SoA Revisons Announced in IoM Today
New hope for Kaupthing Singer Friedlander (IoM) depositors
Published Date:
24 April 2009
By ADRIAN DARBYSHIRE
THERE's some welcome news at last for Kaupthing Singer and Friedlander (IoM)depositors after administrators confirmed that creditors could get back at least 50p in the £1 from the sister bank in London.
And now on the back of the better than expected estimated returns, the Manx Treasury has lodged with the high court proposals for an improved scheme of arrangement.
That scheme, which is shortly to be voted upon by the creditors, guarantees scheduled payments to depositors as an alternative to liquidation of the bank.
Details of the improved scheme were due to be made public later today.
They are expected to include a higher total return for all depositors and a speedier return for those owed less than £50,000.
Some £557 million - £402 million net - was trapped when the Kaupthing Singer & Friedlander bank in London was placed into administration, a move that prompted the collapse of KSF (IoM) in October last year, leaving 10,000 customers owed at least £840 million.
Now the long-awaited estimates of recoveries by the administrators of the UK bank have been revealed and they show a better than expected figure of at least 50p in the £1.
This means that the provisional liquidator of KSF (IoM) could get back at least £201 million of the trapped sum.
Administrators Ernst & Young have warned, however, that the returns will depend on market conditions not deteriorating - and it was clear from the Alistair Darling's Budget this week that the UK economy is in very dire straits.
In a statement to creditors they state: 'On the basis of current forecast recoveries from banking books, prudent estimates of realisation from other assets, and based on the maximum estimates of unsecured claims and current market conditions not deteriorating, the adminstrators currently estimate that total distributions should be 50p in the £1.
'The administrators would stress that the estimate could be lower or higher if there are significant issues which impact either future realisations of the level of claims from creditors.'
The intention is to make a minimum payment of 10p in the £1 in June or July.
John Spellman of Isle of Man Finance said: 'We welcome the fact that some clarity has been provided by the UK.
'It is right to be prudent given that the recovery is 50 per cent, although the figure is better than expected.
'We are working on reflecting those better than expected figures in the scheme of arrangement to be proposed to depositors in the next few weeks.'
Improved outlook for KSF depositors
To add to the above, I pulled this off the government website--
"Improved outlook for Kaupthing Singer & Friedlander IOM depositors
THE Isle of Man Government has welcomed new information from the UK arm of Kaupthing Singer & Friedlander which could mean quicker and higher recoveries for depositors with the bank in the Isle of Man.
Ernst & Young, administrators of the UK bank, this week issued an interim report indicating a possible overall recovery rate of at least 50 per cent for creditors of the UK bank. This is higher than anticipated by the Isle of Man Government, and moves the estimated minimum recovery rate for the local bank from 65 per cent to about 75 per cent.
The improved prospect of returns from the UK could accelerate repayments under the proposed Scheme of Arrangement for Isle of Man depositors, so that individual entitlements of up to £50,000 could be paid in full in 12 months instead of 24 months.
With higher dividends expected, the outlook for larger depositors would be better too. The Isle of Man Treasury has agreed to further defer its ‘catch-up dividend’ from 60 pence in the pound to 70 pence in the pound – which means it would get nothing back under the Scheme of Arrangement until all others creditors had received at least 70 per cent of their claims.
The Scheme of Arrangement has been amended to reflect the latest information from the UK. The revised Scheme and other information are expected to be issued to depositors next week ahead of their vote on the proposal on May 19. If approved, the High Court will be asked to sanction the Scheme on May 27.
Treasury Minister Allan Bell MHK said:
The Scheme of Arrangement, an alternative to liquidation of the company and activation of the Island’s Depositors Compensation Scheme, is designed to provide assured scheduled repayments underpinned by funding from the Treasury, which has £180 million in place to support the Scheme."
50P/₤
50p in the £1. Is from KSF(UK) of owed money to KSF(IOM).
Forget modifying the "Scheme Of Artifice" and probible further delays.
It also benefits the Liquidation process.
Lets get out of the hands of the IOMG and get on with it.
Dave
So when do you expect the
So when do you expect the 50p in the £ to be distributed, tomorrow, next month, next year, 5 years .....?
SOA seems to have zombie like qualities
I wonder if this latest SOA revision will cause any further delay for the start of the repayment of our remaining funds. Since the IOMG now has spent 6 ½ Months on the first draft of the scheme I think it is reasonable to assume that it will not be able to come up with a speedy revision 2. The SOA seems to have zombie like qualities. Every time we put it to rest the IOMG digs it out of the grave. I guess it is in the IOMG interest to delay everything as much as possible no matter what the cost is to the depositors because as long as we are in limbo no funds are paid out.
I say let’s get liquidation at once and avoid more stalling from the IOMG
No way, let em update SOA
It is right to update the SOA in light of new information. There won't be a delay as the principles are the same, just slightly different numbers. Depositors need to vote for/against SOA based on as much accurate info as is available.
I am sure everyone will receive the documentation in the post, evaluate it, and apply their judgement as best they can, regardless of online opinions.
"Online opinion"
I personally don’t have a problem with an update as long as there is no further delay in the voting. I would be surprised though if the IOMG can do this without a postponement in the vote unless they already knew the KSFUK result beforehand and this update is merely a ploy to get people more enthusiastic about the SOA. This is my sincere “Online opinion”
SOA - RIP
I agree - too much delay already. I have lost all respect for IOMG and their scheming. Let's not spend any more time and effort (and legal costs) on looking at yet another half-baked scheme.
Let it rest in peace, never to rise again - call in Shaun the zombie killer!
On with liquidation.