DAG should attempt to appoint a new liquidator

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DAG should appoint a new liquidator

Sounds good when hyped but what would it acheive, who would pay all the cost already incurred and how would we know that another liquidator would be any better.

Maybe we should try to improve the service we get. The Chartered Insitute of Accountants havve very vigorous service standards and failur to acheive these could ultimately end in PWC,s expulsion from the Insitute. All complaints regarding service are rigorously examined and can result in fines for the company and indivudual employees.

We should avail ourselves of the rules regarding our situation as client of PWC as creditors we must have rights and they should be protected under the code of conduct to ensure that under the duty of care that PWC has towards us we are being protected.

I suggest that Ewind Coe approaches the Institute on our behalf unless they are already fully aware of our rights and also we as individuals start emailing the CIA. I am sure a few thousand emails requesting information as to are rights might encourage and improved flow of information, help and guidence.

Jeff Wilkins

Posted by jeffwilkins on Tue, 09/06/2009 - 12:02
DAG should appoint a new liquidator

Sounds good when hyoed but what would it acheive, who would pay all the cost already incurred and how would we know that another liquidator would be any better.

Maybe we should try to improve the service we get. The Chartered Insitute of Accountants havve very vigorous service standards and failur to acheive these could ultimately end in PWC,s expulsion from the Insitute. All complaints regarding service are rigorously examined and can result in fines for the company and indivudual employees.

We should avail ourselves of the rules regarding our situation as client of PWC as creditors we must have rights and they should be protected under the code of conduct to ensure that under the duty of care that PWC has towards us we are being protected.

I suggest that Ewind Coe approaches the Institute on our behalf unless they are already fully aware of our rights and also we as individuals start emailing the CIA. I am sure a few thousand emails requesting information as to are rights might encourage and improved flow of information, help and guidence.

Jeff Wilkins

Posted by jeffwilkins on Tue, 09/06/2009 - 12:01
New NEW LIQUIDATOR & DCS

Understanding that many of you may be dis - satisfied with PWC I myself feel that we receive far to little information but is switching the right course.

First of all I feel that we should understand our rights as creditors. The Chartered Institue of Accountants have very strict rules regarding treatment of clients, we are all clients and with the accept of all UK professional institutions at the moment focused on "treatment of clients" to ensure that clients understand their rights and all the decisions they have to make, I wonder seriously if we are being given enough support. Sending us document without the opportunity to ask questions could be a breach. Maybe Edwin Coe should make a few calls for us to ensure are rights are protected. Also if we all email the Chartered Institue of Accountants we might encourage them to improve the servie we are receiving from PWC. Very often the devil you know is best.

Their are also implications of cost if we change at this point.

With regard to the forms we are having to sign regard the DCS we should be given clear and specific advice on this point to so far we have no direct comparisons of what happens if we sign and what if we dont.

Jeff Wilkins

Posted by jeffwilkins on Tue, 09/06/2009 - 11:50
Edwin Coe & Dag Team. Advice On Claim Form Signing Away rights

I Wonder about this signing away to DCS when Claim for £50K.
What do Edwin Coe and DAG advise.? Sign and Trust.? Or wait for Liquidation.? I presume others are wondering to know also.
Spanish.Mon.08.June 2009.@ 16-59PM

Posted by spanish on Mon, 08/06/2009 - 15:56
DCS claim form

DST are waiting for advice on this and related matters. Counsel's advice may also be needed so it will not be instantaneous.

Posted by Anonymous on Mon, 08/06/2009 - 16:09
Advice pls from DST/Edwin Coe re signing away rights

Some advice pls on this matter would be much appreciated.
My mother has received her claim form for the DCS but is in a right state over what to do (she is in the >50 group) and from what I can gather it certainly isn't obvious as to what the best course of action is.

Especially as she's leaving the country at the end of next week and won't be back until 4/7, after the 30/6 deadline, advice from the DAG Team/Edwin Coe would be great, so she can do whatever is necessary before leaving.

Thanks very much
formymum

Posted by formymum on Tue, 09/06/2009 - 12:19
formymum, re: receipt of DCS Claim form

You say your Mum has received her copy of the claim form. It was my understanding for the letter posted on the FSC website, that the letter had been sent out on June 5th but one would have to wait until the 10th when one could then request and download the claim form from the FSC website OR one could mail a written request to FSC to have their claim form sent to them by mail. How was your Mum able to get her claim form so fast. I live in Canada so don't have ready access to mailings from overseas. In fact, we have still not received our SOA voting papers which is a real lark.

Any heads up info is greatly appreciated.

Posted by Anonymous on Tue, 09/06/2009 - 17:33
@undone - Receipt of DCS Claim Form

I must apologise for the confusion - I meant she had received the letter, not the claim form.
It's information and guidance on the form we're looking for and all this business about giving up rights if you claim under the DCS. She's not sure whether to do that or wait and when a possible first payment is .......

Posted by formymum on Tue, 09/06/2009 - 18:43
WE need Legal Guidance on Claims Form Action

I am ssure that I am just one of many ,especially in the >50 K group who need some clear and specific advice as to the what action we should take with respect to signing away our rights via the DCS claims form.
Given the performance of the IOMG to date I feel very uneasy about this to say the least. Assigning say up to the limit of compensation I could understand, but ALL our rights ??
Some input from Edwin Coe and our Legal Team ,ASAP would be very much appreciated

Posted by William.B.Hill. on Tue, 09/06/2009 - 16:54
WE need Legal Guidance on Claims Form Action

I understand that it is being written literally as we speak

Posted by Anonymous on Tue, 09/06/2009 - 17:28
Advice re legal guidance on claim forms

Do you know when we might receive advice and legal guidance regarding the claim forms and signing away of rights (my mother is in the >50 range) and also what would happen under each scenario (claiming or not)

Thanks very much
formymum

Posted by formymum on Wed, 10/06/2009 - 19:37
Advice re legal guidance on claim forms

I estimate end of this week. It might require counsel's opinion and there is presently correspondence between Edwin Coe and KPMG.

Posted by Anonymous on Wed, 10/06/2009 - 20:23
hopper

agree with hopper that a new liquidator would incur extra costs and there would be a time lag before they could get to work. however. the current incumbent has shown little to suggest that he can fight on our behalf to salvage our deposits. for the past 8 months, he has consistantly fudged his way past most questions directed towward him. he has shown close to zero initiative and appears to have been "puppateered" by the IOM. i have no confidence that any of this will change now. i would like to see someone appointed who fight for all of us, ask the right questions and be open and transparaent to all depositors.

Posted by michael12 on Mon, 08/06/2009 - 11:56
Hmmm... Apart from converting

Hmmm...

Apart from converting £50M into £94M by resisting the pressure to sell the Booker shares.

Posted by frog on Tue, 09/06/2009 - 11:30
@Hmmm...

I wasn't aware that MS was under any pressure; in fact he has told us more than once that it is his job to get the best deal and that is why the bank is to be run down and not sold off in a 'fire sale'. The shares I believe, were previously valued in excess of £160M so he only 'lost' about £66M on the deal instead of £120M; bully for him, but no more credible than anyone paid for doing their job surely... We still cannot be sure that there won't counter-claims against this asset.

Posted by IceCrusher on Tue, 09/06/2009 - 12:56
I've got absolutely no idea

I've got absolutely no idea on how you get to £160M - look at the historical share price at: http://www.advfn.com/quote_Booker_LSE_BOK.html. Plus with the TOTAL repo position being £155M (which would contain these, the JJB shares and others) your points are patently wrong.

Note that the position was closed by KSFUK when they went into administration and PWC then seized the shares. At that point, the value of the shares would have been equal to the loan (which we don't know how much that was) and the share price up to the point that the shares were sold is below that what they were likely sold for (as it is a large shareholding, the price wouldn't be at the spot price, but likely a little under it). It is very likely he is looking at a good profit on this particular repo agreement.

With regard to the pressure - he mentioned on the call that there was pressure to sell these shares much earlier. The risk of counter claims on sale would have been there regardless of the price the shares were sold for anyway.

I'd be keen to understand your facts here. I think gaining an extra £50M is a good move by the LP - and unless you can substantiate your comments (where there seems to be no logic whatsoever) , I will continue to believe so.

Posted by frog on Tue, 09/06/2009 - 16:07
Liquidator, DCS

Ng,

The thread discussions on (new) liquidator as well as the DCS voting rights issues deserve a new Topic on the forum so they should be moved from this location. It is extremely misleading to keep them here. Can these be moved?

columbgc

Posted by columbgc on Mon, 08/06/2009 - 05:57
New liquidator

Agreed - I've edited the original post to suit.

Posted by ng on Mon, 08/06/2009 - 13:40
We need our own firm for liquidators

Totally agree we should get a new firm in and suggest that it is someone who is not on the Isle of Man and has no connection with it. We need a new brush that will sweep clean, and get to the bottom of things.

Would it be worth putting a poll on the DAG web site for us to vote how many would prefer a new company?

Are we going to get legal advice from E/C on claiming the £50,000.00 under the DCS?

No problem in claiming, but aprehensive about the wording" signing over all your rights to the IoM Treasury".

Posted by upthecreek on Sun, 07/06/2009 - 17:08
Same Problem Again

The signing rights probelm was there in SoA , and now the same problem has discovered against DCS , then what type of this victory was. Further there are talks to change LP, so always new problems. IT looks that thses things will keep happening and discovery will be for more and more problems. This topicks will be arounds us for many years to come, then where is the 100% money back and who will pay it ? GOD BLESS US.

Posted by steelwood on Mon, 08/06/2009 - 14:22
@steelwood

Yes, the IoMG obviously will not give up. The problem under the SoA was quite different, because it was a matter of contract and it provided for an IoMT veto and secret reporting and various other issues, whereas the DCS is embodied in statute and the manner in which it is being interpreted and implemented can be directly challenged in court. I suggest that you read regulations 9 and 16 of the DCS (find it through www.dsc.im) and you will see that it is ambiguous in these contentious areas (assignment, interest claims etc.), so unsurprsingly FSC have chosen the interpretations that favour themselves.

Posted by Anonymous on Mon, 08/06/2009 - 16:15
We need "our own" firm as Liquidator . . .

In the time that has elapsed since our money was stolen, it has become clear to me that Mr Simpson is not "our man", but a toady of the Isle of Man. We need our own "person" - a qualified firm, acting solely in our interests and on our behalf. Nine months later, I am still out of pocket more than GBP 300,000, my life / retirement savings after 40 years in the workplace, the last 10 of them in the middle-East.. Why should Messers Simpson and Aspden, in particular, enjoy a higher standard of living than we depositors, using our money? Enough. We need our own people. When my barrister son began legal study, I told him that, in addition to a superior knowledge of the law, the courts, and the "way things work", a good lawyer carries a cricket bat and possesses a set of shark's teeth and instincts We need people with these qualities working for us, rather than IOMG. It is my view that one of DAG's most critical goals as we go into liquidation (after 9 months of wasted time) is to see that a Liquidator is appointed that demonstrates the qualities mentioned above. A firm with no current business from IOMG, DSC, with no conflict of interest, at the minimum. Our Liquidator should also be committed to full and timely communication of developments and issues, as well as consultation with the Creditor's Committee at each crucial stage. Someone with fire in the belly and some guts. Given the huge quantum of fees to be charged, surely an appropriate Liquidator can be found.

What do the rest of us think?

Posted by drglowry on Sun, 07/06/2009 - 07:57
drglowry

I agree with the sentiments of your post, but as I have written on another thread, I think we should determine first if the replacement of the appointed liquidator would delay payments of the first dividends/DCS, and if so, what this delay is likely to be.

Secondly, I think we should also determine if replacing the incumbent Liquidator will prove to be more expensive than keeping with the current one. As the replacement liquidator would need to be brought "up to speed" I would have thought it likely that senior execs at the bank, who are still currently being paid handsomely, would be retained longer for this very purpose, for example. Even "our own man" may end up being "friendly" with the IOMG, and God knows how long it would take to interview and select "our own man", or who would be trusted/responsible for doing so.

I also think it would be extremely helpful if a forum member who preferably has a professional background in liquidation, could make their thoughts known on the practical pros and cons of replacing a liquidator for us laymen. I'd frankly find their thoughts most compelling in shaping my opinion, especially if they themselves have monies at stake.

Posted by chris watson on Sun, 07/06/2009 - 15:28
Running With The Fox And Hunting With The Hounds

This is what is happening. Dual Game. Our DAG should give us the best advice of Change. The old saying of never change horses in Mid Stream does not apply here, as we are out of the water now, so change is possible on dry land.

Posted by spanish on Sun, 07/06/2009 - 14:21
Bye bye Mr Simpson

Totally agree we need sombody who is not in with the IMOG and is not afraid to upset them.

Posted by banditman on Sun, 07/06/2009 - 11:21
Totally agee.Goodbye

Totally agee.Goodbye Simpson.

Posted by cottesmore on Sun, 07/06/2009 - 09:05
Absolutely, its been bad

Absolutely, its been bad enough putting up with the man for 8 months - imagine 6 years of this umming and aahhing!

Posted by IceCrusher on Sun, 07/06/2009 - 10:22
Agreed

We need someone on our side- we shouldn't have to be fighting the liguidator...

Posted by Pat on Sun, 07/06/2009 - 14:07
Do we have a choice

OK so we all agree but what is the process to expell this Lp and replace him with somebody who will work for us....I am also out of pocket almost 400K and I feel very uncompfortable with this chap....but is there a way we can do it.do we have a choice ??

Posted by chipmunk on Sun, 07/06/2009 - 15:11
Do we have a choice

Creditors do have a choice, at the first creditors' meeting in fact and from time to time if such a proposal is made, but the newly-emerged issue concerning value acquired by IOMG through the DCS might make it impossible to bring about such a change. The matter is under active consideration.

Posted by Anonymous on Sun, 07/06/2009 - 23:45
Replacing Mike Simpsom/PWC

Gavin Brake (HOPPER), holder of the HNW Proxy vote, here, with my thoughts on replacing Mike Simpsom/PWC...

To add to the debate here folks, I have a bit of expertise in liquidations and do bear in mind the following points,
1. If a UK only liquidator runs an IOM liquidation, HM Revenue & Customs in the UK will rule that the company is now a "UK company for tax purposes" since it is being run from the UK. The company will then be taxed at the UK rate of corporation tax. This would be a massive problem for KSFIOM if this were to happen. E.g. hence why PWC have had Mike Simpsom alone as Prov Liquidator, Spratt + Simpsom as joint, but NEVER Spratt alone as Prov Liquidator.
2. Changing liquidator is possible, per Elgee's comments, through a vote at the first creditor meeting. A new company will then need to get up to speed on what is happening. This will incur extra costs at that time as the new company gets up to speed. Perhaps costs will be saved with a new firm in the long run, perhaps costs will be higher. We cannot be sure either way. A counterfactual problem for the philosophers among you.
3. Do bear in mind that any extra costs incurred under 2 and tax charges/costs of tax reporting under 1 would not affect small depositors, because the £50k DCS protection is there for you. It might slow down payments a bit, but if costs go up, the only folks to suffer are the higher value depositors (like me) who will get back less pence in the pound because of higher costs. Perhaps a new firm would do a better job, get payouts quicker, offsetting this - again, no certaintly. The only certainty is that extra costs fall on the higher value depositors only.
4. As I think Chris Waston pointed out, don't throw away what we've got (PWC) until we know what we want to replace it with (which firm?). I have done a bit of investigation and I understand that the choices we have, given point 1 (running it from the IOM), are limited. KPMG is the obvious other choice, but they are "offside" for two reasons - (a) they were the auditors of KSFIOM over recent years prior to Oct 08 and (b) I understand they are administering the DCS. Please correct me if I am wrong on this point, but other than these two firms, I understand E&Y have some presence on the IOM (but are the administrators of KSF UK....need I say more) and beyond that we are into local firms

Just food for thought & adding to the debate.

Gavin

Posted by HOPPER on Mon, 08/06/2009 - 08:19
@HOPPER

Dear Gavin,

Thanks for your comments.

I'm tempted to think "better the devil you know........." may be appropriate under the present circumstances.

Kind regards,

mike

Posted by mikepapa on Mon, 08/06/2009 - 16:13
PWC and Mike simpson

Given Gavin Brake's advice I agree "better the devil you know ..." . Better to concentrate on getting an energetic and competent Creditors' Committee ( Committee of Inspection ) to keep PWC and Mike Simpson on their toes.

Posted by D RAM on Tue, 09/06/2009 - 13:04
Hopper

Thanks for the comments:

Point 1 (above and also manx-person's posts below): I guess we're now encountering one of the old SOA vs. DCS arguments in that liquidation on the IOM (without an SOA) is not necessarily straightforward as on the mainlands. The moment for that argument has obviously passed and was no doubt deeply considered by all before voting.

Point 2: Unless someone can come up with a formula, or knows one that exists, I guess there is never any way of knowing if higher costs will result in even higher returns for a situation like this. It would be very useful to hear from anyone who has experienced the pros and cons of changing liquidator.

Point 3: The fact any extra costs will fall on the HV depositors only is not lost on me but delays on DCS payments by switching liquidator is a concern. Technically I think I am in right in saying that the Interest owed to sub-50K's from October to May would be affected by increased liquidation costs, at least according to this: http://chat.ksfiomdepositors.org/forum-topic/accrued-interest-under-dcs

Point 4: If we end up with a local firm, no doubt they will automatically be seen by some creditors as being in the IOMT's "pocket" already.

Further food for thought: I read one of the "big four" are in trouble themselves; even the whole shebang. Let's hope we don't get caught up in anything envisaged in the link below.

http://www.taxresearch.org.uk/Blog/2009/05/28/the-end-of-the-big-4/comme...

Posted by chris watson on Mon, 08/06/2009 - 17:39
HOPPER adds light to the discussion

HV Members need to seriously consider whether changing the liquidator could mean being 'out of the frying pan into the fire'. Admittedly Simpson doesn't come across as the brightest spark on the IoM but either he can do the job in the interests of the depositors or he is just not up to it. If the latter then that must be an issue for his employer.
My view is that at least 2 reps of the DAG need to meet with Simpson to have a frank, 'cards on the table' chat with him, telling him politely but very clearly exactly what are the DAG's concerns, and inviting him to reply. Then if the DAG is not happy with the answers, consider the options for crossing the next bridge.

Posted by Lucky Jim on Mon, 08/06/2009 - 09:28
Replacing Mike Simpson/PWC

Locally in terms of names we have Baker Tilly, Moore Stephens, Deloitte & Touche, Ernst & Young, Grant Thornton, PKF, PWC.

I am not sure that all of these have sufficient resources (i.e. staff) to handle a liquidation but they could of course second people from their UK operation which is perhaps what PWC will be doing anyway.

I am sure that a beauty parade could be organised, but I think that generally liquidators are pretty ugly!

A man who takes 10 hours and £400/hr is cheaper than one that charges £300 and takes 15 hours, so obviously hourly rates are only one part of the equation.

In respect of the issue of central management and control, this is how I understand it, but I don't know if there would be any profit generated anyway, so there may be no tax, but clearly advice on this would be required.

Also there is issue of books and records and where they are kept, and that this insolvency is one subject to Isle of Man law.

Also - ironically - any change of liquidator would need the consent of the FSC as the liquidator, as an officeholder of a Bank in liqudiation is required to be licensed pursuant to the FSA 2008.

Posted by manx-person on Mon, 08/06/2009 - 12:08
Do we have a choice

There is also the matter of the EPS votes as well. The EPS is run by the IOMT.
The exercise of the DCS votes will i think be by the FSC as the scheme manager.
If those people claiming on the DCS also wrote to the FSC saying they wanted to vote for x as a liquidator with their DCS papers I am sure that they would have to think carefully before ignoring the request. They are of course neutral in this, albeit they will want to ensure that the discharge their fiduciary duties in managing the fund, which I suppose includes ensuring there is an appropriate liquidator.

Posted by manx-person on Mon, 08/06/2009 - 00:00
Do we have a choice

We have long been aware that IOMT has acquired voting power through the EPSs, of some £70m. We were also long aware that the FSC would acquire voting power through the DCS. However, it now appears that the latter may acquire far more value than the sum that will actually be paid under the DCS (because FSC are insisting on every depositor assigning all his rights in the liquidation, rather than his rights in respect of the maximum amount payable to that depositor under the DCS) and it also appears that such rights and hence voting power may be acquired by the FSC before any payments are actually made under the DCS.

Posted by Anonymous on Mon, 08/06/2009 - 00:25
Do we have a choice

Is the reason they wish to acquire all of the rights so that if they have refunded a DCS claim they will receive the dividends till the DCS "advance" is repaid? I think this is the reason. Is this how the DCS order is worded, or is this a creative interpretation?

Posted by manx-person on Mon, 08/06/2009 - 06:48
@manx

Of course that is the reason, but repayment to FSC in advance of the depositor can be achieved without FSC laying claim to the entire deposit. As always, the wording of the regs. Is ambiguous (to me anyway) - DST awaiting advice.

Posted by Anonymous on Mon, 08/06/2009 - 07:15
Do we have a choice

I am wondering how this could be achieved without the assignment of the whole of the creditors claim?
I am just thinking here that if there is a solution that is technically/legally workable then this could be put to the FSC as an alternative.
If I had the fiduciary responsibility (i.e. was KPMG) then I would want to be very sure that I took the full assignment and also had creditor cttee representation.
Maybe a compromise might be that the Scheme Manager will recognise and start processing DCS claims, but won't need to receive the assignment till later? In this case the assignment could be received after the first creditors meeting. I realise that this gives power to the scheme manager that DCS claimants would not wish they had, but maybe this is the answer.
Also at what stage does the assignment get cancelled - when the scheme manager has received its £50K back - or can they also wait till they get interest and charges and costs for running the scheme ? Or is the assignment ever cancelled?

Posted by manx-person on Mon, 08/06/2009 - 07:27
The IOM cheating yet again?

So if we apply for the 50,000 from the DCS we give up the voting rights to the whole of our deposit?? Here we go again with the IOM playing unfairly....
Anyone single deopistor with less than 72,000 (joint at 144,000) will want to claim and those with less than 250,000 will be tempted to claim to speed repayments.
I was looking to claim but will not give up these rights to the IOM who are again behaving badlly.
Hope we can see a recommendation from the DST soon to guide us.

Posted by Pat on Mon, 08/06/2009 - 01:16
Voting rights

Yes - this is the point I've been trying to make and am glad to hear (as I had assumed) that it is under active consideration. If it can help, I'm sure many of us would be willing to WAIT at least until after the first creditors' meeting to claim under DCS (we have up to 6 months to do so) - but WE NEED TO KNOW FAST as the IOM are moving with inhabitual (and suspicious?) speed to get claim forms out ...

Guidance please from DST!

Posted by anrigaut on Mon, 08/06/2009 - 03:37
Replacing Mike Simpson

The fact that Mike Simpson and/or PWC failed to get voting packages out to all known depositors before the May 19th 2009 deadline proves that M.S. and/or PWC do not have KSF depositors interests at heart. I believe that a replacement for Mike Simpson should be found when the creditors committee has been formed.
Like most other depositors I am also concerned about signing my rights away with the DCS.

Posted by Expat13 on Wed, 10/06/2009 - 22:37