Statutory Interest in respect of EPS and/or DCS claimants

  • anrigaut
  • 19/10/08 30/10/09
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Posted: Wed, 15/08/2018 - 19:34

On 3 July 2018, an Application was made by the Liquidator to the IOM Court concerning the payment of interest in respect of depositors who claimed early payments under the EPS schemes and/or compensation under the DCS and who – in order to receive such payments - had to assign their rights in the liquidation to the DCS (or in the case of EPS to the Treasury – subsequently taken over by the DCS). The Liquidator is seeking directions from the Court to the effect that he should pay the statutory interest to which each such depositor is entitled to the DCS (who will then account for it to the depositor, as has been the case to date for ‘excess’ dividends).

On 1 August 2018, the Deemster ordered that notice of this Application should be placed on the KSFIOM website, together with Mike Simpson’s Witness Statement and the Skeleton Argument. These, together with the Court Order, are now available here: http://www.kaupthingsingers.co.im/2018/august/15august2018/

The Court Order sets out the timetable for the defendants (Treasury, DCS & any unsecured creditors who apply to the Court by 24 September) to file submissions and for the Liquidator to respond, and sets the date of the hearing for 30 October.

The Skeleton Argument sets out the relevant facts & arguments, particularly complex with respect to the status of those who claimed in EPS but not in DCS (presumably having been fully paid out by the former?).

In point 13 of the Witness Statement the Liquidator notes that should he be required to pay out directly to depositors who claimed in EPS but not in DCS ‘contrary to the procedure that I have adopted since 2009’, he would need to re-establish contact with 1681 such depositors by liaising with the DCS, ‘which would add considerably to the liquidation costs’. It seems to me that the same would apply to those depositors (over 6000 if I remember well) who did claim in the DCS (whether or not they had previously claimed EPS), from which I can only assume that he feels there is little doubt that these payments will in any case go to the DCS (though DCS claimants are included in the Application - see points 9-10 of the Statement).

Clearly, the other potential issue concerns how the DCS will deal with whatever payments they receive. While this is not the object of the current Application, points 16 & 17 of the Skeleton Argument draw attention to the DCS Regulations, which state that any amount received by the DCS ‘in excess of any amount equal to the Retained Sum shall be paid to the depositor’, where the ‘Retailed Sum’ is defined as the sum of the amount of compensation paid and ‘the cost of recovery’. To date, no recovery costs have been retained, with all amounts in excess of the compensation paid transferred in full to the depositor. But I suspect that the DCS (who will also be obliged to re-establish contact with over all those (<£50k) DCS claimants who were fully compensated back in 2009 – almost 5000 I believe) may now wish to change this policy and retain a part of the interest they receive. Whether the costs they will incur in distributing the interest to its claimants would count as costs of ‘recovery’ seems to me to be a moot point and may also require a ruling by the Court once the present issue is settled. Anyway, as I see it, we can only wait & see.

I have tried to summarise the main points that struck me on a first read-through of the documents. But I’m no legal expert and may have misunderstood. Some of you may have other thoughts. For what they may be worth, these are just mine.

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Guidance needed

  • sunny1
  • 16/10/08 30/05/14
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  • Fri, 14/12/2018 - 09:18

Thank you Anrigaut for your reply.

Deferred interest: your explanation accounts for the discrepancy I had found.

Statutory interest:
The Help Sheet states: ‘Statutory Interest will be calculated (at 4%) for the whole period from 9 October 2008 until the date of the final distribution … It is reasonable to estimate that Statutory Interest might be somewhere in the region of 1.5 p in the £.’

I therefore calculated 4% interest, on decreasing amounts of the sum in my account, between October 9 2008 and the final payment in December 2014.
Suppose this calculation gave a total of £27,000 interest over the years. 1.5 pence in the pound on twenty-seven thousand pounds gives a payout of £405.

Your version is much more welcome: 1.5% of the ‘agreed claim’, which I think is the original amount in the account on October 9 2008, would be something like £4,260.

Where have I gone wrong?

                    Gordon hasn’t posted recently.  Is he OK?

@sunny1

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 14/12/2018 - 18:15

I have no doubt my version is the correct one.

As noted in the Help Sheet, there will be between £15m & £20m available 'to share between a claim base of over £900m'. Of this, we know that the deferred interest amounts to about £3.6m, which will leave roughly £11m - £16m for statutory interest to be distributed pro rata, representing around 1.2-1.8% of total claims of £900m. Thus 'somewhere in the region of 1.5 p in the £' relates to our agreed claims.

This fits with the worked example provided in the Help Sheet for someone with an agreed claim of £1050 (amount already received) and deferred interest of £10. The DCS appear to understand or assume that the deferred interest will be added to the agreed claim before application of the p/£, but this remains to be confirmed (or not) by the Liquidator. It will not of course make a big difference one way or the other.

Hope that reassures you!

PS Heard from Gordon today - he is fine.


Interest payment

  • Esteban
  • 13/06/09 31/05/09
  • a depositor
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  • Sat, 15/12/2018 - 20:18

I would be grateful for some assistance.

I have read this thread and clicked on the link to DCS to try to get more information. All I get is
Access Denied
You are not authorized to access this page.

I have no idea why this is.

Reading the thread, it would seem someone called "downbutnotout" has posted something about a form which has to be downloaded, completed and passed to the liquidator to confirm current details. Again, I can't get access to this post as it's denied and I can find nothing relevant on the DCS website which only show the last update dated Oct.2014! and a note above saying access to the DCS database is now closed. Nothing about a form! But I see others have found and completed the form.

Obviously I want to complete this form if it's necessary but can't see how to do so, possibly because i can't access the relevant pages. Hence the request for assistance.

Regards


DCCS website link

  • anrigaut
  • 19/10/08 30/10/09
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  • Sun, 16/12/2018 - 14:47

Esteban,

The link to the form (as provided by Afam) is given on the main updated DCS page which provides helpful explanations (not accessible via the direct link to the form) which you should read before completing the form.

The address of the main DCS site changed a while back and (as included in my earlier post below) is now https://www.dcs.im/ (the old site you refer to is also there under 'Archive' in the top menu). I have now given the new link in the shout box.

If the updated link still takes you to the old site, try clearing your cache.

The glossary term 'DCS' does not include a link to the website and is simply an explanation of the term seen by floating the mouse over it.

Hope that helps,
anrigaut

PS This form is for the DCS, not the Liquidator, and concerns only depositors who claimed through the DCS and/or claimed EPS.


Form

  • Afam
  • 02/02/09 28/05/13
  • a depositor
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Interest

  • sunny1
  • 16/10/08 30/05/14
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  • Thu, 13/12/2018 - 09:03

I’m trying to use the notes on deferred and statutory interest to get a rough idea of interest payment. My calculations so far indicate, for the deferred interest, that the full interest amount, and not the capped 5%, was given to my account on Oct 9 2008. Which leaves only the statutory interest of 1.5 pence per interest-pound, a relatively (very) small amount.

I would welcome further explanations, from others on this site, to amplify the help-sheet.

For a new address, to which cheques will be sent, ‘an original proof of address will likely be accepted’. Such as a utility bill or bank statement. If not original, the new address has to be certified.

As yet we have no date: 'dependent on the date of the KSF final dividend'.


@sunny1

  • anrigaut
  • 19/10/08 30/10/09
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  • Thu, 13/12/2018 - 10:20

Hi sunny1,

The ('uncapitalised') interest that was added to our final bank statements on 9 Dec 2008 was indeed the full amount and was not capped at that stage. The 5% cap came into play when the Liquidator assessed our claims. As a result, if your account was paying more than 5% interest, your agreed claim will have been for less than the amount on your bank statement. Unless there was some other reasons for part of a claim being rejected, the difference between the submitted & agreed claim corresponds to the deferred interest which is now payable in full.

Not sure what you mean by 'per interest-pound'. The DCS estimate the statutory interest will be between 1.5 & 2 p/£ - ie 1.5-2% of your agreed claim (augmented by the deferred interest where applicable). This agrees with my own estimate based on available funds.

Hope that helps.


Important update from DCS

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 12/12/2018 - 13:54

Well, well! It seems my worst fears re the DCS have NOT come to pass (or am I missing something?).

As announced on the dcs site today:
“The Scheme Manager of the DCS will distribute all Surplus Interest it receives from KSF (being the final dividend from KSF) to the relevant DCS & EPS claimants, without retaining any amounts that may have been due to it, and without charging any administration fee against claimants.”

Full details & useful explanations here: https://www.dcs.im/

Note that in order to receive payment those concerned need to complete & return a form confirming or updating your address.

Thanks to downbutnotout for the heads up!


Update 're dps

  • Yoda
  • 21/10/08 31/05/09
  • unspecified
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  • Thu, 13/12/2018 - 07:17

Well, that sounds good news! Maybe we really are close to the end. But does it really mean that we all have to apply and update our details? That seems a little crazy

Thanks as always to everyone's invaluable help and updates. Happy Christmas one and all x


applications to DCS

  • anrigaut
  • 19/10/08 30/10/09
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  • Thu, 13/12/2018 - 11:57

Hi Yoda,

Yes, that is clearly what it says. I agree it seems 'a little crazy', but maybe it makes sense for the (majority) of DCS claimants (those with under £50k) who were fully compensated over 9 years ago and for whom maybe the DCS did not retain details. I don't know.

The form we have to complete is not 100% clear at first sight. But on closer inspection it becomes clear (to me at least!) that while all EPS/DCS claimants have to send in this form, a certified proof of address is required ONLY if your current address is different from that currently registered with the DCS/EPS and entered by you in the first part of the form. Otherwise, you just need to tick the relevant box in part (2) and sign & date the form.

As long as I get my interest in full I'm prepared to put up with this minor inconvenience (including getting a cheque I will then have to post back to my current IOM bank!). However, I can forsee potential difficulties ahead for anyone with no UK bank account. Rules no doubt differ between countries, but it appears (from a quick google) that depositing a sterling cheque in a French bank would be charged at between 0.1% & 1% with a minimum charge of at least 14 euros and possibly quite long delay. I have just written to the DCS on this point.


Completed and returned my

  • Yoda
  • 21/10/08 31/05/09
  • unspecified
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  • Thu, 13/12/2018 - 22:36

Completed and returned my form! It feels fairly constructive to do something positive! So many years of inactivity, just looking forward to the end of this horribly messy saga.


Typical!

  • dans le merde
  • 14/10/08 31/05/09
  • a depositor
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  • Thu, 13/12/2018 - 13:44

We have just sold up in France and moving back to the uk,and we are going to have a period of time when we will have no official address.....have emailed them but no response as yet.
Does anyone have a clue on the timing??


Claim Form

  • Afam
  • 02/02/09 28/05/13
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  • Thu, 13/12/2018 - 12:10

I would agree that the form is far from clear but I have interpreted the requirements the same as yourself i.e. certification is only required 'if' there is a change of address. I hope this was the intent!

Many thanks for you years of 'interpreting' the masses of information.


Thank you

  • sunny1
  • 16/10/08 30/05/14
  • a depositor
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  • Mon, 19/11/2018 - 19:06

Good news. Many thanks Anrigaut, as always.


Court ruling

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Sat, 17/11/2018 - 15:49

Just to confirm that the Court essentially ruled in favour of the Liquidator's request. The Court Order is posted on the bank website http://www.kaupthingsingers.co.im/2018/november/13november2018/

Remains to be seen what the DCS will do with the interest they receive. I'll be keeping a watchful eye!


Thanks Anrigaut. Seemingly

  • sambururob
  • 10/10/08 n/a (free)
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  • Wed, 21/11/2018 - 15:58

Thanks Anrigaut. Seemingly good news.
Rob and Wendy


Court Ruling

  • Blades
  • 19/10/08 n/a (free)
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  • Mon, 19/11/2018 - 15:58

Thanks as always Anrigaut for keeping a watchful eye on things.


Timeline for Payment of Deferred and Statutory Interest

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
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  • Mon, 19/11/2018 - 14:56

Great news we've finally got the court ruling but it would also be helpful if the SL could give a bit closer estimate for payment than ".... as soon as possible..." Does he estimate weeks, months, this year or ?


@D RAM

  • anrigaut
  • 19/10/08 30/10/09
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  • Mon, 19/11/2018 - 15:28

My understanding (such as it is) is that he really does mean soon - ie this year. But we can only wait & see, hoping for something before Christmas.


@Anrigaut

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
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  • Tue, 20/11/2018 - 13:29

Thanks for your hopeful advice.


@Anrigaut

  • mikepapa
  • 10/10/08 n/a (free)
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  • Mon, 03/12/2018 - 14:06

Thanks for the update and your advice.
Wish you a happy Christmas and New year!


Statutory Interest to EPS/DCS Claimants

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
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  • Sat, 18/08/2018 - 01:42

I'm mesmerised by all of these legal proceedings which appear to drag on interminably (as one finishes yet another pops up) and, of course, all at our expense and delaying final payment(s) to us. I just wonder if many of these issues couldn't have been foreseen and consolidated into a single court action? Is the SL using us to learn on the job? What has the Creditors Committee got to say ?


@D RAM

  • anrigaut
  • 19/10/08 30/10/09
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  • Sat, 18/08/2018 - 07:50

I understand - and share - your frustration.

That said, I don't think these latest proceedings (with a hearing fixed for 30 Oct) - or indeed the earlier proceedings to determine how the interest should be calculated - will delay the final payments any more than they already are (& were) delayed as the amount available for distribution cannot be known before the last date for proving - now set at 16 Nov - is passed.

Nevertheless, while I can't speak for the CoI, I personally fail to see why it took so long after the final loan was repaid at the end of 2017 for the SL to submit - in June 2018 - his application to fix the final date of proving. Nor do I see why this could not have been done even before the final loan was repaid, but there may be some legal reason for this.

As to the expense, I suspect rolling the cases up would have made little difference as the total amount of work required to prepare the various documents, arguments etc would surely have been much the same?


To Anrigaut

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
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  • Sat, 18/08/2018 - 09:01

As ever you're the voice of calmness and sanity.

Thank you (and Gordon) so much for all your efforts, they're greatly appreciated.


Anrigaut - Re Statutary Interest

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
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  • Fri, 17/08/2018 - 21:53

Anrigaut,

Just want to say thank you very much for the update. A lot of reading required and once more you have succinctly picked out the important parts for all of us.

Gordon 45


Thanks

  • Pat
  • 10/10/08 30/11/12
  • unspecified
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  • Sat, 24/11/2018 - 18:22

Thanks to both Gordon and Anrigaut for the good news and all the efforts you have made in keeping track of this. Can't believe it is 10 years ago!

Pat.