Treasury responds to KSF IoM depositors vote

  • alec
  • 13/10/08 31/05/09
  • unspecified
  • Offline
Posted: Fri, 22/05/2009 - 20:27

TREASURY Minister Allan Bell MHK has responded to the outcome of voting by depositors with Kaupthing Singer & Friedlander IOM on the Scheme of Arrangement proposed as an alternative to liquidation of the bank.

The majority of votes overall were in support of the proposal and depositors with claims of under £50,000 were overwhelmingly in favour of it. But amongst larger depositors and unsecured creditors the Scheme of Arrangement failed to gain the required level of support for it to be approved.

Said Mr Bell:

‘The majority who clearly supported the Scheme of Arrangement, including the vast majority of small depositors, will be disappointed that it has been vetoed, in effect, by the minority of larger depositors and unsecured creditors. However, we must respect the outcome of the voting, which leaves no alternative but liquidation of the bank and activation of the Depositors Compensation Scheme. The Isle of Man Government will now work to support the liquidation and DCS process with a view to expediting the repayment of depositors. We will seek to achieve a similar outcome for creditors with claims under £50,000 as would have been achieved under the Scheme of Arrangement, to respond to the clear preference expressed by them in voting for the Scheme.’
Mr Bell went on:

‘In the particular circumstances of KSF IOM there was clearly potential for a tailored solution that would be better for depositors than conventional liquidation. Government had a duty to pursue that option and put in a huge amount of work doing so. We continue to believe that developing the Scheme of Arrangement provided the creditors with a viable alternative and was in the best interests of all of the depositors.‘

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Manx Herald article

  • Anonymous
  • Offline
  • Sat, 23/05/2009 - 09:08

see:
http://www.manxherald.com/index.php/business/528.html

The editor correctly notes that after the SoA was defeated, the IoMG has come up with alleged benefits of the scheme hitherto never mentioned. Anyone familiar with the details of the scheme will recognise that what Bell says is completely incorrect.

The arguments with IoMG will now shift into who should bear the costs wasted by the proposal of the SoA. Some, those that the Treasury has already paid to its own staff and its lawyers in IoM and London and Alix Partners, should obviously be borne by the IoMG, but there are also very large costs occasioned by the scheme that have been incurred by others and unless they too are paid by the IoMG they will ultimately have to be borne by depositors. Those are the costs incurred by PWC and the bank, which will ultimately be paid by the bank and reduce the assets available for distribution to creditors. They include PWC's staff costs, the bank's staff costs, fees charged by PWC's lawyers in IoM and London and Iceland. Further, there are the costs incurred by the depositors in paying their own lawyers to oppose the scheme and the consequent delays (especially, of course, those incurred by DAG). Those costs borne by others, and wasted as a resut of the IoMG's efforts to develop and promote the SoA, undoubtedly run into millions. Had the scheme been voted in, these costs could most likely never have been recovered. Now that the scheme has been rejected, they ought to be recovered from IoMG and you can be damn sure that IoMG will be resisting paying any of them.

Further, there are the other costs and damages occasioned by the proposal of the scheme and the consequent delay of nearly 8 months. They are the costs to depositors occasioned by their being deprived of access to their savings and interest on them for 8 months longer than was necessary, during which time they have received at most £10,000 from the EPSs (say £1,300 per month).

These will be the matters that next fall to be addressed in this saga and the Manx Herald article and in particular Bell's comments should be read in this light.


Elgee

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sun, 24/05/2009 - 14:46

"These will be the matters that next fall to be addressed in this saga".

I think some of us were hoping that the activation of the DCS and an understanding of how it will work and pay out would be first on your/the DAG list...


Context: Another Manxherald article.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Sun, 24/05/2009 - 07:45

This one isn't about Kaupthing.
It's a story about how competent the Treasury is under Bell and the way the IoMG 'caucus' appear to comport themselves. Understand you opponents!

http://www.manxherald.com/index.php/politics/529.html


Encouraging quote from Bell

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 23/05/2009 - 00:25

Seems to imply DCS will pay out in full in 12 months?

"We will seek to achieve a similar outcome for creditors with claims under £50,000 as would have been achieved under the Scheme of Arrangement".

Alec, can you please reveal source of this article?


@cw: So what the hell have you been bleating on about?

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Sun, 24/05/2009 - 07:33

You're a twisted personality. What was it you said the other day as you bounced about insensitively ignoring reasoned criticism again: "I'm fireproof." Hoo bl**dy rah.
Now you're bouncing about again with this absolutely stupid posting, which just says what I've been saying for ages, as have others, as if it's news.
Perhaps we ought to have a whipround for a brain transplant for you. Or perhaps you can afford it now your money will arrive within 12 months, you only need a little brain.
A normal human response is shame when you've been wrong. When are you going to show some. Silly me, you're fireproof, I forgot.
Love you too! Now... can you read my mind?
You might not be a troll, or receiving a kickbacks, but you were robbed, you should have petitioned Bell for your payment.


Tao, just what is your problem?

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
  • Offline
  • Sun, 24/05/2009 - 13:24

I try to look for positivity in Bell's comments following the defeat of the SOA, but instead I'm meant to feel shame for my own? I "congratulate" DAG in another post whilst underlining the fact that people should not slur me or make false allegations, and yet you claim I am ignoring reasoned criticism? I am insensitive for daring to point elsewhere that not everyone is fully protected and there is no law that states all depositors should be refunded 100%, yet you always want "truths" and "transparency"?

I feel no shame in expressing my opinions (and don't get carried away, they're not wrong) and I will not accept unfounded attacks on my character as reasoned criticism. As for insensitivity, try posting your opinions to a less sympathetic forum as this http://www.manxforums.com/forums/index.php?showtopic=32732&st=0&p=431155... and I think you'll see not only insensitivity but also raw objectivity. There's a challenge for you. I'd be curious to see the debate.

As expatfrance1 states, you really should calm down. You are acting like a berk. Since the official vote was announced I've been advocating there's no point for further division, but you choose to ignore it. You "want blood". From me? I didn't put your money in the IOM or cause your bank to fail. Why start yet another fight? I think others, not just myself, are bored with them.

As for a brain transplant for myself, according to you this would be at a cost of about 35K. How much would it cost to replace yours, I wonder? Given your opinion of yourself, I'm guessing the 500 mill frozen by HMG would only just about cover the down payment? Am I right?

PS: and it was "flameproof", not "fireproof". As in I do not get unduly upset with people "flaming" or goading me. Geddit? Now bloody lighten up and get a bit more "Tao"-like.


@follow_the_tao

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
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  • Sun, 24/05/2009 - 07:50

Why dont you just calm down!


Source of Bell's comments

  • alec
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 23/05/2009 - 11:35

It is the IOMG website - www.gov.im


No big surprise that IOMG now will support the DCS

  • klauseriksen
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 23/05/2009 - 10:39

I shouldn’t really come as such a big surprise to anyone that the IOMG now will support the DCS. The money has already been allocated and if they failed to so there would be a huge backlash from the local IOM savers and loss of confidence in their financial system.
As it looks now DAG has so far achieved to combine the better parts of two evils as we are likely to get liquidation with:
1. All legal rights intact
2. SOA like payback for small depositors through IOMG DCS support
3. Same or faster payback for large depositors as in the SOA depending on the total recovery


Klauseriksen

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 23/05/2009 - 11:34

It is no surprise to me that IOMG will now support the DCS, as I always thought they would. My question has always been, when will they pay as there is no set timeframe for them to be compelled to do so? I can see the logic as to why they should, but I'd have felt more certain had I contract with them.

Maybe there should be a FAQ section giving reasons why certain depositors such as myself supported the SOA. I never felt inclined in creating one as I have never been interested in influencing others on how to vote, but it would certainly have cut down the volume of posts I've had to make refuting allegations, misconceptions etc.

No argument with the rest of your post.


Chris Watson, I hope we can all move on now

  • klauseriksen
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 23/05/2009 - 12:02

To me at least it always seemed very likely that the IOMG could not accept a slower payback for the smaller depositors than the SOA would give and their only reason for trying to push through the SOA was in their own self interest so they could avoid the stigma of a liquidation, prevent legal action against their own and keep control of the whole process. I would be very surprised if the money they set aside for the SOA is not now going to be used to support the DCS to ensure as speedy an outcome for the small depositors as in the SOA.
As for reasons why we all voted as we did then I don’t really see why we have to justify ourselves as we all voted to the best of our knowledge and personal situation. The SOA clearly had some advantages for the small depositor but mainly had disadvantages for the larger depositor.
I have lunch once a week with an ex colleague of mine who had a smaller stake in KSFIOM and who voted for the SOA and the consensus between us last week before the result was known was that we both had voted according to what we thought was right for our situation.
There have been many bitter comments on both sides and some people who were very poorly acquainted with the facts before posting on the forum. However the main problem I have had with this whole affair is the way the IOMG has tried to manipulate the whole situation in such a cynical way (which was real cause of the split between the two groups of depositors) into something that suited the IOMG but not all depositors. Hopefully now we can move on and concentrate on what we all want i.e. get as much of our money back as possible in the shortest possible time.


klauseriksen

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 23/05/2009 - 12:09

Yes, I think we can move on. We are indeed now all "back in the same boat" and although I am pro-SOA I'm not going to argue about the fact it wasn't successful in being implemented because there is simply no point in crying about it now the voting has closed.


@klauseriksen:No big surprise

  • Anonymous
  • Offline
  • Sat, 23/05/2009 - 10:56

And preservation of the parental guarantee.
And no control by IM Treasury over the liquidation.
And probable recovery of wasted costs on SoA.
And choice as to whether to replace the liquidator.


Nothing else, elgee?

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 23/05/2009 - 11:37

Isn't there now a better chance for "us" to uncover all sorts of juicy info about the alleged corrupt IOM financial system and also open avenues to getting our Interest back? Where there is muck there's brass, surely?


Quote from Bell

  • Bill
  • 13/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 23/05/2009 - 09:15

If the IOM was prepared to commit funds to the SOA, why not do the same with the DCS. That's why all this SOA nonsense was clearly political and not at all in the interests of depositors. The attempt was to divide Class 1 and Class 2 using the large numbers of Class 1's to get the scheme approved so they would (1) get their money back and (2) keep tight control over the way the Scheme was administered and, of course (3) protect certain parties from legal action.

My guess is that you can expect a similar payout schedule but now I believe we have more leverage. I am hoping we can all see the sense of uniting our efforts now.


Quote from Bell

  • Anonymous
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  • Sat, 23/05/2009 - 09:22

Bill. More than DAG merely having "more leverage", DAG has demonstrated by the voting results that it has the capacity to drive the matter altogether and has successfully wrested control from the IoMG.


elgee right on!

  • Anonymous
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  • Sun, 24/05/2009 - 02:35

Good stuff, elgee. Arigato, for posting!
steen


Allan Bell's statement

  • Anonymous
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  • Fri, 22/05/2009 - 21:49

Ding Dong, Mr Bell, your tone is out of pitch.

How can any scheme be "in the best interests of ALL of the depositors‘" when depositors are bound to have different interests, not only because they are in different classes, but also because of their own varied personal (perhaps desperate) circumstances?


bell's Statement

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sat, 23/05/2009 - 05:33

I believe I might have got my money sooner under SOA as did the majority of <50k depositors apparently.
Bell is fudging again!

He is so transparent!

He makes no reference to the voting rules which were enumerated by their expensive QC Moss.

I understand the voting rules of 50% and 75% by value are enshrined in precedent.

This is a PR saving comment from a man who is justifying wasting a million quid of taxpayers' money as he has a habit of doing .

I am surprised that so many were duped by this self serving arrogant man.

Well, he got hoisted by his own petard--he is not half as clever as he thinks he is.

Give the job to Cannan I say.


Ye olde trust, bobwin

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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  • Sat, 23/05/2009 - 08:04

If this article above is true (there is no source to it credited), we're back to the old "how can we trust the IOMG", one of the major reasons given by some depositors for voting against an IOMT-involved SOA, yet not considered an issue with regards to the DCS.

Hopefully those depositors are right, that the DCS will have to pay out quickly and in full, particularly because a great number of fully protected depositors still awaiting return of their funds are IOM residents and the IOMG cannot continue to alienate them.

Bell's quote is a good start. It's clearly a prepared statement and indicates the DCS will function to a similar outcome to the SOA, and this should mean pay out up to 50K in 12 months. It certainly gives DST and the fully protected lobby something to pin to him.


Bell planning to discrimante or just devisive

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 23/05/2009 - 05:45

Not only precedent , but in law I believe.

He now seems to be suggesting that he will seek to have the DCS administered so that those in Class 1 will receive DCS payments quicker than those in Classes 2 or 3. How much will the resulting lawsuit cost the IOM taxpayers?


DCS payout to <50k

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sun, 24/05/2009 - 02:16

Expat, I am <50k and I voted against the SOA as a matter of principle.

The IOMG has to provide the top up payment over 75% of 20k as they decided to up the DCS level unilaterally.

I think it is fair and reasonable that I should get my limited funds back asap, particularly as I supported the class 2 depositors when I had nothing to gain apparently.

I think everyone should get their cash back up to 50k immediately.

They can do another EPS to achieve this anyway.

Obviously 50k is chicken s**t to some but a lot to us less wealthy folk.

Let us all be a little charitable now we have won the battle.

If Bell wants to do it, he can find a way I am certain--let us see him put IOMT money where his mouth is.

It would be nice to get some compensation for loss of interest/damages/cost of borrowing etc. but I believe this to be unlikely.

What do you think?


Wrong question

  • ianw
  • 14/10/08 n/a (free)
  • unspecified
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  • Sat, 23/05/2009 - 07:36

Expatvictim,

Please don't forget that an estimated £2 million of depositors funds has been sqandered on the SOA that has proven a complete waste of money and valuable time. The SOA was pomoted by IOM Govt and so IOM Govt MUST fully compensate the depositors for all the money that PWC on our behalf have wasted - including PWC's fees at £800 per hour, very expensive lawyers from Lovells etc etc. When I attended the London roadshow on 11th May, Peter Spragg admitted that PWC had been spending depositors money but he hadn't agreed that IOM would pick up the bill. This situation is totally unacceptable. If IOM won't pay our (depostors') costs, then PWC must due to their negligence.

For every one thousand pounds you had deposited, you will now receive £2 less at the end of the day due to the fact that our money has been squandered on the SOA....


@Ian W - A different question not the wrong one

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Sat, 23/05/2009 - 10:17

Ian W.

I have not forgotten what has already been done. Yours is a question that needs answered now. Mine is one for the future based on my interpretation of Mr Bell's statement.


Voting cock-up

  • Anonymous
  • Offline
  • Sat, 23/05/2009 - 08:17

I fear a lot more money and time will be wasted before this mess is sorted out (which is why 100% return has always been unrealistic).

However, even the beverage-dispensing lady (with no disrespect) at PWC, could have seen from the short list of Class 3 depositors and amounts deposited by each, that there was one disproportionately large depositor and if he / she / 'they' had chosen to vote against any proposal then the proposal was rejected (even if 99 % of depositors had voted in favour of the proposal).

The whole voting concept was ...........(choose your own expletive) and any future vote would be exactly the same.


Voting cock-up

  • Anonymous
  • Offline
  • Sat, 23/05/2009 - 10:30

boby shafted: you mentioned "beverage-dispensing lady", whereas I think you meant "beverage-dispensing person". Personally I favour "lady of the tea".


@ elgee

  • Anonymous
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  • Sun, 24/05/2009 - 07:06

Do you not think that PWC had a duty to point out, given the clear and obvious existence of one disproportionately large depositor (in any class), that the very concept of a voting system, whether or not having a precedent, requiring any 'by value' majority-element was a disaster waiting to happen ?

Surely they had a responsibility to check in advance any and all "what-ifs" and to provide a 'watertight' voting system ??

Should PWC not be dismissed for this, with the TOTAL wasted costs of the SoA and the 'Vote' being for their account alone ???


bobby shafted

  • Anonymous
  • Offline
  • Tue, 26/05/2009 - 22:04

How could PWC or anyone else know which way any voter would vote in advance?

If that "disproportionately large depositor " had voted for the soa, then the class 2 vote would still have killed it.

It's foolish to try and judge the outcome of a voting system in advance, or suggest it was a waste of time.

The vote achieved what it was intended to do. It's called democracy !