answer to your question is to cite the explanations posted on the DCS site on 12 July:
"The liquidator made a third distribution of 11.1p on 9 July 2010. As described below, the Scheme Manager must now allocate the funds to the appropriate claimants. Having allocated the distribution the claim accounts will be processed to establish if any recoveries are in excess of the compensation already paid.
When excess payments are due they will be paid to claimants in accordance with the payment details on the claim record. The Scheme Manager will seek to process surplus payments as quickly as possible, however, due care is essential. It will be the target of the Scheme Manager to have payments despatched no later than 23 July 2010."
Personally, I can appreciate that calculating payments due to depositors before distribution of funds by the Liquidators could lead to errors and a possibly more significant loss of time and feel that, in the general scheme of things, a delay of up to two weeks is probably not unreasonable. The system in place at least has the merit that it appears to work, which might not be this case if it is disrupted! I am therefore reluctant to press the DCS further on this point and would suggest that, if you feel strongly about it, you contact the DCS directly.
Delay in receipt of DCS dividend payment
Hi Arrigaut,
I'm disappointed with your response becuase I cannot see where any risk or error could occur.
It's very simple: The liquidator tells the DCS two or three weeks ahead of the distribution date the dividend that will be paid. Given this information, the DCS then calculate the dividends payable to individual accounts. On the distribution date, the DCS receives the dividend and checks that the amount is the same as was earlier indicated by the liquidator. Assuming this is the case, the dividends are distributed by the DCS on the same day that they receive the lump sum from the liquidator. If the sum the DCS receives from the liquidator isn't the same as earlier indicated, then they recalculate and we all have to wait two weeks. I should be grateful if you would reconsider your position and submit this proposal to the DCS on behalf of the depositors who are now trapped in this system.
Ian
Ian, I take your point and
Ian,
I take your point and have now written to Mike Fayle to ask whether the DCS payments could be speeded up along the lines you suggest and will let you know when I have a response.
I would have thought it should be possible to cut down the delay to, say, at most one week. However, I see no way it could be immediate as the money received from the Liquidators would at least have to be cleared in the DCS bank account before any payment could be made. On the last occasion, the distribution was made on a Friday so nothing could happen until after the weekend at the earliest.
Anrigaut
Thank you
Anrigaut,
Thank you - this is appreciated. I'll also contact Mike Fayle. Hopefully it won't be too long before those of us who have fully repaid the DCS can be reassigned to the Liquidation and receive funds directly. Incidentally, I wonder what happens to the ca. £10k in interest that the DCS received whilst the funds were in their account for a couple of weeks?
Ian
Ian, Just to let you know
Iain,
Just to let you know that Mike Fayle is on holiday this week but has said he will reply on his return.
DCS response re surplus payments
Hi Ian & others,
As promised, I have been in contact with Mike Fayle (agent to the Scheme Manager) concerning the timing of 'surplus' liquidation payments to DCS claimants. It does appear that the process is not as simple and straightforward as might be imagined and that the present timetable is probably the best we can hope for at the present time. There is hope however that, with the cooperation of the Liquidators, it can be speeded up from 2011, once the final date limit for claims through the DCS has passed. The matter is to be raised with the Scheme Manager.
Here is Mike Fayle's response:
"There are three key components to the process of paying surplus payments.
1 – reconciliation of the assigned balances
Even though a balance may be assigned at an agreed value, the liquidation throws up amendments from time to time and we still have late claims and disputes that mean the total continues to move. Accordingly the first task is to obtain a full list of assigned balances from the liquidator to ensure that our records are fully reconciled to it. The liquidator assigns the whole balance of an account and does not distinguish between the interests of different claimants – that is the responsibility of the Scheme Manager.
As we approach dividend payment dates we also will have to process the claims of the most recent newly assigned balances. For the most recent dividend we had 20 or so new assignment notifications delivered at the same time, which we had to process before we could move to the surplus calculations. To maximise payments to everyone who may be eligible, this process must be as close to the declaration of the dividend as possible.
2 – declaration of the amount due
To date we have no advance notice of the amount of the dividend to be declared ahead of any other creditor. However, in the light of the matters covered in the paragraph above, advance notice would not actually assist, because the final calculations cannot be done before the reconciliation has been completed.
3 – calculation of the surplus
We gave notice that we would seek to process the surplus payments in 10 working days. The cheques were dispatched on days 7 and 8 and the electronic transfers on days 8 and 9. Based on current practice, I would not be able to commit to a faster timeframe as I think that it is a fair balance between due care and attention on the one part, and the understandable desire of claimants to have their funds as quickly as possible on the other.
The Scheme is able to accept claims under certain circumstances until 27 November 2010 and in practice this means that there will not be a settled assigned base until the first quarter of 2011. I can, however, see that by the time of distributions in 2011 the continuous update of assigned balances is very likely to have ceased. If, therefore, the liquidator is willing to disclose the amount of the distribution to the DCS earlier and we can agree an earlier date for the cut off point for the reconciliation, there will be scope to prepare the groundwork to permit earlier payment of the surpluses. I will raise this with the Scheme Manager with a view to formally requesting the change in approach with the liquidator in due course.
If, as the liquidator has indicated, there is to be an further dividend in 2010, we will not be in a position to change the payment timetable."
Unhelpful DCS
Hi Anrigaut,
Thank you for passing on the response from Mike Fayle. It just amazes me to read comments like "if the liquidator is willing to disclose the amount of the distribution to the DCS earlier...". If the COI know of this two weeks before the distribution date, then why can't the DCS be told at the same time? It just seems the DCS and Liquidators deliberately don't communicate unless they are required to. Frankly, I just want my rights reassigned to the Liquidation as we were originally promised. If there's been any sort of "misunderstanding" then PWC or the people running the DCS should bear the cost of sorting this out.
And what are the DCS doing with the ca. £10k of interest they made on keeping the money for 8 or 9 days? I'm fully aware it's de minimus in the big picture, but there is a principle here.
Ian
Still waiting for our 11.1%
Still waiting for our 11.1% now. I am told that needs 2 signatures and 1 person is off on holiday. Guess what until the day I return to the IOM after my holiday. I asked about interest on late payment which is their fault and they state there is no provision. How convenient. You can bet they have made provision so they get interest!!!!!!
Thank you for letting me
Thank you for letting me know.
Kind regards
Ian
Hi Ian Very interesting
Hi Ian
Very interesting comment
Our first 1k was paid direct to our bank
next 9k also derect in bank
next payment, cheques weeks late
now for the best no payment yet and finally to be told today 29/08 my wifes payment as gone to a Lloyds bank she is not a customer at Lloyd !!!!!!!!!!! Ho they will look into my payment goodness knows where that is? great idea tell us to go DCS
Suzanne Richardson says I will look into it BUT I finnish at 3-30pm today so will contact you Monday GREAT What happend to Friday On IOM, Is there only 1 staff member could be they or trying to get more than 10k interest on monnies owing to us.
Now I have to wait and worry and wonder where is the 11.1% oweing to us till Monday
DCS
What a shambles!!
I think we were duped by the JLs - their lack of advice or contradiction of the DCS statement that the accounts could be reassigned seems extremely negligent to me. It meant that the depositors were not making educated decisions as they were withholding very salient facts at the time. The delay in payments by the DCS is too long given that they know the amounts in advance. However the part I find most guiling is that the depositor is robbed of his right to take action against the JLs, and they have not exactly been exemplary in their actions since day one. I do not like the attitude that they should delay this until the end as this is purely protecting themselves from any action by the depositors who assigned their accounts to the DCS.
It is just plain wrong. I cannot believe that the courts would not easily sanction the reassignment, the DCS are in favour as it reduces their burden, so it is just the JLs being obdurate and not working in the best interests of the depositor.
If in a few years time and we find that the return is diving down because the JLs have failed in some way or another then it will be too late as they will undoubtedly place every obstacle in the way of having the accounts reassigned. We have been misled by PWC and need this to be put right by them – it should be at their cost!