Treasury buying votes

  • Anonymous
  • unspecified
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Posted: Wed, 28/01/2009 - 10:14

The following has been speculated on in others' postings, but I feel this point may well escape the attention it deserves unless it is highlighted.

The EPS (Early Payment Scheme) in its new incarnation (up to £10,000) will presumably, like its predecessor (£1000 EPS), require the assignment by the depositor to the Treasury his/her right to the sum paid as against the bank (para. D, memorandum of assignment in £1000 EPS).

This does not just mean that individual low value creditors (those under £10,000) will be taken out of the SoA vote, which will obviously be the case. It also appears to transfer their voting rights to the Treasury. In other words, their votes will quite literally have been "bought" by the IOMG. I emphasise that there is nothing wrong in that, from a legal perspective, but I think it is something creditors ought to be made aware of.

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iom gov friend or not

  • Anonymous
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  • Thu, 29/01/2009 - 04:14

follow the tao raises a good point here
http://chat.ksfiomdepositors.org/forum-topic/questions-mike-simpson-lp-f...
I hope that IoM are not manipulating events to their own satisfaction, but this does appear to be the way they are going. Pretending to help while brushing us away. Typical politicos. I wish we were able to take a more aggressive stance against them. With members pushing for a one-third discount for the IoM gov, it is difficult, though, isn't it?


@Elgee

  • Captain Mainwaring
  • 11/10/08 31/05/09
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  • Wed, 28/01/2009 - 13:55

From inception you have had your views that whilst I half-heatedly respect, I don't necessarily agree with - are you saying that you would not accept a payment in full and final settlement just so that you could retain your "rights" as a creditor, that is, to retain the right to vote and comment?

Are we to believe that if the treasury "buys" your deposit, that it also buys your vote? Or do you know if once you stake is purchased, that your voting rights will not be transferred to the treasury? I know which one I think it is fair, but what do you think?


elgee vote

  • Anonymous
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  • Wed, 28/01/2009 - 23:54

Are you sure that accepting the eps removes voting rights? Where is the source?
Does this have any statutory basis?
Also, why will the Treasury acquire the voting right of a person who is no longer a depositor?


Voting Rights

  • tubefly
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 29/01/2009 - 02:29

I would say because when they buy the debt they buy the right to a lean against that asset which they now own - and what is worrying is that as the vote is per depositor they could buy up the majority of votes for less than the majority financial exposure!!!!! Sounds like a great deal for the IOMG.


elgee vote

  • Anonymous
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  • Thu, 29/01/2009 - 00:31

I am as sure as I could be that those depositors who are repaid their deposits in full under the new EPS (or even the present EPS) will cease to be creditors and therefore will not be entitled to vote. There is no source and no statutory basis. I think it is self-evident in much the same way as the matter in issue in the (untrue) stories that I have concatenated below, but maybe I am wrong.

As for my belief that the Treasury will acquire those votes, if you look at my earlier posting you will see that the memorandum of assignment, which must be signed by those applying for the present EPS (and presumably also for the new EPS) assigns to the Treasury the applicant's rights as against the bank. It appears to me that that means that the Treasury will acquire the applicant's voting rights in respect of the sum paid under that scheme. It further appears to me that if the applicant is fully repaid under that scheme, then all his voting rights will be assigned to the Treasury. That is my belief, but I cannot be certain and I hope that it will be confirmed or refuted by an IoM insolvency lawyer.


Untrue story concerning an American lawyer's cross examination of a pathologist witness:

L: Doctor, how many autopsies have you performed on dead people?
W: All of my autopsies have been performed on dead people.
L: Thank you, Doctor. Do you recall the time that you examined the body?
W: The autopsy started around 8:30 p.m.
L: And the patient was dead at the time?
A: No, he was sitting on the table wondering why I was doing an autopsy.
L: Most amusing! Doctor, before you signed the death certificate, did you check for a pulse?
W: No.
L: Did you check for blood pressure?
W: No.
L: Did you check for breathing?
W: No.
L: So, is it possible that the patient was alive when you signed the certificate?
W: No.
L: Really! And just how can you be so sure, Doctor?
W: Because his brain was sitting on my desk in a jar. However, it is perfectly possible that he could have been alive and practicing law somewhere.


@Elgee Now to my next

  • Captain Mainwaring
  • 11/10/08 31/05/09
  • a depositor
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  • Thu, 29/01/2009 - 03:10

@Elgee
Now to my next question then, do you think that they are devious enough to ensure that any depositor who does not avail themselves of the payments and would have been 100% compensated by the payments, will lose any further right to claim?

it's a 100% sure that the vote will assign with the deposit, and I reckon they will be fly enough to ensure that anyone who figures that they will hang around for the show, will do so while forfeiting their right to claim.


DCS vs SoA

  • chd
  • 13/10/08 30/09/09
  • a depositor
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  • Wed, 28/01/2009 - 12:46

Why is the IOM better off with a SoA? Don't they still have to put in the same amount of money as they would with a DCS?

Anyway, if it comes to light that their little SoA is just a scheme and pure trickery to get off the hook from further legal investigation intotheir illicit doings, I know that my parents would prefer to get less money back (they're not getting 100% back anyway as it is now), and see the likes of all those incapable IOM nitwits sued through their noses and put behind bars. They have ruined my parents retirement.

From what I can understand, choosing an SoA would cancel the opportunity to take further legal action, whereas the DCS would allow the liquidator to investigate past dodgy dealings. Is that correct?


vote buying - attn large depositors

  • Anonymous
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  • Wed, 28/01/2009 - 10:23

I wanted to be quite sure that this matter does not escape the attention of larger depositors, because it is something that will have a direct impact on them. It appears that the removal of, say, 45 - 50% of depositors (I am guessing) by the new increased EPS will mean that the IOMG will acquire around 50% of the votes by number (almost the required majority) in any subsequent vote on the SoA or anything else.

It is not enought on its own to secure the vote (also requires more than 3/4 by value), but it is obviously of considerable importance.


elgee, vote by number ?

  • Anonymous
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  • Wed, 28/01/2009 - 20:58

In reading the DAG affidavit, I got the impression that there is some concern as to how the vote would be counted. In paragraph 20 it states that "Depositors note that the requirement for voting for a scheme is stated to be 75% of depositors by value only."

I gather this is being challenged but is it possible the challenge may not succeed?


elgee, vote by number ?

  • Anonymous
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  • Wed, 28/01/2009 - 21:21

I posted the relevant section of IM statute a few days ago. I think it is fairly clear that it means more than 50% by number of those who vote and at least 75% by value of those who vote.

As it stands it is not unreasonable. It has merely been misunderstood or misrepresented elsewhere (not in DAG affidavit)


elgee, vote by number ?

  • Anonymous
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  • Wed, 28/01/2009 - 21:18

I posted the relevant section from IM statute a few days ago. It requires more than 50% my number of those who vote and at least 75% by value of those who vote.

There's nothing much in there to challenge, I think. It has merely been misunderstood or misrepresented elsewhere.


I expect they have changed it

  • Captain Mainwaring
  • 11/10/08 31/05/09
  • a depositor
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  • Thu, 29/01/2009 - 06:57

I expect they have changed it - they seem to have become quite adept at changing things to suit themselves.

Unfortunately they are rather too ham fisted and they get found out every time.


Wording of SoA

  • dclf1947
  • 10/10/08 31/08/09
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  • Wed, 28/01/2009 - 10:47

Elgee, I have to agree with you on this. It is my opinion the the SoA (draft) has been worded primarily to give to give protection to the FSC, Directors of KSF IOM and the IOM Treasury. The depositors come in fourth!!!
We need to be very careful of all implications. I actually like the idea of the SoA route but not with the current wording (that is for sure).


Elgee

  • SgKZ
  • 10/10/08 31/05/09
  • a depositor
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  • Wed, 28/01/2009 - 10:33

If you are right (I've no reason to doubt your understanding) then the whole process is becoming more and more cynical on the part of the IOMG.

I was thinking about their proposed timings under the outlined SOA where they discuss the IOM Treasury making up any shortfall of payments that they are unable to collect from the banks or are not able to have released from the money in hand at our old bank.

Surely by putting this method down on paper, they would have to abide by similiar timings and methodology under regular liquidation and the activation of the DCS?

With the clauses about not pursuing KSF(IOM) (read the directors) for any actions prior to the 9th Oct 2008 which has absolutely no place in a document aimed at maximising the recovery for all depositors, I just don't see how they are making the scheme more attractive for us under 50k 'ers let alone anyone else.

What are your thoughts?


SgKZ

  • Anonymous
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  • Wed, 28/01/2009 - 11:11

You asked for my thoughts.

(i) I am not sure that the compromise of rights of action against the bank includes rights of action against indivdual directors, if any causes of action exist. In fact I am fairly sure that it does not. Having not seen the words of the SoA itself (nor has anyone, except perhaps IOMG), I could not say with certainty what would be compromised.

(ii) I'm sorry, do I not think that there could be any sensible argument made in favour of your proposition that an obligation that would arise under the proposed SoA means that a similar obligation must exist under the DCS. Also, I do not think that there is a similar obligation under the DCS.


True

  • SgKZ
  • 10/10/08 31/05/09
  • a depositor
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  • Wed, 28/01/2009 - 11:32

I suppose my real point was that the SOA shows what the IOMG believe is achievable. Personally, I'm not in favour of it as the only entity to truly benefit from it would be the IOMG. I was purely musing on timings as we have never really been given any solid info about the DCS timings. I was trying to extrapolate one to the other as a purely theoretical exercise. I need to put an approximate date on the release of my funds for something incredibly important which I can't go into details on here. I'm fortunate enough not to need it for day to day living costs.

As to the first point, surely the Directors are the Bank? The two are inextricably linked. To rule out action against the Bank would in my interpretation rule out action against the Directors for any decisions or actions that they have conducted in their respective posts.

Appreciate the reply.

HIppychick. I used to do some work for firms like Slaughter and May and not one single partner earnt less than 1 Million per year. There is no 'may' about them at all, they would 'slaughter' a large amount of cash in very quick time. I think it might be to early for a 2nd opinion. the proposal so far seems to have met a resounding 'No' from the majority so far that have posted.


True

  • Anonymous
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  • Wed, 28/01/2009 - 11:51

Re Directors, it is impossible to try to interpret words that have not yet appeared in an agreement that either does not exist or no-one has seen.

I may be wrong, but it seems clear to me that directors are employees of the bank and are most definitely not the bank itself. The bank, a limited company, is a juristic person in its own right. However, even if I am right, I am not persuaded that there needs to be a compromise in respect of future actions against the bank itself.

I really do not think there is a problem with the lawyers instructed by the team. I do not just say that because it was me who found them. Their London lawyers are very widely known and, as far as I know, are acting for the depositors of other banks in similar situations to us.


soa is not 100%

  • Anonymous
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  • Wed, 28/01/2009 - 10:46

SgKZ, the SoA has nothing for sub-50k-ers. Nothing. It also has nothing for the over 50k-ers, because it does not guarantee 100%. Simple. I was hoping that we would be working for 100%. Even as a sub-50k-er, I support this issue, strongly. The whole SoA needs kicking over.

The IoM should give us our money back, 100% within thirty days! We've been waiting long enough, studying their shilly dallying. We've had calls from our leaders on this site asking us to lay off the IoM folks "while discussions are progressing". Wheee!


What is the IOM govt really doing?

  • Lostinspace
  • 13/10/08 31/05/09
  • a depositor
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  • Wed, 28/01/2009 - 13:03

Further to Steepjp's comment, I wonder if we are really now starting to see the IOM's true colours?

All the way along, there's been two ways of looking at their actions:

  1. They are genuinely working hard to overcome a very difficult problem, (partly of their own making) having been screwed over royally by both HMG and Iceland. Behind the scenes, Mike Simpson and crew are working to get the "best possible" result for us. Some kind of deal will be done and we will or should eventually get our money back. The IOM financial sector survives.

  2. Alternatively, they really are the Isle of Muppets on this, out of their depth and with no real plan of action, like rabbits caught in the headlights, working every angle to protect their own interests and those of the (carefully shielded) bank directors and FSC. They will prevaricate and delay and cynically hope to split the DAG with increased EPS deals etc and bet that eventually all the fuss will go away...(They're reluctant to take out a loan to cover money frozen in London, as some have suggested, because what happens if/when the next IOM bank goes under, what happens then? )

With the next court date tomorrow, it's crunch time again. Call me an optimist, but I really hope we are looking at option 1.


I'm afraid it 's option 2.

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Wed, 28/01/2009 - 22:11

The informed IoM comment has, as far as I can see, been making this call more and more frantically.

Look at the actions and results. Look at the discussion here. It is clearly possible to place all the treasuries actions on SoA as a political cover for doing absolutely nothing substantial for us and simply to avoid a trigger of the DCS.

It isn't the Isle of Muppets, it's the island of poison dwarves.

The voting aren't the important thing here, the point seems more and more to see the SoA for what the IoMG are making it and make sure it never gets off the ground. A secondary point is to make sure it crystal clear tpo everyone that it was the IoMG cynical manipulation of this possibility that caused it's necessary demise.

They are no doubt going to say "We tried". They have to lose that PR play.


I'm afraid it 's option 2.

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Wed, 28/01/2009 - 22:08

The informed IoM comment has, as far as I can see, been making this call more and more frantically.

Look at the actions and results. Look at the discussion here. It is clearly possible to place all the treasuries actions on SoA as a political cover for doing absolutely nothing substantial for us and simply to avoid a trigger of the DCS.

It isn't the Isle of Muppets, it's the island of poison dwarves.

The voting aren't the important thing here, the point seems more and more to see the SoA for what the IoMG are making it and make sure it never gets off the ground. A secondary point is to make sure it crystal clear tpo everyone that it was the IoMG cynical manipulation of this possibility that caused it's necessary demise.

They are no doubt going to say "We tried". They have to lose that PR play.


SoA not 100%

  • richiyeh
  • 10/10/08 n/a (free)
  • a depositor
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  • Wed, 28/01/2009 - 13:02

Can not agree with your logic. At this moment 100% return is not on the table so the choice (and I'm not even sure that falls to us) is SoA versus DCS. If the SoA is better than DCS for >50k then it would be foolish to eliminate it on the grounds that it doesn't return 100%.
The real problem is that what we want is not on the table.


DAG 100%

  • Anonymous
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  • Wed, 28/01/2009 - 13:47

richiyeh, we are the Depositors Action Group. Our goal is 100%. We are campaigning (supposed to be campaigning) for 100%. Fight for what is ours! Why should we accept the dirt the IOM lays on its table? Don't give up!

The IoM gov should already have compensated us 100%. All the folks over the water got 100% from Kaupthing Edge deposits. Why should the IoM act with any less morality?

IoM. Pay up! Sort out how to get the money back in your own time, any scheme you like.


We Agree with SteenJP

  • merlina
  • 26/01/09 01/06/09
  • a depositor
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  • Wed, 28/01/2009 - 11:02

We totally agree with you - my sister is well below 50k and I am well above 50k, but we are together. We want 100% back.


This Is all unheard of

  • hippychickrobbed
  • 03/11/08 31/05/09
  • a depositor
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  • Wed, 28/01/2009 - 10:55

THIS IS ALL UNHEARD OF FROM 50p to 50 million whatever someone has we want everything returned in our accounts,, the people accountable for this mess have to be brought forward, they have ruined lives, no more of this, enough is enough. i would like to see how any of themwould feel if they had funds in this bank know if they would have accepted any othis rubbish that we have been going through. Action next? A good london lawyer perhaps.. where do we go from here?


IOMG Buying out Votes

  • timeout
  • 22/10/08 22/06/09
  • a depositor
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  • Wed, 28/01/2009 - 12:11

Elgee, thank you for highlighting this recent ploy by IOMG. Thank you also for thinking about >£50k depositors though you are a <£50k depositor.

Can you please opine as to whether a creditor who has been paid in full (creditors < £10,000 under this scheme) would still have any rights to vote on an SOA?

Or do you think the IOMG is playing this in such a way that they will want to vote on an SOA before paying back these creditors?


IOMG Buying out Votes

  • Anonymous
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  • Wed, 28/01/2009 - 12:31

Timeout: Yes, it appears, at least to me, that such creditors (<£10,000) would have absolutely no voting rights once they have been paid out in full under the new EPS. I think that much is not really in doubt, although the court could order otherwise (I cannot see why it would).

In fact, it appears that those voting rights will be lost once a depositor has entered into a memorandum of assignment under the EPS, which means once they apply under the EPS (also true of the existing EPS, although only those depositors <£1000). Further, it appears that all depositors who claim under the new EPS, including those with more than £10,000 on deposit, will lose £10,000 of the value of their vote (those having less than £10,000 will lose all their vote).

I think it is fairly obvious that those voting rights will be lost before the vote on the SoA takes place and that, if I am correct, the Treasury will by then have inherited from each depositor who has claimed under the EPS their right to vote at least in respect of the sum payable or paid under the new EPS.