Sections
Outlook slightly brighter for KSF (IOM) creditors but Treasury refuses to pick up court costs
Mr Simpson says the latest recovery will help close the gap between the calculated liabilities of the company and the amount of recoverable assets; and as this gap closes the more attractive the business may become to any prospective purchaser.
Provisional liquidator for Kaupthing Singer & Friedlander (IOM) [KSF (IOM)], Mike Simpson is cautiously optimistic that the recent recovery of further assets will boost the returns to creditors of the failed bank.
The sale of a substantial holding in Booker, following a successful court case over the ‘ownership’ of the shares, has meant up to £93m will be available for distribution, in due course, to creditors (albeit this is still subject to possible counter claims by other parties who may consider they had an ‘interest’ in these shares).
Apparently the shares were ‘taken’ by the provisional liquidator when KSF (UK) was placed into administration and Ernst & Young cancelled a repo deal between the two banks.
Mr Simpson also confirmed he was unaware of any investment by KSF (IOM) in hedge funds; but that the bank did hedge some interest and currency rates.
Mr Simpson says the latest recovery will help close the gap between the calculated liabilities of the company and the amount of recoverable assets; and as this gap closes the more attractive the business may become to any prospective purchaser.
He confirmed he is still involved in discussions with interested parties who may either be interested in the loan book or the whole business. A sale of the business, which assures a 100% cover for depositors, would obviously be the best outcome for depositors; but Mr Simpson does not want them to become overly optimistic that this will occur.
In respect of other legal actions, in which the company is a party, he said a decision is expected soon in both the case involving the ‘secret’ trust fund established by the UK authorities - to receive deposits made into KSF (UK) in the final days before being put into administration – and a claim regarding a transfer/withdrawal request which was not completed before the bank went in to provisional liquidation.
It is thought the former case could have a positive or neutral effect depending on the outcome, whereas the latter case could have a negative or neutral outcome for the general body of creditors. In the latter case, if the plaintiff is successful, and it sets a precedent for further actions, the Manx Herald understands, it could result in £70m being paid to specific depositors; which, admittedly will be goods news for those individuals, but would slightly reduce the payouts to other depositors.
Meanwhile, in a separate development the skeleton arguments regarding the costs application by the Depositors Action Group (DAG) have been lodged.
The Treasury is adamant they should not have to pay either DAG’s, or the company’s costs in relation to the Scheme of Arrangement (SoA) as it was a reasonable to put an alternative to liquidation forward; and it wasn’t their fault it didn’t proceed. They also suggest such a move would be unprecedented. Treasury suggests the company should pay the costs.
In relation to the winding-up order DAG suggest Treasury, rather than the company, should pay those as well – which is contested by Treasury – and that a ‘Bathampton Order’ is made in respect of the company’s costs. Effectively the company’s legal team would not get paid until all the depositors had received all their money back.
Treasury are opposing this, as well, even though it doesn’t directly impact on them.
DAG considers the considerable sums of money spent, by the various legal teams, on the failed SoA and the costs incurred by the delay in granting a winding up order should not be borne by the depositors. Overall, whilst it may not produce a vast increase in the size of distributions to depositors, they suggest it is no less than the amount of benefit Treasury was trying to argue in respect of certain monies forgone by Treasury in the proposed SoA.
Some depositors have also been calling on the IOM Government to rethink its refusal to stand fully behind the bank and assure retail depositors 100% return of their money; as other jurisdictions have done.
In particular they point out the UK authorities stood behind Bradford and Bingley which meant no Manx depositors lost any money; so they inquire why isn’t this support being reciprocated by the Manx authorities so as to protect British depositors?
It is probably because, like other small jurisdictions, who decided they wanted to become big players in the financial world, they just do not have the depth of resources to support the disproportional size of the sector compared to the overall size of the economy.
Furthermore, the authorities are not going to go cap in hand to anyone for help in case it undermines their notional ‘independence’; and after all they think it was the fault of the people who put the money in the bank, in the first place, and they should pay for their poor judgment.
The Manx Herald will of course report on any new developments as they become known.
del.icio.us |
Digg
Email to a friend
Print version
Plain text
Now that the depositors of the bank have voted against the SoA it is only just that any costs incurred by the Bank directly related to the SoA should be borne by its sponsors and not by the innocent depositors.
Similarly, why is it that the £70M that is likely being paid out to 'inflighters' will only 'slightly' reduce payouts to other depositors?
I add 128 to 70 and get £198M down, with only £93M up (possibly) from Booker. That looks like being down by more than a one hundred million pounds (£100,000,000) than what was on the books just before the vote - how does that improve the sale of the bank or loan book? Sounds like fudging cobblers to me.
Ice
The FSC & bank Directors made a serious error of judgement which they know fully well, but the incestuous system has been busy throwing money at a scheme of obfuscation to cover up for the gross regulatory failure that took place prior to 8 October 2008.
No doubt the people of the IoM will be pleased to sacrifice any moral notion for justice to be done in favour of an unjust resolution that makes the depositors pay for yet another failure of their rotten government. The need for a clean up in politics is not confined to Westminster; it reaches into the black heart of this rotten Crown Dependency.
Jim for Justice
It is this simple.
The 'players' are not that innocent. The governement and the captive press in the IoM know, they just dissemble.
Let us look at the situation before the nemesis. Cashen and Gelling, you Manxes know who these people are, were receiving a salary for guarding over Kaupthing. I believe these people are inticately linked with the current Government. They failed spectacularly to protect, or even act with an appropriate modicum of common sense care over their charge. It seems to me the IoM Establishment has set its' mind to protect their progeny from scutiny.
Now I believe that anybody reading this is perfectly capable of inferring the reason why.
The 'cheapness' of Bell in wasting millions in simply postponing a liquidation in order to obfuscate probably the worst bank failure in Europe during this credit crisis stands out. He was simply abusing the fi¡unds of the very same depositors to confound them, the irony is surreal. Iceland is a small island, the IoM is a small island, islands are not having much luck at the moment. Sure so far the ioM has escaped, but let us be aware that what goes around around comes around, the world is going to get tired of 'low-cost' administrations who undercut the market. The time will come. Let's work to find a better solution, or else.
IOMT pay there own.
DAG are asking for their own expenses in opposing the SOA to be paid by IOMT.
DAG are also asking for IOMT to pay for PWC costs.
If the courts rule the banks assets should be used to pay for PWC costs, then DAG ask that these should not be paid out until all other creditors have been paid.
If the court rules that PWC need not wait, then they will be paid out of bank's assets.
If court rule DAG costs should not be paid by IMOT, DAG argue their costs should be paid jointly by IOMT and from bank's assets.
With regards to Winding Up Petition costs:
DAG ask for their costs to be paid by IOMT.
If the court's rule against this, DAG will take their costs from bank's assets.
Hey-ho
Post your comment