In this update I set out a report on the creditors meeting
convened by the Administrators of Kaupthing Singer &
Friedlander Limited ("Kaupthing UK"), issuing Statements as at 9
October 2008 and actions currently being taken re Edge accounts and
other online information.
A PDF copy of the Administrators Proposals is available here.
Meeting to consider the
Administrators Proposals in respect of Kaupthing UK
A meeting of creditors of Kaupthing Singer & Friedlander
Limited (in Administration) ("Kaupthing UK") was held on Monday, 1
December 2008 at 11am at Café Royal, 68 Regent Street, London. The
meeting was attended by the Joint Liquidator Provisionally on
behalf of KSFIOM.
The purpose of the meeting was to consider the proposals of the
Administrators of Kaupthing UK and to decide upon the formation of
a Creditors Committee. The Administrators read from the statement
of proposals to creditors which had been circulated with the notice
of the meeting.
With regard to dividend prospects the Administrators indicated
it was too early to give a realistic estimate or range but that
they will be discussing this with the duly appointed Creditors'
Committee. It was indicated that the intention was to keep
creditors informed in respect of any progress in this area and to
pay an interim dividend as soon as was felt possible.
With regard to the directors Statement of Affairs, the directors
of Kaupthing UK had obtained an extension in respect of the filing
deadline but it was anticipated it would be filed shortly. The
Administrators advised that it was likely an order would be sought
from the Court under section 231 of the Insolvency Act 1986
limiting disclosure for commercial and other reasons. It was
envisaged that a summary Statement of Affairs would be made
available to creditors.
The Administrators had applied to Court for dispensation to
release a list of creditors on the grounds it would be prejudicial
to the interests of creditors for list of creditors names,
addresses and amounts due to be released. The Court had duly
granted an order on 13 November 2008. It was also confirmed that by
Court order the documents on the Court file relating to the
appointment of the Administrators were sealed and not open for
Mr Brazzill referred to the consolidated and draft unaudited
balance sheet as at 7 October 2008 included in the proposals. He
indicated that the position with regard to £981m of other
liabilities was likely to change substantially as part of ongoing
reconciliation work. He also indicated that it was believed that
Kaupthing h.f. was a net debtor of the company but that work was
ongoing to establish the position. It was stressed that many areas
of the balance sheet were affected by the impact of set off which
had the potential to change the position quite materially. It was
confirmed that as at 26 November 2008, approximately £270m, €55m
and US$130m was held in cash by the Administrators and that a
Receipts and Payments account would be circulated in due
The Administrators advised that they were not in a position to
calculate the total level of creditors given the substantial
uncertainties relating to the balance sheet. It was confirmed that
claims totalling approximately £4.7bn had been submitted for voting
purposes at the meeting, including an estimated claim for £3.5bn
submitted by the Financial Services Compensation Scheme ("FSCS").
It was stressed that the FSCS will stand in the shoes of depositors
it pays out, i.e. as an unsecured creditor.
So as to protect the position of KSFIOM we have stated our
desire to be a member of the Creditors Committee. A Committee is
made up of 3 to 5 creditor members and creditors are elected by
votes by value of claim. Over 40 creditors put their name forward
for membership of the Committee and whilst a committee was formed
KSFIOM had insufficient votes to be appointed as a member.
It was subsequently confirmed that the following had been voted
onto the Creditors' Committee:-
Financial Services Compensation Scheme
Transport for London
Trustees for the Singer & Friedlander Pension Scheme
Peterborough City Council
Edge and online
We are currently working to restore the Edge and online accounts
in a "READ ONLY" format so that customers can view their account
information online, for a temporary period. The Bank is not able to
complete this process in-house due to the Information Technology
We will be sending an email to all Edge account holders once the
system has been activated and will post an update on the website.
Once the system is live it will be held open until the end of
September statements were issued to customers however the Bank
does not produce statements for Fixed Term Bonds, Online accounts
or Edge accounts. We are planning to send statements to customers
as at 9 October 2008.
The objective of the statements is to provide customers with the
balance of the funds deposited with the Bank. As stated the Bank's
IT system does not allow the production for statements relating to
fixed term bonds.
For information purposes only and so as to reflect the claims of
depositors as at the 9 October 2008 the Banks system will show
early maturity of fixed term deposits as at 9 October 2008. The
Capital and interest accrued to date in respect of these fixed term
deals will then be credited to each customer's account. Many
Customers received a statement for these accounts as at 30
September 2008 which showed a Nil balance. The Statements as at 9
October 2008 will show the receipt of these funds into their
account. In the minority of cases where the deal was set up from
funds from another Bank and no other KSFIOM account exists then a
new account will be credited to show the balance of the fixed term
deal. This has been done purely for presentational purposes to
enable these balances to be included on statements and does not
affect deposit terms.
We hope to issue statements to customers before the Christmas
The Isle of Man Treasury is investigating the possibility of
making an interim payment to depositors in the Bank. We continue to
provide information and assistance to them whilst they continue to
investigate whether this can be achieved.
As previously, the best way to make contact is to write to the
bank or to email email@example.com. If you need to
telephone the bank, please use the main switchboard number +44 1624
Joint Liquidator Provisionally