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KSF (IoM) winding up is delayed for 60 days

A PETITION to wind up Kaupthing bank was adjourned for 60 days at the High Court today - to allow time to put together a possible salvage plan.

There was standing room only in court 1 as proposals were unveiled for Tynwald to approve an emergency fund to help Kaupthing depositors facing hardship with the loss of their life savings.

Attorney General John Corlett insisted this could not be called a hardship fund as it would apply to all the Kaupthing creditors.

He said it could be funded either from assets already recovered by the provisional liquidator or from the 150 million of taxpayers' cash already approved by Tynwald for the depositors' compensation scheme - or possibly new money in addition to that 150 million.

The court heard that the Manx government had appointed global business advisory firm Alix Partners to look at alternatives to a traditional winding up of Kaupthing Singer and Friedlander (IoM).

Theses included the rescue or sale of the bank and/or a salvage by way of restructuring or recapitalisation that would be led by Treasury and guarantee a minimum return for depositors 'much in excess' of what they would get back via the compensation scheme.

A third option would be a restructuring plan combining bank recoveries with third party funding.

In an affidavit read out in court, Alix Partner's David Lovett said: 'If a restructuring plan can be put in place then I am confident that depositors will be better off than if the court simply makes a traditional winding up order.'

He said Treasury was prepared to recommend to Tynwald that a scheme be set up to enable a payment on account to be made to depositors as soon as possible.

And he argued that while there were many uncertainties and promises were 'just not possible', if the winding up order was granted then 'we may never know if a more satisfactory solution could, with patience, have been achieved.'

Deputy Deemster Andrew Corlett granted the adjournment until January 29, saying he was taking into account the wishes of the vast majority of creditors.

WHAT DO YOU THINK?

Send your comments to newsviews@newsiom.co.im

YOUR COMMENTS

The only thing that politians care about is public opinion. Many KSF IOM depositors are in appalling situations as a direct result of Alastair Darling triggering the collapse of KSF UK. There is also a minor campaign by UK governnment apologists in sections of the media to class IOM depositors as tax avoiders who got what they deserved. And Alastair has promised a 'long hard look' at the IOM status. Whilst he is at it perhaps he can also have a 'long hard look' at the annual reports of every major UK plc and what exactly those sudsidiaries in the Cayman Islands, Bermuda and the Dutch Antilles do, but I doubt he will. I believe a mass hunger strike by KSF IOM depositors outside the locked gates of Downing Street would soon focus the mind of Alastair Darling and Gordon Brown.

GH

To wait another 60 days and pay the over inflated bills of PWC and now probably Alix Partners - This is not the view of the vast majority of depositors. They should kick PWC out and return to the court every 14 days. Regards

AL

2 months delay. That is ridiculous. Then what another 2 months? I had some savings in KSF, and need some money now before I lose my house.

I hope that if a solution is found sooner, it will be acted upon rather than waiting. I have no faith in a government run by a man with such a ridiculous moustache!

JQ

Excellent news for all depositors, but what can be done with PWC and their lack of performance & information with respect to those depositors, although they appear to have informed the court to the contrary, application for joint liquidators??? depositors informed via website -- try asking any DAG site member if they were informed.

LS

Being a depositor with the possibility of losing my life savings I am heartened by the news that the court have granted a further 60 days in the hope to sort out the problems of KSFIOM. I do have one major concern and that over the role of the provisional liquidator Mr. Mike Simpson. He needs to be questioned over why the KSFIOM depositors are not being informed of the KSFIOM status and why he proposes to employ another PW employee to be paid for out of KSFIOM funds.

DEREK WILLIAMS

The 60-day ajournment is good news for those with substantial savings, but leaves small savers twisting in the wind. A good idea might be to use available funds to pay out up to 20,000 per depositor now allowing those without other sources of cash to keep afloat and taking heat off the FSC from the very small savers.

MACB

Without even the outline of a rescue plan this further delay only serves to frustrate depositors, undermine the reputation of the IoM, and line the pockets of the consultants. No more delays – we need action.

RB

WHAT DO YOU THINK!!!!! WHEN YOUR BANK A/C HAS BEEN UNACCESSABLE FOR 2 MONTHS, AND YOUR NOW INFORMED OF A 60 DAY ADJOURNMENT. YOU HAVEN'T HAD ACCESS TO YOUR LAST 2 PAYCHECKS. AND YOUR CREDIT CARD YOU'VE HAD FOR 20 YEARS GIVES YOU THIS REPLY.....

'Thank you for your email.Unfortunately on this occasion I am unable to increase your credit limit. In the current climate of increased personal debt, it is important that we do what we can to make sure that customers do not borrow more than they can afford. As well as assessing your account history, we also consider how you manage any other credit accounts you have outside the Barclays group. If you would like to review your account again in the future, please contact us again in six months.'

WHAT DO YOU THINK, I THINK OF BANKING IN IOM ?????

DS

Despite being so far into this debacle, I still feel incredulous that whatever the UK Government's intentions were around the freezing of Icelandic assets, the plain fact is that ALL of the depositor's money is available in the electronic vaults of KSF UK. The UK Treasury has only to return what is, after all money belonging to KSF IOM depositors and this whole sorry mess goes away. Ask yourself, would the UK Government be so unhelpful and so bullish if it were the USA's money or perhaps China's? No, they'd be utterly terrified of someone bigger and stronger. This is the schooyard bully played out at the macro level.

KM

That is good news insofar that it should see more funds retrieved. But the hardship people need to have access to cash now. PWC have done an appalling job so far – 60 days of no information – the only posts have said 'we are working on it' and nothing else

MARTIN WILLINGALE

I am totally disgusted at having to wait another 60 days. I am also hurt that I am being tarnished a tax dodger. I live in Spain so I am unable to open savings accounts. I also cannot hold a lot of savings in Spain due to harsh tax laws e.g. no tax exemption for spouse on death. So, consequently I have no choice but to look at the likes of the IOM. I declare all income and pay all tax. So thank you Mr Darling for robbing me. No wonder the UK is in such a state. All you have to do is look at the TV performance of this guy, he is a total idiot. What a state, work and save hard all my life, to get stuffed by the UK Govt. GB, Spain

The 60 days postponement is good news, although I sympathise with the depositors with investments below the 50,000 IoM compensation offer. It begs for a two tear system to be set up to pay out to the depositors up to that level. For thedepositor above50,000 like myself,it allows time for further negotiations by the IoM and UK Governments, with Kaupthing hf and theIcelandic Government which are the responsible for the 100% guarantee. In a letter from the IoM Treasury,I have been informed that the IoM had this assurance from the UK Government.I am also quite aghast at Alistair Darling's view that depositors in Kaupthing are paying lower taxes. In my case, any likely losses are the proceeds from selling my company on retirement, my life's workand on which I have paid full tax to the UKTreasury this year. It is therefore quite galling thatthe Chancellor has no sympathy for IoM investors and I have written to him in that respect. Ultimately the UK Government has caused this fiasco and ultimately they have responsibility to get us out of it.

TOTALLY DEVASTATED

Having waited all this time we seem to be no further on, particularly with regard to people in desperate need. There seems to be no sense of urgency. They say the best form of defence is attack and that is why Mr Darling continues to insult us with comments like tax dodgers. For those in great need I would suggest the only people who have any security these days are those on benefits. We hard working, tax paying, savers don't know all the wrinkles but it seems you can have all the things you have worked hard for all your life, provided by the State. I believe you can lie on the beach and have your benefits sent to you. Perhaps we should find out what we are entitled to rather than make ourselves ill.

ER. conned

To delay the liquidation is definitely a good idea, but for so long without a publicly open managed resolution program to ensure we have a solution by the time of the next review is not good enough. But what really makes me angry is that the real perpetrators of this mess - The Miracle Men, Darling & Brown - are getting off Scott Free and they will not come clean on the affair. It is plainly obvious to all those concerned that the UK Government's actions in the UK directly led to the failure and subsequent administration of Kaupthing Singer & Friedlander UK (KSF UK) which up to then had been a solvent and liquid entity and thereby prevented KSF IoM from accessing funds that were rightfully its own - it does not take a genius to see that the UK government are morally obliged to reinstate or repatriate those KSF IoM funds. Then we can rest happy and vote Labour next time (maybe).

RW

My! What a revelation the statement from the courts regarding the KSF (IoM) collapse. As I quoted this morning, this is governmental bull excrement!! At this rate all depositors will be dead before anything is resolved. That would please all parties except the deceased! Perfect example of why a democracy will never win a war. What will happen on 29.1.2009, (erroneously referred to as 29 Jan 2008 in the statement on the KSF web site-(can't they get anything right?))....... let's defer the judgement until 29 Jan 2014? As I stated earlier.....it's your banking industry that's going to suffer. I would think the IoM should make a stand before all your bamks disappear. Regards,

JOHN YATES

The IoM is doing its best under trying circumstances. Meanwhile the UK government has shown a cynical disregard for the mental health and welfare of its citizens. There are aid workers stranded overseas penniless, pensioners devastated, and families crippled by mortgage obligations they cannot meet. But these sad 8,000 depositors, of which I am one, do not have a large enough voice to create a political threat, and since there is no political gain in helping us we are discarded. As for this postponement it sounds hopeful, but if it doesn't come off I will just have to earn my savings of the last decade again. I won't be defeated by a daft simpleton like Darling. Regards,

NEWMANXFAN

COMMENTS CONTINUE ON PAGE TWOYOUR COMMENTS (CONTINUED)

My life savings are invested in Kaupthing(IoM) - I'm completely devastated by what's happened and appauled at the way the UK Government & Treasury have behaved and their indifference after the mayhem they have caused - we must not let the UK Government get away with this - we must keep fighting until they are held to account. The UK Government should be sued for the financial damage they have caused and for the untold distress and anxiety they have caused to thousands of people in the industry, and those who have deposited in Kaupthing(IoM) and fear the loss of their life savings like I do. There really won't be much point in living if I lose all that I have ever worked for. Depositors are completely innocent in all this - we are careful savers who have been helping to shore up the banking system in the face of gross irresponsibility by others. Why should we suffer because of other people's boundless greed and desire to gamble on the never never? Why should we suffer for dirty UK Government tactics and their misuse of anti-terrorism laws to suit their own twisted ideas of what's fair and reasonable. I consider the adjournment a good thing (but only if it delivers a better solution). I want 100% of my deposit returned to me - I think that the only way in which that is going to happen is for elements of the bank to survive or for it to be taken over. Everybody knows that it is a direct result of UK Treasury meddling that Kaupthing(IoM) is in this situation - the UK Treasury didn't think this one through properly, and since they have brought down Kaupthing as a direct result, then the burden of responsibility to resolve this problem rests firmly on their shoulders. The UK Treasury should put up whatever stake is necessary to rescue and rebrand Kaupthing (IoM) (just like Kaupthing(UK) was rescued when it was taken over by ING along with several billion GDP from the UK Goverment. Whilst I think an adjourment will probably help - it's killing me waiting for a more positive outcome - I can't sleep at night and I'm stressed beyond belief. I think some priority should be given to return some funds to those who risk losing their home or business, and to those who have nothing to subsist on. If Kaupthing(IoM) is permitted to fail, the Isle of Man is never going to be perceived in the same way again - ie. It is not going to be considered to be a "Safe" haven - just watch the complete banking system of the Isle Of Man collapse as a consequence - nobody in their right minds is going to want to put their money on the Isle of Man again. The only problem with that is that thousands more UK companies and depositors worldwide who have investments on the IOM would also collapse and the UK Government will be in one almighty fix. The UK Government would love the Isle of Man banking industry to collapse, but if it did, it wouldn't help the UK Government at all. The UK Goverment would be met with even more litigation and headaches than they could ever dream possible. It would be far worse than they are presently having to endure because of Kaupthing (keep the pressure up everyone), and new depositors will just deposit funds in other offshore jurisdictions - there's plenty to choose from. This would result in a huge loss of taxes that the UK goverment gleefully collects from the IOM, namely EUSD tax. I'm not going to rest until I've got ALL my money back - nor should any depositor on the IOM - if we don't get our deposits back then the UK Goverment must expect repercussions and legal action.

CR, Uk

Exactly what has PWC achieved so far?…is it in talks with potential buyers for KSFIoM, or will they acknowledge that no buyers are likely to come forward unless the UK Govt releases the 557m funds it froze? And what progress, if any, has there been with the Icelandic Govt? PWC need to communicate their progress better..it is us depositors who are effectively paying their fees, and we are currently not happy with them

SG

It was interesting to note that the Chief minister already new about his back operation well before this meeting & his delegated fill in, suddenly disappeared to London the day before. That does not instill confidence in the IOM government. After all don't we all have a bad back along with a rather large continuous headache from KSFIOM. The delay only exasperates small savers of under 50,000-00 GBP, who really need a definite time frame regarding compensation and I doubt that most of them will be enjoying Xmas as per the IOM government members and Alistair & Gordon who insist on trying to divide the Uk people with their policies, after a botched up job of freezing the KSFIOM

assets in the UK. However, this does nothing to assist the small depositors and only increases the argument of removing all further assets from IOM banks as soon as possible. As for Batman & Robin (Alistair & Gordon), I never would have thought 30 years ago that

you would be shafted so deliberately, by your own UK government!!! and by people who originally supported de-regulation of the banking system. The sooner they are voted out & follow Blair into oblivion, the better. Action now is what we need!! along with a report on what work PWC have actually done to expect payment for?

STEVE

As a depositor with a substancial 6 figure sum of 20 years life saving at stake l feel the 60-day ajournment is good news. I fully understand there are those who do not have access to another bank account and have spent the last 2 months begging from friends and they should not be left to continue to do so for the next 2 months. Some form of interium payment should be made to these people. 60 days sounds like a long time BUT I feel it may only have been 30 were it not for the fact that Christmas is coming (please put a penny in the KSF IOM's hat!!! ) However the Treasury and all involved in the talked about restructuring should have been made to report back to the court every 14 days rather than only by the 15th January. This is way too long and leaves them free to enjoy a Happy CHristmas whilst those whose life they hold in their hands are surrering from financial hardship and the stress of not knowing what the future holds, their lives are "on hold" until this is positvely resolved. Sincerely

JS

To whom it may concern, Adjournment makes sense, well done. You have my vote

SEAN HARTLEY, Depositor

I work for an humanitarian organization for the past 11 years. I lived in 4 different countries in that time, and the Isle of Man provided me with pretty much the only place I could open a bank account in USD. I dont consider myself a tax dodger but a client of an excellent financial center with good banking services. The UK has let this center flourish with full knowledge and under its umbrella for decades. Several UK local authorities are using this center to make profits. The UK should take responsibility then for any misconceptions or facts with regard to tax evasion. Further more, I am now understanding that the Isle of Man is not part of the UK, so it should not be covered by the UK deposit scheme. Fine. But then, it is not acceptable for the UK to freeze the assets of a company from a foreign land. They should return the funds immediately. If not, I think it is time to sue the UK government for what it did, misappropriation of funds and abuse of power, nothing less. How ironic that the victim (Isle of Man) is asking the robber (UK) to represent it in court.

LD, Bangkok, Thailand

70 years old, my Wife and I last saw money 6 October. Our KSF debit card. A Bank customer for over ten years. All our savings there. The balance sheet looked good. Who agreed to lend 60% of the Bank's depositors money in a clear solvency situation? In NZ that would be considered a criminal offence. Maybe new legislation to resolve responsibility commitment? We applaud the efforts to restructure this Bank. Excellent before Kaupthing came along. Alistair darling and Gordon Brown are the President and vice President of UK INC. Just as share prices of Corporations reflect management's ability, so does currency value demonstrate the ability of Government to manage. The UK pound has dropped 27% against Euros in the last couple of years, 8% in the last ten days. With luck they may call an election in the New Year.

Please IOM Government, we are for you, do not worry about losing your mandate to self govern, it would cost UK billions. 'Never pay Danegelt' as Kipling said. However, we are getting a bit hungry. Yesterday scouted round the Banks here in Turkey to try and change a few foreign currency notes we found around the Boat to give us a couple of meals!

Can you please move a mite faster, let us show those failures in Downing Street how to Construct a sound IOM Financial solution to KSF IOM, .

SAILOR

As old sailor's in our retirement in the Mediterranean discarded by Britain since we are out of Britain for more than 6 months every year.

Cannot open a Bank account in UK by telephone, tried six. That leaves us with IOM or other offshore territories, only some under Britain sovereignty. There is little point in Mr Darlings petulance, merely a smokescreen for an inability to recognise a property bubble and it's obvious outcome. How do these people qualify to run a Nation's finance when Private Industry would discard such low level passengers?

Currency value reflects national financial management, just as share prices reflect corporate management quality. The UK has devalued by 27% in less than two years! Right now Isle of Man is no cost to Britain and brings a tidy income especially withholding tax on massive savings that will burgeon to over 30% by 2011 thanks to the Swedes. That is tax they will lose if by stupidity they redirect these savings to other domains. In truth, Mr Darling and Gordon Brown, his predecessor, failed to recognise a property bubble when they saw it. To the extent where British Banks should have been cautioned against borrowing money on the wholesale Market in the East that has now landed Britain with over 600,000,000,000 they are unable to fund. This lack of prescience has been the hallmark of 'tax and spend' governance characteristic of the past decade. 100 years ago this bunch would be in debtors prison.

As clients of Singer and Friedlander for over ten years, everything was fine. Superb service, problems solved efficiently by someone with an English accent actually understood by us and we to them.

Coming out of the share market as it bubbled, your cash goes into the Bank for safety. You check the Bank balance sheet regularly, it's OK.

Check Moody and Fitch ratings, they are OK. Somehow, authorized or pressure maybe from Britain, Kaupthing IOM lends 550,000, 000 (some of it all our life savings) to the UK KSF arm. Funds promptly put into 'Administration' by UK treasury for compensation to UK mainland depositors. It stinks. Using anti terrorist laws as a pathway to secrecy; confirmed by an unprecedented use of the High Court to 'seal'

transactions involved. Notice, there are no Isle of man Banks seeking government assistance by having sold mortgages to people who cannot afford them on tiny deposits. You see, the IOM is a haven for sensible people who save their money for retirement. UK Mainland should copy the concept. Right now, my wife and I, seventy years old, are the only boat anchored outside the marina, absolutely penniless looking fearfully at daily winter weather forecasts. The last time we saw money was the 6 October. On the 9th October our plastic debit card just produced a black screen letting us know what UK Treasury had done to us. This is nothing to do with the validity of IOM banks, just incompetence by UK Government management. There is a tiny pension we get from our earnings in Britain, however, Department of Work and Pensions software is more than 18 months behind international use of IBAN and BIC technology so cannot transmit electronically cash to Greece. They send a cheque!

The Greek banks collect the forex profit then take 30 days to clear the cheque. Wonderful planning Mr Darling!

SAILOR

I believe that a lot more pressure needs to be applied by the FSC and the Isle of Man government in arranging for the return of the 550.million

The Chancellor claims that UK has no involvement with KSF Isle of Man, yet it was the treasury and the Financial Services Authority who in May and June of this year recommended that KSF Isle of Man reduce its exposure to Iceland by moving its assets, and helped to move them to KSF UK this amount totalled 550 million pounds. When the assets of Landsbanki were frozen the assets of KSF UK were transferred to ING under a secret deal arranged by and with the UK Treasury. How can Alistair Darling now say that he has nothing to do with KSF Isle of Man when his own department arranged to transfer the 550 million pounds belonging to the investors of KSF Isle of Man. ?? Why has the transfer of these assets been covered by sealed documents that the treasury refuses to make public. ?? Why do the FSC and the government of the Isle of Man put up with the smear campaign against investors in the Isle of Man . My wife and I are just one of thousand of British citizens with money in this bank. We are not tax dodgers as Alistair Darlings campaign aimed at reducing sympathy claims. We have always and always will pay tax. On opening an account with KSF Isle of Man we had to sign release documents authorising all details of our accounts to be sent to the Inland, and I am certain we are not alone. Come on Isle of Man and the whole of the financial sector, this is not just about KSF this is about your financial lives, if you are beaten in this issue it spells avery dim future for the Island.

JEFF & LINDA, UK

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