Vote set for £180m Kaupthing scheme
From News Apr 15 2009 BY: Helen Burggraf
, Deputy Editor
, International Adviser
Depositors caught up in last October's collapse of the Isle of Man's branch of Kaupthing Singer & Friedlander will be given a chance to vote next month on a 'scheme of arrangement' (SOA) proposed by the island's Treasury.
Depositors caught up in last October’s collapse of the Isle of Man’s branch of Kaupthing Singer & Friedlander will be given a chance to vote next month on a scheme of arrangement (SOA) proposed by the island’s Treasury.
The decision to let the depositors decide, on 19 May, whether to go ahead with the SOA was handed down last week by the Isle of Man’s high court in Douglas, as angry depositors protested outside.
After the vote the matter will return to the court, which on 27 May will make a final decision on whether to sanction the scheme or wind up KSFIoM.
If the depositors reject the scheme of arrangement, which is understood to be likely even though the Isle of Man government argues that it is the best option for them, a depositor compensation scheme would be triggered.
Among the advantages of the SOA is that it offers a significantly better return for those whose savings were held in KSFIoM through an insurance bond, according to Isle of Man Finance chief executive John Spellman.
In a statement, the treasury said it “believes the SOA has the potential” to pay out more than 50% of the bank’s depositors in full within three months, and more than 70% in full within two years. It has set aside £180m to support the scheme.
Depositor anger
However, a number of depositors posting comments on the matter on the Isle of Man Today news website (http://www.iomtoday.co.im/news/High-Court-approves-next-stage.5160012.jp) remain unconvinced. some argue that the Isle of Man should obtain a loan from the UK government in order to pay them and their fellow depositors back.
Many depositors remain angry that the Isle of Man branch of Kaupthing Singer & Friedlander transferred more than £550m to its UK sibling just before the UK put the bank into administration, and that this matter has not been the subject of a blown investigation.
Further information on the proposed SOA is available from the provisional liquidator, PriceWaterhouseCoopers, at the following helpline, according to the Isle of Man Government’s website: +44(01624) 699 340. See www.gov.im for more information.