Some Thoughts on the SL's '6 Monthly Progress Report of 9.1.2017
Some thoughts on the SL’s ‘6 Monthly’ Progress Report (9.1.2017).
Having read the latest report I now detail my thoughts on it below. We have not moved much further forwards, and the end of the Liquidation now seems to be heading to Dec17/Jan18, according to the SL. Really disappointing news as it was hoped July 17 might see the end of our prolonged agony. The SL has received some of the Shares and/or the Convertible Notes from the WuC of Kaupthing – he has not said which and sold them on for £135.8k. I post what I think are the main points in the Jan 2017 Progress Report and apologise if I have missed points or disregarded some points that are important to others. The last part loan of £4.4m now overdue (what a surprise) and the ‘Unresolved’/Unclaimed appear to have stayed the same as last time, although back payments have been made.
Page 6, 7(Chart) and page 12 – It is all about interest now as we received 100% of our capital back. Based on current cash balances and hoped for future returns from the KSFIOM Loan book the SL expects to pay some interest on claims in respect of each class of interest. A full repayment of £4.4m (is in Euros) is still expected on this last loan by the SL. And a further Zero to £0.5m equivalent is hoped for from the Kaupthing hf WuC in the form of Shares and Convertible Notes.
Any more returns will be by way of interest we have lost. Creditors entitled to contractual interest in excess of 5% would receive the amount due in excess of 5% up to the 8.10.2008. Around £3.5m required for this. Creditors not entitled to contractual interest would receive 4% on amounts owed up to 8.10.2008. The amount required for this would be small.
Once the above two steps have been completed all creditors will have received interest entitlements up to 8.10.2008. In respect of further interest payments however, the rules for calculating interest in an Isle of Man insolvent liquidation are not straightforward and the Liquidator applied to the Isle of Man High Court in June 2016 for directions. The situation has moved forward and we now await the outcome of the continuing Application, set for hearing on 23rd March 2017.
Page 6 - It is intended that one further dividend will be paid to creditors in respect of each class of interest. Timing and amount will depend on realisation of remaining assets. To me that means Loan Book, ‘Unresolved’, PG and Litigation. I think the SL’s wording also infers that this final payment would include any contractual and non contractual interest to those due it, plus any cash left over to pay out in interest to all unsecured creditors. Some or all of you may have a different view on this from mine.
We can expect a further ‘6 monthly’ update dated 9.7.2017 (Page 6).
Returns from KSFIOM loan book are currently 94.65% (page 7 – by deduction) – estimated returns have moved up from previous 95.628% to 95.709% (by deduction), (Page 7 chart).
‘Write – offs’ now £16.4m (3.942%) of the loan book - very low. If no more cash came in and we added the £4.4m due from the last loan to the £16.4m that would mean a loss of £20.8m or a 5% loss. That would be a fantastic achievement by the SL.
Page 13 re Unresolved & Unclaimed. SL still showing £2.5m Unresolved and £1.5m Unclaimed. Keep hoping SL will finalise ‘Unresolved’ claims. ‘Unclaimed’ has to wait until the end of the Liquidation Process.
Page 7 & 12 – Parental Guarantee – SL has now received cash/non-cash elements of settlement totalling £433k of the £960k agreed. Expecting to receive between Zero and another £0.5m (I think in non – cash element part of the settlement).
Page 12 - Investigation – This is in relation to the Bank’s Directors re the ‘winding up order’. A report on the investigation and potential follow up actions was put to the COI on 12th November 2010. End of story as SL cannot disclose any more due to risk of prejudicing further proceedings – we await what happens next or does not happen next – still no change yet again.
Page 13 – To assist Life Companies and their Policyholders, the SL approached and received approval from the IOMC to accept assignments from Life Companies on behalf of their Policyholders without the need for a costly Court Order. Hopefully this has helped lower or stopped ongoing charges taken by Life Companies from their Policyholders. Unfortunately I can say some Life Companies have not yet agreed to allow this re-assignment to take place.
Liquidation costs – Page 14 - There is a spend so far of £24.8m excluding VAT, compared to the previously estimated overall total of £24.3m. SL has reiterated that he can no longer estimate future costs for the Liquidation. Worth noting if no more cash comes in, that the cash balance we hold at present will go down as future costs are paid out. Although SL obviously still hopeful that a further £4.9m will be recovered from the loan book/WuC of Kaupthing hf.
So, very, very slowly getting there. SL has now ‘pushed’ the hoped for end date of the Liquidation out to 12 months. But as he says it is difficult to predict due to the uncertainty of recovery from balance of loans/PG claim etc.
The continuing bits are;
• 1 Loan not finalised - £4.4m (now overdue)
• Still balance of £2.5m Unresolved – to be resolved + £1.5m Unclaimed =£4.0m
• The Investigation into the circumstances leading up to the Directors decision to seek a winding up order in respect of KSFIOM – no further forward
• Still to get some Shares/Convertible Notes from Kaupthing hf WuC worth equiv of £0.5m
• Could still be 12 months until Liquidation finalised
The above are the comments I felt were worth making. I will update parts of my background data in readiness for the SL’s Quarterly Update due at end of March 2017. Based on the current cash total of £15.031m I think there is now £11.031m net available for payments (Inc the approx £3.5m for Contractual Interest). This takes no account of further costs/expenses.
The SL has to get this last loan in, get the remnant part of the PG in and sold, the ‘Unresolved/Unclaimed’ solved, any Litigation situation finalised and get clearance from the IOMC for the way forward as regards payment of interest to unsecured creditors.
So, the whole situation is ‘dragging out’ badly, with not a lot of movement over the past two years. Just got to hope for an end ASAP.
And God Bless