In Reply to Strategy Team update - Stop being Biased - facts only please

  • Gordon 45
  • 22/10/08 n/a (free)
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Posted: Mon, 20/04/2009 - 15:11

Dear Strategy Team,

You have taken quite some time in doing a blog after the Court Hearing on 9.4.2009. It is extensive and reasonably thorough, but unfortunately once again you are showing biase that we do not require from our 'Leaders'. I realise this site is open to all, but we now need facts and figures and once again we are seeing a lot of rheotoric and semantics not backed up by actual data. Now perhaps I am not finding all the information that is available to me on the DAG, and if I am not I apologise, but I don't think all the information discussed at the last court hearing is available to all - I.e. graphs from both sides, dates of payments, actual facts within the SoA, I know there appeared to be some errors, but we are not even seeing these documents.

Anyway for what it is worth, here are my thoughts on your extensive document. No apologies for disagreeing with a number of your statements - we are beyond that now and we need clarity.

  1. You start by saying that the Group was presented with facts and figures re advantages of SoA over Liquidation - do we have these documents in the public domain?

  2. I assume that the copy of the Scheme of arrangement received on 3.4.2009 is the same that we have all now seen. So I assume that the documents provided on the 8.4.2009 and the worked examples have not been given out to all members? I agree to receive them just prior to the court hearing is rubbish and does not help the image of the IOMG.

  3. You then say having considered the Scheme + Explanatory Statement that the DAG came to the conclusion that the Scheme was only advantageous to those with lower deposits and disadvantageous to the remainder. So you have completely ignored the scenario of everyone getting less than 60% and/or that everyone will get back 60% before the IOMG will subordinate it's claim for what it has/will put in - up to £150m + £30m + £19M? I do accept that there is a grey area of when and if we get to 60% that they will claim back all they are due or only 60% of what they are due then. And only then claiming parity of returns - parri passu - with all other creditors for that still owing.

  4. I agree that the court did not endorse the SoA but left it to those voting - that is why we need honesty and clarity.

  5. We know that the life companies are not going to oppose the SoA (and people like myself, who are Bondholders, through no fault of our own in 'Group Deposits' may or may not get a vote - still waiting on our life companies coming forth.

  6. Although we now have three classes of those voting - thanks to yourselves - which in itself shows a biasedness as I am sure you feel the up th £50k depositors now being in their own class may vote against the SoA - thus bringing down the Soa due to numeric numbers. But then again hopefully this class of depositor will look at the options and if they see no appreciable difference - to them - in the two schemes may vote as perhaps most of the HNWDep and bondholders will - for the SoA to allow the other two groups to prevail.

  7. Re Mr Hacker's statements/comments - It was reported in the Manx Herald after the Court hearing that the SoA was for the benefit of the Small Depositors - no mention that previous Affidavits also said it was for the benefitof HNWDep/Bbondholders being reassured of more chance of receiving 60% recovery, by way of subordination of IOMG claims. What we are not seeing as DAG members are the graphs (even if wrong), the latest SoA document and the Explanatory Statement - how are we supposed to make up our minds in an examining manner?

8a. Mr chambers as Advocates do then try and rip to shreds what the other side said - and perhaps with good reason - the errors in the graphs put forward. He also appears to have done his homework re mentioning various facts from various Affidavits - including Mike Simpson. But again, the graphs he produced at (short notice) for the Court - where are they, why have we not ben given access to what they contain? And although there may be no additional money in the SoA over a Liquidation the investment of cash by the IOMG and the timing of returns to them I.e. subordination of claim at 60% recovery to all and hopefully the clarification after that of any residual subordination by way of parri passu definetely guarantees HNWDep /Bondholders - I think - of earlier returns in the middle/later stages of return of monies.

8b. Re the timing of benefits through either scheme, because of constantly changing dates, and dates not being shown in documents I have seen that were in previous Affidavits it is impossible to discuss them. We need again the information that the DAG Strategy Team and others were privy to. Then we can comment.

8c. Re the three classes instead of two - that the DAG Team managed to push through thanks to Mr chambers - I think you have done all HNWdep/Bondholders a dis-service and perhaps make more likely the SoA to fall. you are there to put forward all facts and let people decide - not to attempt to sawy things that could influence the vote. Not to say that the IOMG were not attempting the same thing for their needs. But as said before the IOMG needs and the Life Companies preferences might or may co-incide with HNWDep/Bondholder and still do no harm to the up to £50k depositors. Because I understand quite clearly whether you have £1,000 or £10,000 or £100,000 or £500,000 your money is as important to you as the next person.

8d. Mr Chambers and obviously the DAG Strategy Team feel that because all the graphs show the worst return at 60%, that Mr Chambers says the 'IOMG appears to be very confident that recovery will be at least 60%', that Mr simpson says in the final paragraph of his Affidavit is confident or hopeful that the dividend will exceed 60p in the £ that we should all believe that will be the case and that the IOMG is therefore hopeful of, in reality paying out very little through the SoA. Now hopefully Mr Chambers and our DAG Team are correct and that returns will be more than 60% - a lot more hopefully - but right now after 6.5 months we have nothing - except for those who have received EPS1 & 2 payments(and good for them) - I have 'nt so far, and if we are lucky some might get something after 10/11 months with no guarantee at all for Unprotected Depositors and Bondholders - we have to wait. and for those HNWDepositors, yes they will get their £50k but then they step in line with the unprotected and bondholders until we catch up to the 60%. So our good friend Mr cham,bers may fel we will do better than 60% and he may be highlighting that hte IOMG will then recoup at least 60% of what they are owed at that time - and yes that's unfair to put it mildly - but if that gives me a better chance of reaching at least 60% I want to take it. Because if the money comes inand it goes higher I'll get my share along with everyone else including the IOMG and that's better than nothing or worring like hell what I might not get back.

8e. Mr chambers also mentions the unlikely scenario of another Bank Failure in the IOM and quotes who the parent companies are for existing banks, and that they have the full backing of their parent companies - big deal - so did KSF - IOM. I admit I do not follow what is happening re the £80m out of the £150m but I intend to try and find out whether if we go for the Soa if it all goes in , whereas it appears if we go for Liquidation that only £70m is required. Remember all HNWDepositors/Bondholders in my view if the £150m goes in to the SoA, even if and when 'clawed back' by IOMG we are no worse off than we would have been and I think better off with regard to quicker payment of up to 60% even although that monety does not come to us directly. but the quicker the up to £50k are paid back the quicker we get ours up to 60% - obviously open to othere interpretation here.

  1. The £10m that became £2.8m is of no consequence now in my opinion.

  2. I amongst others await the updated graphs from Mr Hacker's team and the rewording that repayments to IOMG under the 'top up' scheme would not be 100% once all other creditors received back 60%.

  3. I am not sure re the wording in paragraph 18 of the copy of the SoA document that I read. I asssumed (can I say that after all I have said re this kind of wording?) that the IOMG would not claim back 100% of any of their funding when all reached 60% but would claim back their 60% and then would go pro rata - parri passu - with all other remaining claimants as hopefully money kept coming in.

  4. I look forward to receiving the updated documents - the SoA, the explanatory Statement all the graphs and anything else we should receive in order to make an informed decision.

I also look forward to the analysis being done by the DAG Team and their 'calculator' to help us reach a decision.

Although I appear to be against the DAG Team's thoughts I do appreciate the work done by them, often at short notice and I can understand that they/we want a united front to show against the IOMG, the Life Companies and the Liquidator Provisional but we need straight facts and figures not biased wording or assumptions in order that we can all come to our own conclusions. If the IOMG want to go down that route, that is up to them, at stake is all of our futures and perhaps our families, so do not try to make me do a certain thing by using certain semantics etc - we have no cash, need some cash badly and I personally will worry about my balancing 40% once I get my first 60%. And if Mr Chambers, The DAG Team, Mike Simpson and co are correct and we get more than 60% fantastic. and if it is then shown that the IOMG and/or the Life companies have cost us any balance in our investments through their actions I am sure that we will not be slow in letting the world know.

God bless to all,

Gordon 45

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I disagrre with point 6 above

  • Mugged by HMG
  • 08/11/08 31/05/09
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  • Mon, 20/04/2009 - 15:25

In your post you say the following:

"Although we now have three classes of those voting - thanks to yourselves - which in itself shows a biasedness as I am sure you feel the up to £50k depositors now being in their own class may vote against the SoA - thus bringing down the Soa due to numeric numbers."

As I see it there is no advantage in smaller depositors voting against the SOA. I posted the following earlier on another thread:

My main worries concerning liquidation come from the fact that the current cash value of the bank’s assets stands at around 15%. Also, according to the FSC spokesman at the court hearing, if the L-word comes into force and the DCS is triggered, the IoM contribution will be as follows:

“The new DCS only allows for a sum equivalent to the amount needed to make up the money from £20k to £50k compensation to be paid out by Treasury.”

Source: http://www.manxherald.com/index.php/business/485.html

So where will the rest come from?

Now as far as I know the banks contributed nothing to the DCS last year, so in the event of liquidation I have serious concerns as to where the rest of my albeit “guaranteed” compensation is going to come from and how many years it will take to arrive. Certainly the following article (also in the Manx Herald) does not altogether fill me with optimism regarding the DCS:

http://www.manxherald.com/index.php/business/403.html

According to the article Deputy Deemster Corlett was persuaded to grant the Treasury a further adjournment of the winding-up petition - not so much on how good the alternative, and yet to be nailed down, ‘Scheme of Arrangement’ (SoA), will be but - by how poor a ‘safety net’ the Depositors’ Compensation Scheme (DCS) is by comparison.

The article goes on to say, “It can really do the IOM no favours whatsoever by having to effectively admit that the much played on (for publicity purposes) DCS is in fact a ‘financial fig leaf’ and it isn’t really that great after all.”

I’m not sure I want to rely on a financial “fig leaf” to protect my albeit modest life savings.

From what I have understood the larger depositors will suffer possibly heavy and no less unacceptable losses under either scheme. Most of the posts I’ve read on here say there is no advantage in voting for the SOA, but do not suggest there will be any less money returned. If I have understood correctly and this is the case, then I’m not sure I understand the DAG stance, unless it is a case of awaiting greater clarification.


Mugged by HMG - I disagrre with point 6 above new

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Mon, 20/04/2009 - 15:42

Hi There,

If most of the up to £50k depositors vote for liquidation then the SoA could fall due to the numeric vote of 50% must vote for it plus 75% in value. The value lies in the £50K+ dep, bondholders and unprotected Depositors. 71% of all creditors have no more than £50k claims - 10,770 creditors - 71% = 7,646 credotors.

The DCS gives no guarantees to those over £50k(bar £50k) nothing to bondholders or unprotected depositors.

So the DAG Team through Mr Chambers fought and won the battle for 3 groups making it harder for the SoA to prevail. And believe me as I have just written in a reply to the DAG Team - I would rather have more chance of 60% through the SoA - thanks to IOMG cash coming in - then I can worry about the balance of 40%. Hope you are not a HNWDep or bondholder or Unprotected depositor,

Gordon 45


@ Gordon 45 - point 6 etc.

  • mesufish
  • 21/10/08 01/10/15
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  • Mon, 20/04/2009 - 16:36

Whilst it is laudable that everyone wants to look to their own best interest and get as much of their money back as quickly as possible, we do have to try and take a step back and look at the big picture. The forum has become a bit of a squabble between the vociferous among the under and over 50k camps - or rather the under 50s fighting not to be, as they see it, steamrollered by the over 50s. THe overall view is being forgotten.
Laying aside the details of exactly which date will see the payment of which percentage, the fundamental difference between SoA and liquidation is that IoMG retains control of the whole process of SoA - and of MS - and appears to have left open the possibility of changing any dates to suit itself, whereas with liquidation the creditors are in charge and can fire the liquidator if he is not looking after our interests properly. The liquidator is legally bound to work for the best interests of the creditors but under the SoA this is clearly not the case.
Obviously there are worries that the DCS will not pay up straight away, but, looking at the way IoMG is scrabbling to make everything look rosy, they will not be in a position to allow their much-touted 50k guarantee to stumble since the economy of the island depends on confidence in their system. As has been said elsewhere on this site, IoMG is mainly interested in saving face: if SoA goes ahead they will say in public that we are all very happy with their solution and privately they will hang us out to dry while keeping a tight grip on Mike Simpson's balls. That is politics!

For the record, to repeat other posts, I have way over 50k at stake here.


clodhopper

  • clodhopper
  • 18/01/09 31/05/09
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  • Mon, 20/04/2009 - 18:36

Great comment - the IOMG would it seems be in total control of the SoA and Mr Simpson. The liquidation process is controlled through the courts and the Liquidator would have to work for the depositors and not dilly dally about as Mr Simpson appears to have done at our expense for the last six months.


@Gordon 45

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  • Mon, 20/04/2009 - 16:26

Agree entirely with your 60 / 40 point.

Much arithmetic may have been applied to SoA v DCS, but have the risks and probabilities of the costs and consequences of voting NO to the SoA in a worsening financial climate been correctly and adequately considered.

I am a smaller depositor, only £25,000 (but very important to me), and am surprised not to read lots more comments from medium and larger depositors and investors who would prefer their bird in the hand.

VOTE YES TO SoA !!


You're absolutely right

  • Mugged by HMG
  • 08/11/08 31/05/09
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  • Mon, 20/04/2009 - 15:54

Gordon 45, you're absolutely right on the maths.

What I meant was that as far as I can see it there is no advantage whatsoever to be gained by sub £50k depositors voting against the SOA, since the timing of any DCS compensation is terribly uncertain.


I don't doubt DAG wants it harder for SOA to prevail

  • chris watson
  • 23/10/08 31/03/10
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  • Mon, 20/04/2009 - 15:52

And did this by splitting into 3 classes, but I'm not sure I follow your point that the under 50K will vote against SOA.

Nor do I understand how 10,770 - 71% = 7,646.

Sorry


@chris

  • IceCrusher
  • 14/10/08 25/10/11
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  • Mon, 20/04/2009 - 16:00

Gordon 45 says 71% of 10,770 is 7,646, which is correct. I think he just put the - sign as an indicator, not a mathematical sign.


Ah, that would be it then.

  • chris watson
  • 23/10/08 31/03/10
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  • Mon, 20/04/2009 - 16:03

thanks :(


Chris Watson & Icecrusher - Ah, that it would be it then

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Mon, 20/04/2009 - 16:16

Hi folks,

Yes you are right Icecrusher just used a dash, so can see why Chris misunderstood - my apologies.

Re the the under £50ks voting for DCS/Liquidation - with the DAG Team and Mr Chambers spouting forth dates that are 6 months quicker - rightly or wrongly, who knows, you can see why under £50ks might vote for liquidation if their cash is supposedly secure going down that route. My point was that I expect DAG Team to be totally unbiased and give facts and figures - then we decide, not get involved in politics and try and skew voting patterns,

that's all,

Gordon 45