Recent email re whether or not to claim DCS

  • hamlyn
  • 24/11/08 22/06/09
  • a depositor
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Posted: Tue, 23/06/2009 - 16:47

My apologies, I do not know how this forum works, but need some clarification on the recent advice which I received by email by DAG with the heading DAG representation on the creditors' committee. Included was advice on whether ot not to claim from the DCS. The following advice, which I have been waiting for, left me totally baffled:
For those depositors with more money on deposit than (2) and 15% of whose deposit is less than their maximum entitlement under DCS (see above), if they claim from the DCS they are likely to get more by way of their first payment than if they claim only under the liquidation but overall they will probably not recover any more of their deposit. For a single non-commercial depositor, this means those with more than approx £70,000 and less than approx £350,000 on deposit with the bank. This group of depositors have to think carefully and make their own decisions about whether they want to take the risk of assigning their full rights in the liquidation to the FSC in order to gain what is likely to be a timing advantage only.

I replied to the email with a question, but I don't know if replies get through to 'noreply'. I repeat my questions here in hopes that this is the right place, although I don't know how I will receive a reply. Do I have to check here or will I get a reply by email?

My deposits would fall into the third category, the least straight forward of the options.

Is the advice saying that if I claim from the DCS that I would get only GBP50,000 and then nothing more from liquidation if this yields in excess of GBP50,000? My understanding was that IOM would claim back any distributions up to GBP50,000 and then further distributions would be assigned to me. The first distribution under liquidation will be less than the full amount of the DCS, meaning I could get this amount sooner than waiting for subsequent distributions, which are an unknown at this stage. I really need as much money as I can get sooner rather than later, but I don’t want to risk being limited by only GBP50,000.

I have been waiting for advice from DAG on this, as I am currently living in the USA and have to consider the time it would take to post the claim documents. I also think it is really a poor show by IOM that the deadline was not extended until after the Creditors meeting.

I hope I can receive a reply, as I am totally confused.

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Clarification on DCS claims & deadline

  • columbgc
  • 11/10/08 14/07/10
  • a depositor
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  • Thu, 02/07/2009 - 08:15

This is what I received from DCS Scheme Agent when asking about DCS claims deadline. Hope it helps others.

Mr xxxxxx

Please note that the only time issue is that we have stated that claims received fully before 4 July will be guaranteed to be in the first payment run. However, this does not mean that later submissions will suffer major delays in receiving payment. There will be frequent payment runs as claims are agreed. Accordingly you do not have any significant time pressure. The absolute final date for claims is 18 months after the date of default ie October 2010.

Many claimants are understandably wishing to confirm that the Scheme Manager has received the signed assignment documents. However, we are currently receiving many hundreds per day and the logging process is under way.

Can I request that you please be patient and check the Claim Summary online, where the receipt will be acknowledged. At this time, we do not wish to divert resources into searches for individual forms.

Kind Regards,

Morris Kelly

Scheme Agent


What do £70,000-£350,000 people do

  • Jo
  • 13/10/08 31/08/09
  • unspecified
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  • Tue, 23/06/2009 - 21:08

It is helpful to have other members' comments on their understanding. However, the information from DAG does give the impression that, if people in the £70,000-£350,000 bracket apply under DCS, they will not get any money back beyond the £50,000 of the DCS. It would be helpful to have a clear, authoritative statement from Edwin Coe which clarifies exactly what the position is, so that we are clear about whether or not to apply under DCS.


What do £70,000-£350,000 people do

  • Anonymous
  • Offline
  • Tue, 23/06/2009 - 22:57

If the information from DAG gives the impression obtained by Jo, then that is my fault as it was certainly not the intention.

Those in the £70-350k bracket will be paid compensation by the DCS and thereafter continue to recover money in the liquidation by way of dividends once the DCS has itself recovered the sum paid in compensation. Those depositors will not do any better in terms of total money recovered under the (DCS + liquidation) than they would under the liquidation alone, but there may be a gain in terms of speed of recovery of the first £50k or however much they are entitled to under the DCS.


Claryfication on pros & cons between DCS and Liquidation

  • takasen
  • 06/05/09 31/05/09
  • a depositor
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  • Tue, 23/06/2009 - 19:29

I'm in the same boat with the deposit of just over £200,000 and now regret that I've sent the signed forms to DCS yesterday with the deadline approaching and no claryfication on pros & cons between DCS and Liquidation available from anywhere.

I moved to Continental Europe where it would be extremely difficult to find capable lawyers who are able to provide advices so quickly on such lengthy, complicated and rare cases. I can not afford to ask for legal advice anyway anymore especially as I have been made redundant recently exactly as a result of the world financial crisis. Moreover I was diagnosed for a cancer last summer and am receiving another chemo next week. The money I originally deposited with the Derbyshire was simply for keeping security against these bad lucks,,,

I waited claryfication on the subject from DAG's legal adviser or DST, as I simply/stupidly do not know how to raise my questions with them here. Having received last night the noreply e-mail from DST stating ",,,but overall they will probably not recover any more of their deposit. ,,,", I got even more confused and worried. Plus, we were asked now not to respond before the DCS's deadline for the sake of the effective proxy voting for the forthcoming creditors' committee and I can only apology that I could not help ourselves on this proxy voting.

Things look too late now, but I appreiciate if DAG's legal adviser or DST still clarify the subject especially on financial disadvantages by choosing the DCS and the major/crucial disadvantages in assigning to the Scheme Manager the benefit of all such claims, rights, privileges and benefits I have had just in case I could cancel my application to DCS. Does anybody know how to cancel it, I try for myself and the effective proxy voting. After these 8 months things look till very bad, but I try at least to keep my brave face for the future of me, my wife and our 5 and 8 years old boys.


@hamlyn

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Tue, 23/06/2009 - 19:20

Just to reassure you - claiming DCS will NOT limit you to GBP 50K; once IOMT has recovered from the liquidation the 50K they will (hopefully) have paid out, you will then get your percentage share of the assets realised by the liquidator (assuming that comes to more than 50K, as you suggest), possibly reduced by the recovery costs to the DCS. The difference is that this will be claimed on your behalf by the DCS and then paid by them to you, rather than coming directly from the liquidator; ie you are not giving up your right to your money, but rather your right to claim it directly.

However, if you claim before the creditors' committee meeting on 7th July, you will not be able to vote and thus to support DAG's candidates for the committee. So, as Bellyup says, if you can afford to WAIT until after 7th July - and also send in your proxy vote and proof of debt form to the liquidator before 3 July - you will be helping DAG to exert maximum influence over the liquidation process. This may mean waiting a little longer to receive your 50K from the DCS, so only you can decide.

I am in a similar situation to you and have decided to wait in order to be able to vote.

I hope this helps - and that others will confirm what I say. Best regards.


anrigaut's posting above

  • Anonymous
  • Offline
  • Tue, 23/06/2009 - 21:50

I can confirm that anrigaut's understanding is exactly the same as my own


Thanks elgee. Your comments

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Tue, 23/06/2009 - 22:06

Thanks elgee. Your comments on the follow-up postings below would also be much appreciated.


Question for Anrigaut

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Tue, 23/06/2009 - 21:14

I read your reply above. I was under the impression that you could not apply under the Liquidation and then later, after the 7th July meeting, apply for the DCS. I would very much welcome knowing where you find this information. If you apply after the 7th for DCS you must then have to cancel your application to the Liquidator?


DAGST - please confirm (or not)

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 23/06/2009 - 21:55

jmf:

A good question, to which a clear unambiguous answer from DAGST is needed. In fact, I have not seen this stated explicitly anywhere and am somewhat unclear how it will work, but am assuming it is so. After all, the DST blog says:
"The DST ask that provided your financial circumstances allow, please only apply for the DCS after the Creditor Meeting i.e. 8th July where the voting power of your account balance can be harnessed by the DST to achieve it’s aims for the Creditor Committee/Liquidator."

And I fail to see how the voting power of my vote can be harnessed if I am not allowed to vote, and to vote I have to complete the "proof of debt" form as well as the proxy form... I did think that I could perhaps send this only by email (or fax) - which is allowed for voting but not for actually claiming - and then apply for the DCS immediately after the creditors' meeting. That way I would effectively not be claiming from the liquidation, thus avoiding any complications. On the other hand, given that the DCS payments may be delayed by claiming after 30 June (for how long no-one knows, but maybe until well after the first liquidation dividend is paid), maybe this would be stupid as I could at least get back the 14.5% or whatever.

I guess the DCS would make sure that any claim made to the liquidation was reassigned to them and that any dividend received would be taken into account (I would be obliged to inform them). I can findno explicit mention of this on the DCS forms, but it does say that "any compensation you receive or have received from another source may be deducted from any compensation to which you may be entitled under the Scheme". Question 6 of section 3 of the DCS claim form (posted on the public site) relates to this, though it's not clear to me whether dividend payments come under "compensation under any guarantee or any other scheme for protecting depositors".

Clear guidance from the legal team is sorely needed ... DST - PLEASE HELP!


@DAGST - please confirm (or not)

  • Anonymous
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  • Tue, 23/06/2009 - 22:52

I can't give an authoritative answer because DST is still in the process of sorting out with DCS the simpler questions appearing in posted correspondence and it looks like that alone will take some time. The common-sense answer is that if a claim is first made in the liquidation and then subsequently made to the DCS before the liquidation has paid a dividend, then the operation of the full assignment required by the DCS will void the claim made by the depositor in the liquidation and replace it with a claim made by the DCS standing in the shoes of the depositor. If the DCS claim is made after payment of the first dividend, then I think the same will happen but the size of the depositor's DCS claim will be reduced by the amount of the first dividend.


Common sense ?

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 24/06/2009 - 08:07

Thanks again. Yes - I agree that would appear to be the common sense answer, but since common sense has not always prevailed in this whole fiasco I shall wait a bit longer for any further clarification before sending in the forms.


Wait

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Tue, 23/06/2009 - 17:47

Wait and if you want to claim the DSC do so AFTER the creditors committee meeting.

We have waited so long whats a few more days?


Liquidation & DCS

  • Julienne
  • 16/10/08 31/08/09
  • a depositor
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  • Tue, 23/06/2009 - 21:51

I too am in the same position as to being better off in the short term with a DCS claim but am waiting so I can vote by proxy at the creditiors committee meeeting .

However I was under the impression that you couldn't clain DCS after you had sent proof of debt and proxy forms to the Liquidator for a claim ---- How would you cancel the claim with the liquidator and replace it with the DCS claim?

What rights EXACTLY are we relinquishing when we apply for DCS - a layman's analysis would be appreciated by a few it would seem.

Thanks


@Julienne

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 23/06/2009 - 22:03

"However I was under the impression that you couldn't clain DCS after you had sent proof of debt and proxy forms to the Liquidator for a claim ---- How would you cancel the claim with the liquidator and replace it with the DCS claim?"

Well, it doesn't seem to say anywhere that you can't - but nor does anything say that you can! And I thought the LP and DCS were supposed to be working together to make it as simple as possible - my eye!

IMO, the DCS would make sure any claim in the liquidation was cancelled - see my post above in reply to jmf (written while you were writing yours).


Clarity

  • smallloser
  • 25/06/09 31/05/09
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  • Thu, 25/06/2009 - 15:51

The deadline to claim in the DCS of 4 July is not a definitive deadline to the scheme, just to be guaranteed inclusion in the first compensation payment. You can, if you wish, prove in the liquidation, cast your vote, and then submit a claim in the DCS.

The impact of this is that your compensation may be delayed but it will still be received within a relatively short period of time after the first payments have been made.


Re clarity

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Thu, 25/06/2009 - 16:04

Yes - that is my understanding and I don't see how it can be otherwise. However, several depositors have been told otherwise by the DCS phone operators (see posts under DCS Online claims) - ie that claiming under DCS AFTER submitting a proof of debt form to the liquidator (a pre-requisite for voting) will not be allowed. I believe this to be incorrect information (deliberate or not?), but it is nevertheless disturbing.

Accordingly I have a) emailed the DCS Scheme for clarification and b) contacted DST to request that they provide clear advice.


Thanks anrigaut

  • Julienne
  • 16/10/08 31/08/09
  • a depositor
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  • Wed, 24/06/2009 - 20:32

anrigaut - thanks for the post above - we wait for a definitive answer from DST


Voting before claiming DCS

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Mon, 29/06/2009 - 19:14

Here is the email I just received from the DCS Scheme in response to mine. It clearly CONFIRMS what I understood - that we can indeed submit the proof of debt form to the Liquidator, vote at the creditors' meeting and THEN apply for the DCS. This is what I am doing and I hope this confirmation is not too late to allow others to do the same.

"Apologies for the delay in responding to you, we are experiencing very heavy email traffic at present. Our advice on this matter is as follows, and all those manning the phoneline have been given the same information. I will doublecheck with them tomorrow that there are no misunderstandings, but wanted first to ask if you are sure that such advice was given by the DCS phoneline?

If you have registered for DCS and signed your assignment form, then you have assigned all your rights to us and we will act on your behalf. In that situation, the return of a Proof of Debt/Proxy form is unnecessary, and indeed meaningless.

However, if for any reason you have not yet signed the assignment form and you wish to vote in early July with regard to the KSFIOM liquidator's appointment, then there would be sense in returning a Proof of Debt form, as without it you would not be entitled to vote. You could then register for DCS after that - this may mean you miss out on the first payment round, but we do not anticipate significant delays prior to the subsequent payment rounds.

As the liquidation proceeds and distributions are made, the DCS will recover the compensation payment. Once the compensation has been fully recovered, any further distributions by the liquidator will be redirected to you. .

The assignment transfers all the right in the account (and any other accounts with the bank) to the DCS. If, after the recovery of the compensation, you actively wish the DCS to re-assign the rights to you, it is perfectly willing to do so. The re-direct approach for the actual payments will not require formal re-assignment.

I hope that clarifies matters.

Regards

Micky Swindale

Scheme Agent "

PS I don't know why my text above came out so big - must be something to do with ng's recent changes, which have also produced larges spaces at the end of all messages...


Voting before claiming DCS

  • Anonymous
  • Offline
  • Mon, 29/06/2009 - 21:37

Anrigaut: that email from Mr Swindale sound reasonable and concurs with what Edwin Coe has been told.


Vote before DCS

  • Codpeace
  • 23/10/08 30/11/12
  • unspecified
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  • Mon, 29/06/2009 - 19:33

Thanks for your most informative post. I do wonder that the IOM misinformation team were working hard to get as many accounts as possible assigned by subterfuge. Still cannot undersatnd why the whole balance of the account should be assigned for a max payout of 50k. Then again when the scheme is run by Micky Swindle (not sure if I spelt that right?) what chance do we have????