To sum up - our recovery options?

  • IdealisticRealist
  • 12/10/08 31/05/09
  • unspecified
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Posted: Wed, 05/11/2008 - 14:32

Can anyone sum up our potential repayment avenues now? They seem to be dwindling to:

  1. The liquidator paying us a percentage of what we are owed by recovering a percentage of the £516m that KSF IOM deposited in KSF UK (i.e. when the KSF UK administrator/liquidator pays out) and adding this to what he already has in the IOM (£105m?). At most, this would be 621/850ths of our money, and presumably much less if KSF UK pays out significantly less than £516m (and indeed, it may not be able to pay out anything, which would mean we get 105/850ths of our money).

  2. The DCS topping up whatever is paid out under 1 above to a total of £50,000.

  3. Kaupthing Hf paying out under the parent guarantee, as a condition of a bailout from the UK, the IMF or some other entity. Seems unlikely.

  4. The UK government taking pity on us and extending the full guarantee over Kaupthing Edge deposits to KSF IOM depositors. Based on the Gruesome Trio's performance before the TSC on Monday night, this does not seem to be an option at all.

Is this right? Are there any other options? People talk about a political solution - what do they mean?

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a politiical solution is for

  • expat
  • 10/10/08 31/05/09
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  • Wed, 05/11/2008 - 16:45

a politiical solution is for a few governments to grow up, stop sqabbling and playing bully boys and put their hands in their pockets to cover the damage they have caused, to be crude about it!


You are forgetting sale of

  • Ramsey resident
  • 22/10/08 31/05/09
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  • Wed, 05/11/2008 - 16:11

You are forgetting sale of the loan book valued at 400 million, however UK liquidation may not pay out more than 50 pence in the pound so 105 cash plus sale of loan book say 350 plus say 50% UK recovery of 275 million totals 730 million

I still think to get two thirds of the deposits back is being realistic and if you had under 50K deposited then IOM scheme will top up to total value of your investment


Ramsey

  • Ally
  • 13/10/08 31/05/09
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  • Wed, 05/11/2008 - 16:20

Ramsey Resident

Interesting numbers. Do you not think if they could get to £730 million as in your example, that the IOM government wouldn't be willing to do something, say £50 or £70 million?

I'm not saying we'll get 100% but looking at the figures if the political will is there a solution acceptabel to all might just be found


Ally

  • Ramsey resident
  • 22/10/08 31/05/09
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  • Wed, 05/11/2008 - 16:33

Yes I do think that for 50 million contribution it is a cheap solution to saving our island's economy and is quite possible

I am quite sure that the powers here are thinking outside the box and considering everything possible to retrieve this situation

The one thing that people are however forgetting is that as well as the 550 million in london, the banks assets also included 195 million cash in Iceland (See Aiden Dohertys affadavit). People think that if we get London cash back all is fixed, however the bank would still be insolvent with more liabilities than assets


Clarification

  • frog
  • 10/10/08 13/09/09
  • a depositor
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  • Wed, 05/11/2008 - 17:11

Note that the exposure to Iceland is only 10M UKP not 195M UKP


Ramsey

  • Ally
  • 13/10/08 31/05/09
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  • Wed, 05/11/2008 - 17:07

Ramsey

It’s not easy and we can play with numbers all we like but it’s up to the politicians to cut a deal.

Looking at the statement of affairs at 30 Sept you will also see that IoM had a liability to Iceland of £185 million so in fact the net position with Iceland was only £10 million.

Also and for me this is a big one, there is also a liability for sub-participation from KSF UK for £164 million. So basically KSF IoM owes KSF UK £164 million leaving the net position between them around £390 million.

Usually sub-participations are unsecured but when queried Mike Simpson said he was taking legal advise (its seems that is his only answer to every question at the moment). So nothing definite on this, but if it could be offset it makes a big difference.

If you write of the share capital and revenue reserves, on the assumption the shareholders are going to get nothing out of this, you are left with liabilities over assets of £350 million.

If you get 50% recovery from KSF UK and say IoM can put £50 - £100 million you are almost back at a point where the bank is solvent.

A lot of ifs and buts I know. But if there is political will there is always a way.


Political solution

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
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  • Wed, 05/11/2008 - 16:09

Yes there has to be a political solution because:
1. the IOM is a British Dependency;
2. if it sinks the Crown / HMG / taxpayer will have to pay a hell of a price;
3. the costly benefits of a political/financial resolution will far outweigh the costs of the IOM sinking;
4. despite Darling's 'put down' comments about the IOM, the simple fact is that it is what it is because the Crown has allowed it to be what it is!

Don't worry about the sums -- there's chaps in the Treasury who will be working on those whilst you are sleeping (check which lights are burning in Whitehall before you turn in for the night!)

See my comments on what I predict will happen: http://www.ksfiomdepositors.org/node/1250


How about a lateral look at

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Wed, 05/11/2008 - 18:13

How about a lateral look at things: if 'our' £555M is in the general pot then it works both ways, we get dibs in this larger pot too yes? And this pot could end up bigger than we imagine. PM Geir Haarde claims that HMG took £4.5B assets, and that there was more than enough money to pay savers with Heritbl/IceSave back their deposits. HMG just froze the IceSaver accounts - and it looks like they will soon regain access once the IMF $2.1B is finalised. HMG provided the loot to move the Edge retail deposits to ING, but that was a 'short term' expediency to fund the move in quick time; Ernst and Young are busy putting all that together and given the time they are taking will hopefully find much of that collateral intact.

The Kaupthing non-edge depositors are another matter, they are to be fully compensated, but if the Icelandics can be persuaded to foot the first level (~£16,000) and the FSCS completes the bill up to £50,000 then that could take care of much of it without taxpayer's help. Seems the average account with Kaupthing was ~£15,600 and its anyone's guess as to how many deposits were greater than £50,000 but if there were few, then the Treasury's exposure could be relatively low. This would result in a lower claim on the pot from the largest creditor leaving KSFIOM with more. This would face-save the Darling boy 'cos he would 'never believe it' could turn out this way - and provide a route for our 'squaring of the circle' towards an equitable solution.

Yes, I know... but at least it's optimistic and full of promise!