SOA/DCS CALCULATOR SHOWS SOA SUPERIOR TO LIQUIDATION FOR ALL

  • Anonymous
  • unspecified
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Posted: Tue, 05/05/2009 - 05:07

In another thread Icecrusher posted his latest SoA/DCS calculator that allows depositors to quantitively compare the SoA and liquidation for their own particular circumstances. I believe the following needs to be highlighted as it is very important at this stage (extract from a reply to the posting):

"......... the latest SoA/DCScalculator by Icecrusher shows the SoA gives higher and quicker returns for all depositors (<10k to >1,000k) for all asset realisations (low, medium and high cases).

"......... If there is no mistake in the calculator, it is obvious that the SOA IS SUPERIOR TO LIQUIDATION FOR ALL DEPOSITORS AND FOR ALL ASSET REALISATIONS."

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@linsco - a few comments

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

I feel a few provisos might not come amiss.

"......... the latest SoA/DCScalculator by Icecrusher shows the SoA gives higher and quicker returns for all depositors (<10k to >1,000k) for all asset realisations (low, medium and high cases)."

NOT EXACTLY - it shows QUICKER returns (unsurprisingly, otherwise why would anyone vote for it?) - but not HIGHER returns (unless assets fail to reach 70% in which case the top-up funding paid out stays in the pot - which gives us a bit more but doesn't of course mean we actually get 70% as some seem to think)

"......... If there is no mistake in the calculator, it is obvious that the SOA IS SUPERIOR TO LIQUIDATION FOR ALL DEPOSITORS AND FOR ALL ASSET REALISATIONS."

Superior quantitatively? Yes IF the DCS performs according to the worst case scenario assumed in these calculations. The figures used are those of Alix and are based (as they say on page 30 of the Explanatory Note in a note from the FSC) on the "minimum funding contribution estimated under the DSC Regulations ... and assumes no loan funding ..." . They also say: "The outcome does not represent a prediction of the actual claims or payment profile under the DCS Regulations in the event that it is triggered". This does seem to suggest that in that event the DCS could (and probably would have to?) perform rather better than is assumed here (for the purpose of selling the SoA?).

SUPERIOR? Quantitatively maybe (probably, in the first years) - provided IoMT really stick to it. Qualitatively? - much more difficult to assess, but it does appear to be full of legal pitfalls (see Done with a Kipper's post, below). Even the proponents of the Scheme are careful to warn you (section 23.1 of Explanatory Notes):

"The examples ... are provided for illustrative purposes only. Creditors should not make their decision to vote for or against the scheme on the basis of these examples. The examples are shown solely to enable creditors to understand how the dividends in the Scheme MAY (my capitals) be accelerated as compared to ... (liquidation plus DCS)."

So the choice is not as clear cut as some like to make out and everyone has to decide for themselves based on their personal situations and needs and their level of trust in IOMG/T. That is what makes it so difficult and agonising.

Good luck to all.


Decision time

  • Anonymous
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  • Tue, 05/05/2009 - 08:42

Thanks for the many discussions on the merits of the SOA vs liquidation/DCS, and for Ice crusher's recent calculator. Without this open and (mostly) informed discussion, the last months and the decision on how to vote would have been even more difficult for us.

My husband and I have now made our own decisions, having tried to keep our minds open, and have certainly not been "bullied" into anything by anybody. We have decided that despite the possible (but by no means certain) small improvements in timing of early payments under the SOA, for us there are far too many qualitative issues on the downside. Add to that that we have no faith or trust whatsoever in the IOMG, and we are not prepared to take the risk of the SOA.

We will both give our (class 2) proxy votes to the DAG team, and furthermore they will be discretionary votes to allow flexibility in case the situation changes significantly before the day of the vote.

Obviously, we all have to make our own decisions based on our own situations and opinions, and we wish everyone the best in coming to their own conclusions. Thanks to the many contributors to this site who have helped us to reach ours.


Linsco - a word of caution

  • Done like a Kipper
  • 10/10/08 n/a (free)
  • a depositor
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  • Tue, 05/05/2009 - 06:43

Linsco - even if I were to concur with your findings regarding the SOA, it still doesn't change the legal advice or the legal analysis of the detail contained within the SOA.

By all means vote for the SOA if you are 100% certain that the IOMG will be honourable for the next 'x' number of years. In my opinion as the IOMG has not shown itself in anything but a bad light thus far, I cannot put my trust in them to be any different in the future.


I agree Caution

  • banditman
  • 21/01/09 31/05/09
  • a depositor
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  • Tue, 05/05/2009 - 07:37

Totaly agree with you done like a kipper


agree as well

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Tue, 05/05/2009 - 14:32

We have decided to go with the DAG legal team giving Stuart Roberts our discretionary votes. No trust in the IOM.