Isle of Man hails prospect of better recovery for KS&F depositors
From News Apr 24 2009 BY: Helen Burggraf
, Deputy Editor
, International Adviser
The Isle of Man government says new information from the UK arm of Kaupthing Singer & Friedlander could mean "quicker and higher recoveries" for depositors caught in the collapse of the Icelandic bank's IoM operation last October.
The Isle of Man government says new information from the UK arm of Kaupthing Singer & Friedlander could mean “quicker and higher recoveries” for depositors caught in the collapse of the Icelandic bank’s IoM operation last October.
Ernst & Young, administrators of the UK arm of the bank, this week issued an interim report indicating a possible overall recovery rate of at least 50% for UK creditors of KS&F.
“This is higher than anticipated”, the Isle of Man government said in a statement on Friday, “and moves the estimated minimum recovery rate for [depositors in the Isle of Man branch of the] bank from 65% to about 75%”.
The improved prospect of returns from the UK could accelerate repayments under a so-called Scheme of Arrangement the Isle of Man government has proposed for Isle of Man depositors, the statement added, noting that individual entitlements of up to £50,000 “could be paid in full in 12 months instead of 24 months”.
The Scheme of Arrangement was conceived as an alternative to liquidation of the company and activation of the Island’s depositors compensation scheme.
With higher dividends expected, the outlook for larger depositors would be better too, according to the statement, which added that the Scheme of Arrangement has been amended to reflect the latest information from the UK.
The revised SoA and other information are expected to be issued to depositors next week, ahead of their vote on the proposal on May 19. If approved, the High Court will be asked to sanction the Scheme on May 27.