Statutory Interest in respect of EPS and/or DCS claimants

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
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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Statutory Interest to EPS/DCS Claimants

  • D RAM
  • 13/10/08 01/08/14
  • unspecified
  • Offline
  • 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
  • a depositor
  • Offline
  • 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
  • Offline
  • 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
  • Offline
  • 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