Some Thoughts on the SL's '6 Monthly Progress Report of 9.7.2017

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
  • Offline
Posted: Wed, 30/08/2017 - 09:55

Hi Folks,

Some thoughts on the SL’s ‘6 Monthly’ Progress Report (9.7.2017).

Having read the latest report I now detail my thoughts on it below. Not a lot of change from the January 2017 report, to my mind. Last part loan still there, balance of Shares/Convertible Notes ex Kaupthing hf still to be sold on plus Unresolved/Unclaimed and any Litigation outwith Loan Book to be finalised. But we have moved further forwards, and the end of the Liquidation still seems to be heading towards the end of 2017 according to the SL. I now post what I think are the main points in the July 2017 Progress Report and apologise if I have missed points or disregarded some points that are important to others. The last part loan of £3.7m is still overdue and the ‘Unresolved’/Unclaimed appear to have stayed the same as last time.

Page 7 (Chart) – All about interest now as we have 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 £3.7m (is in Euros) is still expected on this last loan by the SL. And perhaps more or not, is hoped for from the sale of the balance of Kaupthing hf 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, the situation has moved forward and the IOMC Deemster has given his judgment 16.6.2017, on how the remaining interest should be calculated. Appeals could be raised within 6 weeks of this judgement – no word on whether anyone has appealed. We are also informed by Anrigaut that the SL is considering the best way forward.

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, selling the balance to the Shares/Convertible Notes received from Kaupthing hf, any Litigation (but SL saying as recoveries increase, the basis for any Litigation is reduced) and resolving the Unresolved Claims. 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 paid 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 9.1.18 (Page 6), if the Liquidation has/has not been finalised by then.

Returns from KSFIOM loan book are currently 94.839% (page 7 – by deduction) – estimated returns have moved up from previous 95.709% to 95.721% (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 £3.7m due from the last loan to the £16.4m that would mean a loss of £20.1m or a 4.83% 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. SL saying that if he rejects any claim, then the claimant has a period during which they can object – sorry I do not know the length of time allowed to lodge an objection. Re ‘Unclaimed’, if creditors do not make a claim by the final ‘proving’ date (which has not yet been set) they miss out.

Page 7 & 12 – Parental Guarantee – SL has now received all cash and Shares/Convertible Notes. Some of the Notes have been redeemed by Kaupthing hf. Cash/non-cash elements of settlement totalling £432.8k redeemed so far. Leaves up to another £500k to be sold/written off by the SL (page 14).

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. SL has always said he cannot disclose any more due to risk of prejudicing further proceedings. But he has said since that as recoveries increase, the basis for any Litigation is reduced.

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 still say even at this late stage 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 £25.3m excluding VAT, compared to the previously estimated overall total of £24.3m. SL has long since 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 £3.7m will be recovered from the loan book.

So, almost there. SL has retained (using different wording – page 14) the now hoped for end date of the Liquidation by end of 2017.

The continuing bits are;

• 1 Loan not finalised - £3.7m (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 – any Litigation getting less viable now
• Still to sell/write off the balance of Shares/Convertible Notes from Kaupthing hf
• Hopefully only around 4 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 Sept 2017. Based on the current cash total of £15.9m I think there is now £11.9m net available for payments (Inc the approx £3.5m for Contractual Interest). This takes no account of further costs/expenses.

SL has to get this last loan in or foreclose on it, sell/write off the non cash balance received as part of the PG claim, finalise whether there is a valid reason to continue with Litigation out with loans situation, or not, and then push ahead to end the Liquidation by going to the IOMC to finalise the date for ‘proving’ in order to make the last dividend to unsecured creditors.

So, the Liquidation is hopefully still coming to a close, very soon now.

Take care,

And God Bless

Gordon 45

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