2009 Updates

30 DECEMBER 2009

Claim against Kaupthing hf

We can confirm that the Joint Liquidators have lodged a claim with the Winding up Committee of Kaupthing hf. The claim takes account of balances held with Kaupthing hf and amounts considered to be due under the parental guarantee. We understand that, under Icelandic law, the Winding up Committee is required to accept or reject all claims by 22 January 2010, however it may apply for an extension of time. Given the volume of claims which have been received by the Winding up Committee, it is realistic to expect that an extension will be applied for and that it may be several months before our claim is agreed.

As we fully expect the amount claimed to be subject to review, potential challenge and negotiation by the Khf Winding up Committee in Reykjavik, and although we will share the amount and basis for its calculation with the Committee of Inspection, we hope that the general body of creditors will understand why we consider it would be imprudent to share this information on a wider basis as it could prejudice our negotiating position with the Khf Winding up Committee. However, we will include an update on the agreement of the claim with the Khf Winding up Committee as part of our regular updates following our meetings with the Committee of Inspection. We will post details of our claim on the website as soon as it has been agreed by the Winding up Committee.

21 DECEMBER 2009

Parental Guarantee

We have been asked by a number of parties to give guidance to creditors/depositors regarding whether they should be making individual claims on Kaupthing Bank hf in respect of its parental guarantee to Kaupthing Singer and Friedlander (Isle of Man) Limited. As you will appreciate, it is not the joint liquidators’ duty to give advice to creditors in relation to the making of claims in that liquidation, particularly since the Joint Liquidators might have a conflict of interest in doing so, since any successful claim by an individual creditor of KSFIOM would reduce the amount received by the Joint Liquidators for the benefit of the creditors of KSFIOM as a whole. Accordingly, if creditors wish to seek such advice then it is open for them to do so at their own cost.

However, in the spirit of being as helpful as we can, we can see no downside to creditors if they wish to make individual claims in respect of the parental guarantee. We would reiterate the statement made in the posting on the website on December 18, that it may well be that individual claims are rejected by the winding up committee of Kaupthing Bank hf, however by making such a claim creditors individual rights are, as a minimum, preserved.

The Joint Liquidators would again emphasise that the above does not represent legal advice, and cannot be relied upon by creditors of KSFIOM, who should take their own advice in relation to any claim that they may wish to bring against Kaupthing Bank hf in their personal capacity.

18 DECEMBER 2009

Claims against Kaupthing hf

The Joint Liquidators have been in discussions with Jonsson & Hall, the Icelandic law firm advising them upon KSFIOM’s claim under the Parental Guarantee provided by Kaupthing Bank hf (“the Parental Guarantee”).

During those discussions Jonsson & Hall mentioned certain facts that relate to all claims under the Parental Guarantee, whether by KSFIOM or anyone else, which the Joint Liquidators feel may be of interest to individual creditors of KSFIOM, and which are set out below.

The Joint Liquidators would emphasise that the provision of these facts should not be regarded as the provision of legal advice by the Joint Liquidators or by Jonsson & Hall, and cannot be relied upon by creditors of KSFIOM in reaching any decision as to whether to claim under the Parental Guarantee in their personal capacity. Creditors of KSFIOM considering doing so should take their own legal advice in Iceland.

(1) All claims of whatever nature relating to Kaupthing Bank hf, including claims under the Parental Guarantee, and claims for breach of warranty relating to the Parental Guarantee, must be lodged with the Winding-up Committee of Kaupthing Bank hf (“the Winding-up Committee”) by 30 December 2009.

(2) The Winding-up Committee is required by Icelandic statute to accept or reject all claims relating to Kaupthing Bank hf by 22 January 2010, although Kaupthing Bank hf may apply for an extension of time within which to consider claims.

(3) Any person who wishes to appeal against the decision of the Winding-up Committee in relation to their claim must lodge their appeal (referred to as an “objection”) by the date of the Meeting of Creditors of Kaupthing Bank hf on 29 January 2010. Failure to do so means that the decision of the Winding-up Committee is accepted.

(4) Following the lodging of any objection, the Winding-up Committee must attempt to settle the dispute with the creditor concerned. If settlement proves impossible, the dispute will be referred to the District Court of Reykjavik. An appeal ultimately has to be heard in the Supreme Court of Iceland.

The Joint Liquidators have been informed by Counsel for the Winding-up Committee that the Winding-up Committee is of the opinion that only the Joint Liquidators can make a claim under the Parental Guarantee, upon the basis that KSFIOM itself was the recipient of the Parental Guarantee, and not the individual creditors. Accordingly, it seems likely that any claims by individual creditors under the Parental Guarantee will be rejected by the Winding-up Committee. However, it would be open to any individual creditors concerned to appeal against that decision.

The Joint Liquidators would again emphasise that the facts set out above do not represent legal advice, and cannot be relied upon by creditors of KSFIOM, who should take their own advice in relation to any claim that they may wish to bring against Kaupthing Bank hf in their personal capacity.

11 DECEMBER 2009

Cash position

Attached is summary of balances held at 30 November 2009.

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 Balance 30 November 2009

Loan book

Attached is the summary of the loan book as at 30 November 2009.

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 Loan Book 30 November 2009

KSFUK claim

The Administrators of KSFUK have declared a second distribution of 10%, bringing cumulative distributions to 30%. They have also indicated their intention to pay a further dividend in April or May 2010, but are unable at this stage to indicate a percentage. They are also unable at present to indicate the timing or amount of further distributions, which will be dependent upon asset realisations.

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 Claim against KSFUK

Estimated outcome

Now that we have better information about the performance of the loan book and the estimated distributions from KSFUK, we have been able to produce an estimate of future distributions for creditors. Our current estimate is that ultimate distributions will be between 82.88% and 93.76%, however it should be borne in mind that these figures are based on estimations of future asset realisations, and therefore neither the timing or value of future distributions can be guaranteed. These estimates will be updated periodically when further information becomes available.

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 Dividend Summary

07 DECEMBER 2009

Second distribution

The Joint Liquidators are pleased to announce that a second distribution of 15.2% will be paid on 8 December 2009 to all creditors whose claims have been agreed.

There are some cases where payments are being held over due to queries over the amounts claimed, payment details or signatures. We will continue to work through these queries as quickly as possible so that catch-up payments can be made to the relevant creditors.

We are aware that there are a number of potential creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme. We invite those creditors to submit their claims as soon as possible so that they can receive the distributions to which they are entitled.

Future distributions

As the liquidation has progressed, more information has become available in respect of potential asset recoveries and are now in a position where we will shortly be able to release a meaningful estimate of future distributions. We intend to post our estimate on the website in the next few days in order that creditors may have a better indication of the final outcome.

25 NOVEMBER 2009

Committee of Inspection

Minutes of the Committee of Inspection meeting held on 5 November 2009 are attached. Also attached is a summary of cash deposits held at 2 November 2009, an update on the loan book as at 31 October 2009 and the expenses policy for the Committee which was agreed at the meeting.

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 Minutes of Committee of Inspection

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 KSF ExpensesPolcicy for COI

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 KSF Cash Summary 2 November 2009

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 KSF Loan Book Update 31 October 2009

Committee of Inspection Policy Statement

The attached is a document which has been drafted by the Committee of Inspection. The Committee intend to update this document periodically as the liquidation progresses.

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 Committe of Inspection Policy Statement

Filing of proof of claim forms by the Joint Liquidators

The Winding up Rules require the Joint Liquidators to file every month with the Rolls Office, copies of all proofs of debt submitted by creditors, together with a list indicating which have been wholly or partly admitted and wholly or partly rejected. This would incur considerable costs, which the Joint Liquidators are keen to avoid in order to benefit creditors. The Joint Liquidators take the view that it would be easier for the creditors of KSFIOM to have access to the proofs and the lists by attending the company’s offices, rather than attending the Rolls Office. Further, the creditors will not have to pay the (admittedly very small) fee required to inspect the proofs and lists at the Rolls Office. Accordingly the Joint Liquidators have applied to the Court for permission to dispense with the requirement to file these documents with the Rolls Office, and have given the Court an undertaking to maintain them for inspection by creditors and contributories at the offices of the bank. A copy of the relevant Court Order is attached. Creditors are entitled to inspect the list and then inspect any particular Proof of Debt which they may have reason to want to inspect, with the exception that creditors are not entitled to inspect Proofs of Debt that have been held over (i.e. those where a decision to admit or reject has not yet been made).

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 Court Order

Second distribution

I can confirm that it is our intention to pay a second distribution in December 2009. The amount of dividend cannot yet be confirmed, however it is expected to be in the region of 14%. The amount will be confirmed in early December when the amount of cash available for distribution is known.

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Tynwald Select Committee

The Tynwald Select Committee has been taking evidence regarding the events leading up to the collapse of the bank. For the information of creditors, transcripts of the oral evidence given by the former Directors of the company and the Financial Supervision Commission are attached. The Committee’s report is expected to be published in March 2010.

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 Tynwald Directors Oral Evidence

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 Tynwald FSC Oral Evidence

10 NOVEMBER 2009

Committee of Inspection

A meeting of the Committee of Inspection was held on 5 November 2009. Minutes of the meeting will be posted on this website as soon as they have been agreed. Among the matters discussed was the strategy for ongoing communication with creditors. Following on from that discussion, and given the additional information which is now available from the Administrators of KSFUK, we will shortly be releasing an indicative distribution schedule and updating our estimate of the final outcome.

Kaupthing hf

A meeting of creditors was held on 20 October to discuss the extension of the moratorium and proposals regarding New Kaupthing, which was created to run the group’s domestic Icelandic banking business. The relevant documents can be downloaded from www.kaupthing.com

Parental Guarantee

The Winding up Committee of Kaupthing hf have indicated that claims against them must be made by 30 December 2009. We will be making a claim on the basis of the parental guarantee for the shortfall in the company’s assets. It should be noted that neither the Winding up Committee nor the Resolution Committee of Kaupthing hf have indicated an estimated return to creditors, and it may be some time before this information becomes available. I have received a number of queries from creditors who have asked whether they should submit claims individually. The Winding up Committee have stated that it is their opinion that only the Joint Liquidators of KSFIOM can make a claim on the basis of the guarantee as KSFIOM was the recipient of the guarantee, not individual creditors. I understand that creditors of Landsbanki Guernsey have made individual claims against their parental guarantee, however, I also understand that the wording of their guarantee is different to that of KSFIOM.

KSFUK

The Administrators of KSFUK have announced that they estimate their ultimate distribution to unsecured creditors should be in the range of 60% to 75%. This is dependent on the realisation of assets and is not guaranteed. They have also indicated that they will pay a second distribution of not less than 7% in December 2009.

Agreement of creditors’ claims

The following statistics show the current position regarding the agreement of creditors’ claims:

Creditor Stats 10 Nov 09

The DCS claims which have been approved have all been advised to the administrators of the DCS, and the relevant first distribution payments have been made to them (approximately £62.8 m). Any DCS claimants who have not yet received their payment from the DCS should contact:

Isle of Man Depositors’ Compensation Scheme
41 Athol Street
Douglas
Isle of Man
IM99 1HN

info@dcs.im

+44 1624 625 680 (UK office hours only)

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Second distribution

I can confirm that it is our intention to pay a second distribution in December 2009. The amount of dividend cannot yet be confirmed, however it is expected to be in the region of 14%. The amount will be confirmed in early December when the amount of cash available for distribution is known.

14 OCTOBER 2009

First distribution

As previously noted, a number of payments have been held over at this stage due to queries over amounts claimed, payment details or signatures. There are also some instances where depositors originally intended to apply through the Depositors Compensation Scheme but have changed their minds and their direct claims are still in the process of being approved. We are working through these queries as quickly as possible so that, where appropriate, catch-up payments can be made to the relevant creditors. Catch-up payments are being made on a regular basis so as to minimise delays. I realise that any delay will be frustrating for creditors and would appreciate your patience while we deal with the large number of queries.

Creditors who have not yet submitted a claim

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Future Distributions

The timing and value of future distributions is uncertain, as it depends upon the value and timing of future asset realisations, particularly from the loan book and KSFUK. It is anticipated that a second distribution will be made in December 2009 when further funds are expected to become available – an announcement will be made on this website in early December.

Isle of Man Income Tax concession

The Isle of Man Assessor of Income Tax has released Practice Note 159/09 “Taxation due from Kaupthing Singer and Friedlander (Isle of Man) Limited (in Liquidation)”, which contains a tax concession for Isle of Man resident individuals with accounts at the company which were credited with interest on or after 6 April 2008. The document can be viewed  here.

Please note that the joint liquidators cannot give tax advice to creditors of the bank – it is up to the individuals concerned to take their own advice and make the necessary returns and disclosures to the relevant tax authorities.

Kaupthing hf

The Resolution Committee has called for a Creditors’ Meeting to be held on 20 October 2009, primarily to discuss the agreement between the Resolution Committee and the Icelandic Government on New Kaupthing. At the meeting, creditors will be provided with latest financial information on the Bank. Also, there will be a discussion on possible extension of moratorium on debt payments.

Habana legal case

As previously noted, the plaintiff in the Habana case has lodged an appeal. We have been advised that the appeal will be held on 25 November 2009.

03 SEPTEMBER 2009 (i)

First distribution

I am able to confirm that the first distribution in the liquidation has been set at 24.8 pence in the pound. Further details regarding the distribution will be posted on this website following a Court hearing which is being held at 2pm today.

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Committee of Inspection

The first meeting of the Committee of Inspection was held on Wednesday 19 August. Attached are minutes of the meeting which provide an update on the key issues in the liquidation.

 KSF C of I Minutes 19 August 2009

Loan book

Attached is a document which was presented to the Committee of Inspection regarding the loan book, including current issues and the ongoing strategy for realisation.

 KSF Loan Book Update for COI 19 August 2009

Habana legal case

We have been notified that the plaintiff in the Habana case has lodged an appeal. We have not yet been advised of the date on which the appeal will be held.

03 SEPTEMBER 2009 (ii)

First distribution

I am able to confirm that the first distribution in the liquidation has been set at 24.8 pence in the pound. The process of inputting payment details has begun and it is intended that the payments will be made on Friday 4 September 2009.

A number of payments are being held over at this stage due to queries over amounts claimed, payment details or signatures. There are also some instances where depositors originally intended to apply through the Depositors Compensation Scheme but have changed their minds and their direct claims are still in the process of being approved. We are working through these queries as quickly as possible so that, where appropriate, catch-up payments can be made to the relevant creditors. Catch-up payments will be made on a regular basis so as to minimise delays. I realise that any delay will be frustrating for creditors and would appreciate your patience while we deal with the large number of queries.

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Future Distributions

The timing and value of future distributions is uncertain, as it depends upon the value and timing of future asset realistions, particularly from the loan book and KSFUK. It is anticipated that a second distribution will be made in December 2009 when further funds are expected to become available – an announcement will be made on this website in early December.

20 AUGUST 2009

First distribution

The Joint Liquidators will shortly be paying the first distribution to unsecured creditors. Based on cash currently in hand, the first distribution would be 22.1 pence in the pound. However, during the course of the next two weeks, further material receipts of cash are expected which, if received, would increase the distribution further.

In order to ensure that the first distribution is as large as possible, it has been agreed with the Committee of Inspection that the distribution will be paid on Friday 4 September 2009. A further announcement will be made on this website when the level of the first distribution has been finalised, and a further update on the progress of the liquidation will be made on this website in the next few days.

30 JULY 2009

Court Orders: 23 July 2009

The High Court of Justice of the Isle of Man Chancery Division has made the following two court orders:-

  • To appoint Michael Simpson and Peter Norman Spratt as Joint Liquidators.
  • To establish the Committee of Inspection. The initial members of the committee will be;

i. Axa Isle of Man Limited

ii. Royal Skandia Life Assurance Limited

iii. Peter Wakeham

iv. Gavin Brake

v. The Trustees of the Singer & Friedlander (IOM) Retirement Benefit Scheme

vi. Simon Bessant

vii. Stuart Roberts

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 Court order Joint Liquidators 23 July 09

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 Court Order Committee of Inspection 23 July 09

29 JULY 2009

Reminder for creditors to complete a Proof of Debt.

The deadline for registration for the first dividend is 12 August 2009. There are some creditors who have neither filed a Proof of Debt with the Joint Liquidators nor claimed with the Isle of Man Depositors’ Compensation Scheme (“DCS”) or the Early Payment Schemes (“EPS”).

The attached letter and Proof of Debt have been mailed to a number of creditors which have not submitted a claim to date.

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 Letter 29 July 09

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 Proof of Debt

22 JULY 2009

Joint Deemed Official Receivers’ and Joint Liquidators’ report for the period from 9 October 2008 to 15 July 2009

Please find attached the above named report.

We would like to draw attention to the following paragraphs:-

  • Page 17, paragraph 3.5. Amount owed by KSF UK. The Administrators of KSF UK have confirmed that the minimum dividend will be 20p in the pound and payable in July 2009.
  • Page 19, paragraph 3.10. Other legal matters: Bank of England. A judgment was handed down on 10 July. Although it was agreed that KSF IOM should be entitled to a share of the £147m deposit, it not known at this stage what the company may actually receive.
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 Report to Creditors

First meeting of creditors held on 7 July 2009

The results of the voting have been collated and attached below.

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  Vote results 7 July 2009 First Creditors Meeting

01 JULY 2009 (i)

Judgment delivered by Deputy Deemster Corlett in the respect of the application made by members of the KSFIOM Depositors’ Action Group in respect of the costs of the Scheme of Arrangement (“the Scheme”).

Deputy Deemster Corlett has delivered his judgment on 30 June 2009, in respect of the application made by members of the KSFIOM Depositors’ Action Group in respect of costs of the Scheme.

The judgment amongst other matters indicates that :- 

  • That the application was considered by Deputy Deemster Corlett in the light of precedent in respect of civil litigation and that the awarding of costs was at the discretion of the Court.
  • That there is a particular rule in litigation involving winding up petitions and schemes of arrangements that there should be one set of costs for any successful group of creditors.
  • That those who present or promote a scheme will not normally be subject to an adverse order for costs unless they have been guilty of “frivolous or careless conduct” in presenting the Scheme.
  • That there was no misconduct in relation to the promotion of the Scheme
  • That it was difficult to see how it could be claimed that the Scheme was devoid of any substantial support from the general body of KSFIOM’s creditors, as a majority in number (not in value) voted in favour of the Scheme.
  • That the DAG’s costs in respect of the Scheme and the Winding Up Petition should be paid out of the assets of KSFIOM as a pre preferential debt, to be agreed by a costs assessor.
  • That in the Deemster’s view the Joint Liquidators Provisional adopted a proper approach to the work which they had done in relation to the Scheme and there was no merit in the suggestion that their costs should be disallowed.
  • The costs of the Joint Liquidators Provisional in relation to both the Scheme and the Winding Up Petition will be paid out of the assets of KSFIOM, as a pre preferential debt.

The judgment refers to the decision of the Joint Liquidators Provisional not to make a similar claim as that made by the Depositors Action Group against the Treasury for payment of their costs in relation to the Scheme and the Winding Up Petition.

The Joint Liquidators Provisional wish to make clear that their decision in this regard was based solely on the extensive legal advice that they obtained as to the prospect of any such application being successful. In particular advice was sought from leading Queens Counsel. In the absence of any legal advice that there was a reasonable prospect of being successful in such an application, the Joint Provisional Liquidator considered that they would have been derelict in their duty to creditors if they had chosen to disregard the legal advice they had received and had pursued such an application. Indeed the judgment makes clear that as the Depositors Action Group’s application for its costs to be met by the Treasury had been rejected, it follows that an application for the Joint Liquidators Provisional costs to be met by the Treasury would be rejected.

The full judgment is below and can also be found on this link:

http://www.judgments.im/content/J964.htm

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 Judgment 30 June 09

01 JULY 2009 (ii)

Nominations for the Committee of Inspection

As referred to in Section 1.8 of the letter to creditors dated 10 June 2009, the following nominations have been received in respect of the Committee of Inspection:

Nigel Smith

I am a retail depositor with about £98,000 and $430,000 at risk and have been involved with collating questions from depositors who post queries on the Depositor Action Group website to Mike Simpson (latterly Liquidator Provisionally, now Liquidator) on bi-weekly calls. While I have not sought or hold proxy votes for other creditors, I believe that I have been involved and provided a useful function to retail depositors who are looking for specific answers and also to the LP in helping reduce the amount of similar questions directed at his offices over the last 6 months.

I am 38 years old and a Chief Marketing Officer of a large technology company based in the UK.

Axa Isle of Man Limited

AXA Isle of Man Limited is a wholly owned subsidiary of the AXA group and has been offering offshore insurance products on the Isle of Man since 1992. It is one of the leading offshore insurance companies offering products into the UK market. AXA Isle of Man Limited understands the offshore financial market and its customer base and, after the collapse of Kaupthing Singer & Friedlander (Isle of Man) Limited, has worked with other insurance creditors to secure the solution that best suited its policyholders. AXA Isle of Man Limited has also held talks with other interested creditors and freely exchanged views as to the best way forward, not always in agreement, but always with the aim of maximising the return to creditors.

Gavin Brake

Age 38. UK national, UK tax payer. Private retail depositor in KSFIOM. Currently living in Devon in the UK. Educational background – degree from Cambridge University. Professional experience as follows, 1993 – 2005: Goldman Sachs, of which 1993 – 1997 Investment Banking/Mergers & Acquisitions (in UK & US), 1997 – 2000 Equities (Capital Markets, Structured Trades, Derivatives, UK, Europe & Nordic Regions, Emerging Markets), 2000 – 2005 Financing Group (Managing Director 2004 and Joint Head of UK Financing Business for Goldman Sachs). Extensive financial and legal experience working with both major corporate client and Governments. 2005 – present: Devon (change of lifestyle/semi retired). I now own two farms in Devon, one equestrian based and one under development. Chairman of my local Parish Council. One of four trustees of a 640 acre private common land estate in my parish. Also own & manage two small private limited companies, both of which represent family businesses. Since KSFIOM went into provisional liquidation I have undertaken a number of important initiatives to further the interests of depositors including (i) travelling to Iceland to meet in person with the Finance Ministry, Chairman of the Resolution Committee and Moratorium Supervisor of Kaupthing Bank Hf, (ii) various meetings with Alan Bell, IOM Treasury Minister and other representatives of the IOMG, (iii) meetings with senior Conservative MPs and members of the Shadow Cabinet in London, (iv) instigating a group legal action on behalf of depositors with “inflight funds” to seek compensation from those parties in the UK responsible for preventing bank transfers in the week prior to provisional liquidation, (v) promoting the interests of higher value depositors though the HNW Committee of 9, of which I am one member, (vi) holding & exercising the proxy vote on behalf of higher value depositors in the recent vote against the proposed Scheme of Arrangement. I have personally funded all my activities/travel to date. In summary, I believe I have the necessary skills, relevant professional experience and can commit the time required for a role on the Committee of Inspection.

William McMurray 

  • Major depositor with Kaupthing Singer & Friedlander (I.O.M)
  • Resident, Isle of Man
  • 70 years of age
  • Retired Professional Engineer C. Eng. F.I.E.E. F.I. Mech.E
  • Retired 1997
  • Business experience until retirement included Chief Executive positions with industrial corporations in U.K. , U.S.A, and associates in Europe
  • Some years prior to retirement I completed a Management Buy Out of six engineering companies which I subsequently registered with full listing on the London Stock Exchange
  • The businesses were sold in 1997 with significant premium to shareholders
  • I submit these details for depositors consideration whose interests I would hope to serve, without bias, on the proposed committee

Michael James Lees

Manx born living in the Isle of Man. Dob 20.7.48

Retired in December 2008 from a local bank Conister Tust Ltd. I worked for the bank for 40 years and had a vast experience of lending having held the position of senior local Manager for some 20 years. My last position with the Bank was Head of marketing which involved being a member of the Asset and Liability committee of the Bank which gave me an understanding of the deposit taking side of the business.

Stuart Roberts

I am an individual retail foreign currency depositor with $530,000 on deposit. I have been actively involved since the 9th October, initially making numerous television appearances both on national and local TV news, national radio and national and local newspapers to bring media attention to the plight of depositors in KSF IOM. I later joined the DAG Strategy Team and attended meetings with the IOM Treasury and Alix Partners to discuss the proposed scheme of arrangement. I was responsible for the statistical analysis and comparison between the SoA and Liquidation & DCS that enabled depositors to make an informed decision as to how to vote and ultimately led to the defeat of the proposed SoA. I was the nominated proxy for DAG at the vote on the SoA and carried over 1000 depositors votes in that role.

I am in communication with other members of the DAG Strategy Team on a daily basis and am involved in the ongoing communication with the media, politicians and financial institutions working towards the DAG’s objective of rightful return of 100% to all depositors. As a nominee for DAG I will be asking creditors to send their proxy forms in the name of Robert Coates (who has co-ordinated our Helplines & SoA voting). He will cast the votes on my behalf and under the direction of the DST.

As a member of DST I have been privy to a considerable amount of information that is not in currently in the public domain regarding events surrounding the demise of KSFIOM and I have the benefit of being able to consult with DAG appointed lawyers Edwin Coe LLP despite the confidentiality agreement that will be required. Edwin Coe LLP has been the appointed DAG lawyers throughout and have a thorough understanding of events and are in the best position to advise depositors during the next stages of this saga, providing impartial and appropriate advice and direction that benefits all of us.

I have worked in the IT consultancy and supply industry for 20 years and am currently managing director of an IT consultancy firm. I am a UK national and UK tax payer.

Simon Bessant

I am an individual retail depositor with substantial amounts of life and family savings deposited in KSFIOM, both in Sterling and Euros and do not benefit from the DCS. I have closely followed developments on KSFIOM since 7 October 2008, and I was present on the DAG website from the early moments attempting to answer concerns and questions of depositors in a legal capacity, for this reason that I was invited to join the DST and have accepted the responsibility of being of the Legal Team for DST representing the 2,500 members of the Depositors Action Group. I am in constant contact with the other members of DST in relation to the strategic and legal issues that confront DAG and was involved in the report on the qualitative analysis of the SoA that was pivotal for many in the decision to vote against the proposed SoA.

My role within the DST has afforded me access to otherwise unattainable information and communication and I have given input on media and political liaison that occurs on a daily basis on behalf of DAG, with the key objective remaining the rightful return of 100% of funds to all depositors. As a nominee for DAG I would ask creditors to send their proxy forms in the name of Robert Coates (who has co-ordinated our Helplines & SOA voting). He will cast the votes on my behalf and under the direction of the DST.

I am a solicitor, having worked at a law firm in the City for over 9 years and latterly in-house as general counsel for a company active in the renewable energy sector, with a particular expertise in banking and finance.

Alex Marsella

I am an individual retail depositor with £530,000 on deposit from my home sale. Since the tragic demise of KSFIOM I have endeavoured to find solutions that fit with the DAG’s objective of the rightful return of 100% of funds to all depositors. I am convinced that this is still the right objective. I have also been working behind the scenes to develop relations with the political establishment both in the UK and Iceland and have kept the DAG team appraised of any developments that will benefit our cause.

Having been in contact with members of DST since October, I was pleased to accept the request to donate more of my time and professional skills by joining the team, and have been in constant contact with DST now to ensure I am brought up to speed with all the key efforts and information attained over the last nine months. I am in constant communication with the other members of DST and as a member of the team I will be able to consult with Edwin Coe LLP on behalf of retail depositors throughout the process of the creditors committee, despite the confidentiality agreement that will be in place.

As a nominee for DAG I would ask creditors to send their proxy forms in the name of Robert Coates (who has co-ordinated our Helplines & SOA voting). He will cast the votes on my behalf and under the direction of the DST.

I am a Chartered Accountant with 21 years of experience both within the Big 4 community and subsequently running businesses in the technology arena. I have previously worked for PWC (formally Coopers and Lybrand for 4 years) and understand their methods of working and I am still involved with partners of these firms through the company with whom I am employed. I believe that I can add value to the tremendous work and effort that the DAG has already achieved on depositors behalf.

Singer & Friedlander (Isle of Man) Limited Retirement Benefits Scheme

The Singer & Friedlander (Isle of Man) Retirement Benefit Scheme is the largest non-depositor creditor of the company. Section 75(1) of the Pensions Act 1995, as applied in the Isle of Man, states that if “the value at the applicable time of the assets of the scheme is less than the amount at that time of the liabilities of the scheme, an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme”. The pension scheme debt advised by the Scheme Actuary is estimated at £3.0 – 3.5 million (a calculation is taking place at present).

The pension scheme has two trustees: Law Debenture, based in the UK; and Boal & Co (Pensions) Ltd, based in the Isle of Man. It is proposed that Mr Mark Kiernan MPMI, a director of Boal & Co, is the nominated representative of the Singer & Friedlander (Isle of Man) Retirement Benefit Scheme for the purpose of the creditors’ committee.

Peter Wakeham

I am a retired business man with over 30 years experience as a senior executive or consultant with blue chip corporations and 10 years experience as founder and CEO of my own business. I believe I have the time, commitment and relevant experience to represent depositors´ interests on the Committee.

I am a retail depositor with over £600,000 on deposit. I manage my retirement income personally and this was not one of my better investments! I have given my General Proxy to Gavin Brake as part of the HNW team. I plan to attend the Creditors´ Meeting in the IOM on July 7.

During the past several months I have spent considerable time and £32,000 of my own money on this project. Initially I engaged my own lawyers, Manches, to represent me personally and after some three months they succeeded in introducing me to Edwin Coe and hence to DAG with whom I worked closely until mid April. During this time I was involved with legal and PR strategy leading up to the Court Hearing on April 9, when DAG secured the third class of depositor. I wrote drafts of several letters for Edwin Coe to send to HM Treasury Select Committee, PWC IOM, Allan Bell and John Spellman. I was involved in the appointment of Bell Pottinger and made a personal visit to present our case to Mark Hoban MP. I worked closely with Dominic Chambers QC, Edwin Coe, and Stuart Roberts in preparing our successful submission to the Court on April 9.

More recently I have focussed on a few areas that I consider important to the success of the liquidation process: i) Making senior partners in PWC London aware of the importance of high level oversight of the process; ii) encouraging Opposition MPs to write to PWC London to reinforce the importance of London oversight; iii) together with Alex Marsella, meeting with the Icelandic Ambassador to UK; iv) together with Gavin Brake, meeting with Icelandic Ministry of Finance and members of Kaupthing hf Resolution Committee in Rejkyavik.

My work experience is as follows: In 1989 I founded WILink (now PrecisionIR) a leading investor relations and communications firm, listed on AIM in 2000 and then sold to a USA based Private Equity Fund in 2006. At its peak WILink had 4,200 corporate and mutual fund clients across 14 countries in Europe and North America. Prior to this I held senior international marketing and general management positions in UK, Sweden, Japan and USA with Mars Inc and PepsiCo Inc and was a management consultant with McKinsey & Co. Inc. working for clients in UK, Denmark, Sweden and Australia. I was a founder member of the buy-out team which acquired Bricom, a business services conglomerate, from British and Commonwealth Holdings Plc in 1987 and then Divisional Director, Business Services Europe for BET Plc until its acquisition by Rentokil-Initial Plc in 1996, after which I assumed a full-time role as CEO of WILink.

Royal Skandia Life Assurance Limited

Royal Skandia is part of the Old Mutual Group and has been offering offshore insurance products on the Isle of Man since 1985. It is one of the leading offshore insurance companies offering products into the UK market and the rest of the world. After the collapse of Kaupthing Singer & Friedlander (Isle of Man) Limited Royal Skandia as one of the largest single creditors has worked with other insurance creditors, and used its position in the Isle of Man finance sector to lobby to secure the best solution for its policyholders, whilst at the same time taking account of, and trying to rationalise the position of all creditors. To this end Royal Skandia representatives have held discussions with other interested creditors when requested to ensure wherever possible interests were aligned to maximise that the return to all creditors.

18 JUNE 2009

Update on completing the Proof of Debt Form

With reference to the Proof of Debt Form, attached to the letter to creditors dated 10 June 2009, we have been asked to clarify Point 3 of the form, which asks creditors to state the:

“Total amount of claim, including any Value Added Tax and outstanding uncapitalised interest as at the date the company went into liquidation”.

Please note that this is a statutory form and, for the purposes of completing Point 3 of this form, the total amount of claim is as at the date of the commencement of the winding-up of the Company, being 9 October 2008.

Nominations for the Committee of Inspection

As referred to in Section 1.8 of the letter to creditors dated 10 June 2009, the following nominations have been received in respect of the Committee of Inspection:

Nigel Smith

I am a retail depositor with about £98,000 and $430,000 at risk and have been involved with collating questions from depositors who post queries on the Depositor Action Group website to Mike Simpson (latterly Liquidator Provisionally, now Liquidator) on bi-weekly calls. While I have not sought or hold proxy votes for other creditors, I believe that I have been involved and provided a useful function to retail depositors who are looking for specific answers and also to the LP in helping reduce the amount of similar questions directed at his offices over the last 6 months.

I am 38 years old and a Chief Marketing Officer of a large technology company based in the UK.

Axa Isle of Man Limited

AXA Isle of Man Limited is a wholly owned subsidiary of the AXA group and has been offering offshore insurance products on the Isle of Man since 1992. It is one of the leading offshore insurance companies offering products into the UK market. AXA Isle of Man Limited understands the offshore financial market and its customer base and, after the collapse of Kaupthing Singer & Friedlander (Isle of Man) Limited, has worked with other insurance creditors to secure the solution that best suited its policyholders. AXA Isle of Man Limited has also held talks with other interested creditors and freely exchanged views as to the best way forward, not always in agreement, but always with the aim of maximising the return to creditors.

Gavin Brake

Age 38. UK national, UK tax payer. Private retail depositor in KSFIOM. Currently living in Devon in the UK. Educational background – degree from Cambridge University. Professional experience as follows, 1993 – 2005: Goldman Sachs, of which 1993 – 1997 Investment Banking/Mergers & Acquisitions (in UK & US), 1997 – 2000 Equities (Capital Markets, Structured Trades, Derivatives, UK, Europe & Nordic Regions, Emerging Markets), 2000 – 2005 Financing Group (Managing Director 2004 and Joint Head of UK Financing Business for Goldman Sachs). Extensive financial and legal experience working with both major corporate client and Governments. 2005 – present: Devon (change of lifestyle/semi retired). I now own two farms in Devon, one equestrian based and one under development. Chairman of my local Parish Council. One of four trustees of a 640 acre private common land estate in my parish. Also own & manage two small private limited companies, both of which represent family businesses. Since KSFIOM went into provisional liquidation I have undertaken a number of important initiatives to further the interests of depositors including (i) travelling to Iceland to meet in person with the Finance Ministry, Chairman of the Resolution Committee and Moratorium Supervisor of Kaupthing Bank Hf, (ii) various meetings with Alan Bell, IOM Treasury Minister and other representatives of the IOMG, (iii) meetings with senior Conservative MPs and members of the Shadow Cabinet in London, (iv) instigating a group legal action on behalf of depositors with “inflight funds” to seek compensation from those parties in the UK responsible for preventing bank transfers in the week prior to provisional liquidation, (v) promoting the interests of higher value depositors though the HNW Committee of 9, of which I am one member, (vi) holding & exercising the proxy vote on behalf of higher value depositors in the recent vote against the proposed Scheme of Arrangement. I have personally funded all my activities/travel to date. In summary, I believe I have the necessary skills, relevant professional experience and can commit the time required for a role on the Committee of Inspection.

William McMurray

  • Major depositor with Kaupthing Singer & Friedlander (I.O.M)
  • Resident, Isle of Man
  • 70 years of age
  • Retired Professional Engineer C. Eng. F.I.E.E. F.I. Mech.E
  • Retired 1997
  • Business experience until retirement included Chief Executive positions with industrial corporations in U.K. , U.S.A, and associates in Europe
  • Some years prior to retirement I completed a Management Buy Out of six engineering companies which I subsequently registered with full listing on the London Stock Exchange
  • The businesses were sold in 1997 with significant premium to shareholders
  • I submit these details for depositors consideration whose interests I would hope to serve, without bias, on the proposed committee

Stuart Roberts

Commentary to be updated

Singer & Friedlander (Isle of Man) Limited Retirement Benefits Scheme

Commentary to be updated

17 JUNE 2009

Nominations for the Committee of Inspection

As referred to in Section 1.8 of the letter to creditors dated 10 June 2009, the following nominations have been received in respect of the Committee of Inspection:

Nigel Smith

I am a retail depositor with about £98,000 and $430,000 at risk and have been involved with collating questions from depositors who post queries on the Depositor Action Group website to Mike Simpson (latterly Liquidator Provisionally, now Liquidator) on bi-weekly calls. While I have not sought or hold proxy votes for other creditors, I believe that I have been involved and provided a useful function to retail depositors who are looking for specific answers and also to the LP in helping reduce the amount of similar questions directed at his offices over the last 6 months.

I am 38 years old and a Chief Marketing Officer of a large technology company based in the UK.

Axa Isle of Man Limited

AXA Isle of Man Limited is a wholly owned subsidiary of the AXA group and has been offering offshore insurance products on the Isle of Man since 1992. It is one of the leading offshore insurance companies offering products into the UK market. AXA Isle of Man Limited understands the offshore financial market and its customer base and, after the collapse of Kaupthing Singer & Friedlander (Isle of Man) Limited, has worked with other insurance creditors to secure the solution that best suited its policyholders. AXA Isle of Man Limited has also held talks with other interested creditors and freely exchanged views as to the best way forward, not always in agreement, but always with the aim of maximising the return to creditors.

Gavin Brake

Commentary to be updated

Stuart Roberts

Commentary to be updated

Singer & Friedlander (Isle of Man) Limited Retirement Benefits Scheme

Commentary to be updated

12 JUNE 2009

Update on the Liquidation Process

At a hearing in the Isle of Man High Court on Wednesday 27 May 2009, a Winding Up Order was made placing the Company into liquidation. I was appointed, along with Peter Spratt, as Joint Provisional Liquidator and Joint Deemed Official Receiver at that time.

Creditors will receive shortly a letter and attachments concerning the First Meeting of Creditors, and lodging a claim in the liquidation. A copy of this letter, and attachments including general and special proxy forms and Proof of Debt form, is attached below.

PDF

 Creditors meeting and Claim process

First Meeting of Creditors

The First Meeting of Creditors will be held at 11:00 a.m. BST on Tuesday, 7 July 2009, at Villa Marina, Harris Promenade, Douglas, Isle of Man.

If you are a creditor of the Company and have submitted a Proof of Debt prior to 12 noon BST on Friday 3 July 2009 at the offices of the Company, PO Box 197 Samuel Harris House, 5-11 St Georges Street Douglas, Isle of Man IM99 1SN, you will be entitled to vote.

Copies of Proof of Debt and proxy forms, containing a copy of original signatures, can be forwarded electronically to the Company, by email to liquidation@singers.co.im or by fax to 44(0)1624 699 200 or +44(0)1624 699 202 no later than 12 noon on Friday, 3 July 2009. These will be considered for voting purposes but creditors are asked to ensure that original forms are sent by mail to the Company’s offices as soon as possible.

First Interim Dividend to Creditors

It is the intention of the Joint Provisional Liquidators that a first interim dividend to creditors will be distributed, to those creditors with agreed claims, by 28 August 2009. Further information in this regard will be distributed to creditors and posted on this web-site in due course.

In order for you to take part in the first distribution, you must have submitted a completed Proof of Debt form by WEDNESDAY, 12 AUGUST 2009. Please return the form to the offices of the Company, PO Box 197 Samuel Harris House, 5-11 St Georges Street Douglas, Isle of Man IM99 1SN. Faxed or emailed Proof of Debts will not be accepted for proving a creditors claim in the liquidation.

In respect of joint accounts, one Proof of Debt should be submitted in the name of the Joint Account Holders. Dividend payments will be also be paid in the name of Joint Account Holders.

If individuals hold more than one account, they should still submit only one Proof of Debt but should list all of the accounts separately on the face of the Proof of Debt or as an attachment to the Proof of Debt.

Depositors Compensation Scheme

I am working with the manager of the Depositors Compensation Scheme (“DCS”) (“the Scheme Manager”) to facilitate his aim of making payments to depositors who meet DCS criteria as soon as practically possible.

I am aware that the Scheme Manager has written separately to depositors in this regard.

We are unable to assist in respect of queries or correspondence specifically in relation to the DCS and these should therefore be directed to the Scheme Manager, on the following contact details. :

Website: www.dcs.im
Recorded helpline: +44 (0) 1624 606 000
E-mail: info@dcs.im
Address: PO Box 201
Douglas
Isle of Man
IM99 1HN

01 JUNE 2009

Update on the Liquidation Process

On 27 May 2009, the Isle of Man High Court granted an Order confirming the powers of the Provisional Liquidators to issue a Notice of Intended Dividend and to call for Proof of Debts to be submitted by creditors.

The Order also confirmed that the first meeting of creditors is to be held within six weeks of the Winding Up Order. At that meeting, a report will be laid before the creditors in respect of the progress in the liquidation to date. Creditors will be invited to vote, in person or by proxy, in respect of the appointment of Peter Spratt and myself as Joint Liquidators and in respect of the membership of a Committee of Inspection.

Information will be issued shortly to all creditors, both in respect of the claims process and in respect of the arrangements for the meeting of creditors.

In the meantime the Joint Provisional Liquidators are working with the manager of the Depositors Compensation Scheme (“DCS”) to ensure that payments are made to creditors as soon as practically possible. Information on the liquidation of KSFIOM will continue to be available on this website.

Sale of Booker Group Plc Shares

On 21 May 2009, the Company lodged certain regulatory notifications confirming ownership of a substantial block of shares in Booker Group Plc. Having sought advice on the appropriate strategy with regard to the disposal of this holding and after careful consideration, the Joint Provisional Liquidators took the decision to place the shares into the market on 28 May 2009. Whilst as a result £93.5 million was realised, due to certain restrictions which were necessary to effect the sale, the funds will not be available for distribution to creditors for a period of 6 to 12 months.

27 MAY 2009

Winding up order

At the hearing in the Isle of Man High Court on 27 May 2009, the winding up order was passed in respect of Kaupthing Singer & Friedlander (Isle of Man) Limited. Peter Spratt and I were appointed Joint Provisional Liquidators and Joint Deemed Official Receivers. A copy of the Court Order will be placed on this website when it is received.

Telephone conference dial in details

A further conference call with creditors will take place on Monday 01 June 2009 4pm BST.

Once again, I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PBMK3AQR3

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs.

22 MAY 2009

Following the meetings of creditors on 19 May 2009, a report has been filed in the Isle of Man High Court today by the Joint Liquidators Provisionally confirming that the Scheme of Arrangement, as proposed by the Company and the Treasury of the Isle of Man, failed to be approved by two of the three meetings of classes of creditors.

A significant number of creditors voted on the proposal, with Forms of Voting and Proxy received from around the world. The following votes, as reported by the Chairman, have been reported to the Isle of Man High Court today:

NumberTotalValueTotal
ForAgainstForAgainst 
Class 11,9223762,29849,577,532.048,633,579.6758,211,111.71
Class 28259351,760406,222,625.41215,593,464.58621,816,089.99
Class 313114309,860.823,000,000.003,309,860.82

The Scheme of Arrangement has therefore not been sanctioned by the Scheme Creditors, as classes 2 and 3 failed to reach the required 75% in value of those present and voting for the Scheme. Class 2 also failed to achieve a majority in number of those present and voting for the Scheme.

At the next hearing in the Isle of Man High Court on 27 May 2009, the winding up petition is due to be heard and the Joint Liquidators Provisionally will support the making of a winding up order. It is anticipated the Company will be placed into liquidation on that date.

Following the hearing, and if a winding up order is granted, the Provisional Liquidators, as appointed, will focus on ensuring dividends are paid to creditors as soon as practicable. Proof of debt forms will be issued as quickly as possible to creditors to enable them to lodge their claims in the liquidation, with the aim of paying the first dividend within three months of the winding up order being granted.

Postal concerns

The Liquidators Provisionally have been contacted by a small number of creditors stating that the Scheme Documents did not arrive by post. I am disappointed that the papers did not reach all creditors shortly after posting. However, in addition to being posted, notices for the Scheme meetings were placed in the Manx and international press and the documents were all made available on this website. I would like to draw to the attention of creditors the two affidavits which confirm the printing and postage process including the fact that, where required, documents were issued by airmail. I confirm that original forms of proxy and voting were received from all over the world.

15 MAY 2009

Parental guarantee and the Scheme of Arrangement

A number of creditors have contacted me regarding the parental guarantee under the Scheme of Arrangement. I can advise that legal advice has been obtained in the Isle of Man, United Kingdom and Iceland which has confirmed the ability to claim from Kaupthing Bank hf regarding the parental guarantee is not affected by the implementation of the Scheme of Arrangement.

24 APRIL 2009

Telephone conference dial in details

The conference call with creditors originally scheduled for Friday 24 April 2009 4pm BST has been postponed at the suggestion of the Depositor’s Action Group considering the significant changes in the situation regarding Kaupthing Singer & Friedlander Limited (“KSFUK”). I apologise for any inconvenience caused.

A re-arranged conference call with creditors will take place on Friday 01 May 2009 4pm BST.

Once again, I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3CE8C6PX

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs.

17 APRIL 2009

Telephone conference dial in details

A further conference call with creditors will take place on Friday 24 April 2009 4pm BST.

Once again, I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3CE8C6PX

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs.

Scheme of Arrangement

The Scheme, the Explanatory Statement, and voting papers for the Scheme Creditor meetings will be sent to all known Scheme Creditors (as defined in the Scheme documents) in accordance with the Court Order. The documents will also be made available via the Bank’s website on the same date. Notices will be placed in the International Herald Tribune, the international edition of the Financial Times, the Financial Times, the New Zealand Herald and the Isle of Man Examiner.

A number of roadshows will also be held in the time up to the Scheme Creditor meetings on 19 May 2009, details of which will be available on the website. For further information on the timetable for the Scheme of Arrangement please see the website update of 09 April 2009.

09 APRIL 2009

Court Hearing of 9 April 2009

Following the Court hearing of 9 April 2009, the Court has issued an order to convene meetings of the creditors of Kaupthing Singer & Friedlander (Isle of Man) Limited In Liquidation Provisionally (“the Bank”, “KSFIOM” or “the Company”) for considering and, if seen fit, approving a Scheme of Arrangement (“the Scheme”) to be entered into between the Company and its Scheme Creditors (which are defined in the Scheme documents).

The purpose of this ruling is to allow the Joint Liquidators Provisionally and the Treasury to present and outline the proposed Scheme to the Scheme Creditors of the Bank. The implementation of the proposed Scheme is subject to the approval of the Scheme Creditors. For purposes of clarification, if the Scheme is not approved then the Company will be placed into liquidation.

We will be making several documents available to the Scheme Creditors to allow them to assess the proposed Scheme and make an informed decision as to whether the Scheme provides an equal if not better return to Scheme Creditors than would otherwise be achieved under a normal liquidation process.

Information for Scheme Creditors

The Joint Liquidators Provisionally will be making the following documents (“Scheme Documents”) available to Scheme Creditors: 

  • The Second Affidavit of Michael Simpson;
  • The Scheme of Arrangement; and
  • Explanatory Statement to the Scheme of Arrangement (including notices of meetings).

Timetable

Post the Court hearing of 9 April 2009, the Joint Liquidators Provisionally are required to adhere to the following timetable:

  • The various Scheme Documents are required to be issued to creditors within 10 days of the Court Hearing. This information will be sent to creditors in various forms. The Joint Liquidators Provisionally endeavour to issue this information through website updates as well as by post, by email, and through newspapers published internationally.
  • A Scheme Meeting will be held 28 days post the initial 10 day period. It is proposed that the Scheme Meeting will be held on 19 May 2009 at Villa Marina, Harris Promenade, DOUGLAS, Isle of Man, IM1 2XP. At this Scheme Meeting those Scheme Creditors attending will be asked to vote on the Scheme. Those wishing to vote need to ensure that they are present or if voting by proxy need to ensure that the Form of Voting and Proxy is returned as soon as possible, and in any event, received by 5p.m. on 15 May 2009 by the Provisional Liquidator at Kaupthing Singer & Friedlander (Isle of Man) Limited, PO Box 197, Samuel Harris House, 5-11 St. Georges Street, Douglas, Isle of Man, IM99 1SN. Further detail is provided in the Scheme Documents. There will be three classes of creditors voting: Fully Protected Creditors, Partially Protected Creditors and Unprotected Creditors, which are defined in the body of the Scheme Documents. Of those creditors voting, there is a requirement for the Scheme to receive the approval of 75 percent in value and 50 percent in number of those creditors attending (or alternatively by proxy).
  • If the Scheme is given approval by the creditors, the Scheme will be sanctioned by the Courts on 27 May 2009 and at that point become effective. This will be the Effective Date of the Scheme.
  • At this point the proposed time frame for payments to Scheme Creditors will be initiated with the First Dividend Payment to Scheme Creditors expected to be paid in 90 – 100 days from the Scheme Effective Date. This is estimated to be at the end of August 2009.
  • The Second Dividend Payment will be paid on the first anniversary of the Scheme Effective Date and the Third Dividend Payment will be paid on the second anniversary of the Scheme Effective Date.

Key Aspects of the Scheme

The key aspects of the Scheme are such that the Isle of Man Treasury has agreed to join the Scheme and be bound by its terms. The Treasury will:

  • Provide funding to enable Top-Up Payments to be made to Protected Depositors. A Fully Protected Depositor is any person with a deposit with the Company who would be entitled to receive payment under the Financial Services Act 2008 Compensation of Depositors Regulations 2008 for the full amount of the deposit held. A Partially Protected Depositor is any person with a deposit with the Company who would be entitled to receive payment for part of their deposit, up to £50,000, under the Financial Services Act 2008 Compensation Regulations 2008. The Top-Up Payments made by the Treasury will ensure that by the second anniversary of the Scheme becoming effective, each Protected Depositor will receive an amount which is at least equal to the amount which that Protected Depositor would have received pursuant to the Depositors Compensation Scheme (“DCS”) Regulations had the Company been placed into liquidation on 9 April 2009.
  • Subordinate its pre-winding up petition unsecured claim against the Company (of approximately £2,800,000).

Other key features of the Scheme are:

  • the Provisional Liquidation will continue throughout the term of the Scheme;
  • the Joint Provisional Liquidator will also act as the Scheme Supervisor;
  • the Joint Provisional Liquidator will continue to collect in and realise the assets of the Company;
  • the Scheme Supervisor will be responsible for distributing the assets of the Company to its creditors;
  • that each Scheme Creditor will, as a minimum, receive the same amount that it would have received had the Company been placed into liquidation, and compensation had been paid under the Isle of Man Treasury Depositor Compensation Scheme;
  • that any creditor who receives Top-Up Payment (as defined in the Scheme Documents) will assign its Protected Scheme Claim to the Treasury;
  • the Top-Up Payment mechanism also benefits other Scheme Creditors as the Treasury will agree in accordance with the Scheme to defer its right to receive payment on the claims assigned to it as a result of the making of the Top-Up Payments until such time when all Scheme Creditors have received a distribution of 60 pence in the pound of their Scheme Claims.

Notice of Termination of access to Edge and online Accounts

As you will be aware from previous website updates in December and January, the joint Liquidators Provisionally outlined that online access to Edge and online Accounts would be available in “READ ONLY” format and that these would remain open until the end of February. To accommodate creditors an extension was provided through March, however, going forward this service will now be terminated.

02 APRIL 2009

Kaupthing Singer & Friedlander UK Limited (In Administration) (“KSFUK”)

A number of creditors have contacted me following reports in the UK press regarding compensation being provided to certain creditors of KSFUK. KSFIOM creditors have expressed their concerns regarding these particular creditors potentially being granted preference over other creditors of KSFUK, such as KSFIOM.

It is our understanding that the Financial Services Compensation Scheme (“FSCS”) has paid compensation in full to both Mr Whelan (to allow for the purchase of the fitness clubs business from JJB plc, which will be rebranded as DW Sports Fitness) as well as deposits due to Stockcube plc. Stockcube plc has announced that its cash on deposit as well as interest due from KSFUK has been compensated by FSCS.

The joint Liquidators Provisionally wish to clarify their understanding that compensation to these parties has not been provided by KSFUK, but by the FSCS. KSFIOM cannot claim compensation from the FSCS in this regard.

Sale of JJB plc shares

The joint Liquidators Provisionally can confirm that KSFIOM has also disposed of its shareholding in JJB plc. The joint Liquidators Provisionally have no further news regarding the realisation of assets at this time.

27 MARCH 2009

Forthcoming Court Hearing on 9 April 2009

The Joint Liquidators Provisionally continue to work with the Isle of Man Treasury in helping develop its proposed Scheme of Arrangement ahead of the next court hearing on 9 April 2009.

If there is a requirement for me to submit an Affidavit into Court prior to 9 April 2009, it will be made available on the website. The Joint Liquidators Provisionally continue to protect the assets of the Bank and are engaged in the realisation of those assets for the benefit of creditors.

Telephone conference dial in details

A further conference call with creditors will take place on Monday 6 April 2009 4pm BST.

Once again, I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register

https://cossprereg.btci.com/prereg/key.process?key=PJ646DXC3

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs.

20 MARCH 2009

General Information

The Joint Liquidators Provisionally continue to work with the Isle of Man Treasury in helping develop its proposed Scheme of Arrangement.

As outlined previously, the Joint Liquidators Provisionally understand creditors seeking more information regarding the detail of the Scheme of Arrangement. However, as the Scheme of Arrangement is still being drafted it cannot be shared with creditors at this time. When this information becomes available, this information will be placed on the website. The Joint Liquidators Provisionally appreciate your continued patience in this regard.

The Joint Liquidators Provisionally would like to outline that they continue to protect the assets of the Bank and are engaged in the realisation of those assets for the benefit of creditors. There is no further news regarding the realisation of assets at this time.

Kaupthing hf

I attach a link to the Kaupthing Bank hf Creditors’ Report which has been updated (March 2009) by the Resolution Committee. The Resolution Committee do not provide any further clarification on the amount or likely timing of any payout.

Creditors’ Report

Telephone conference dial in details

Following a conference call with the Depositors Action Group which took place on Monday 9 March 2009 (and can be accessed on this website) I have set up a seventh conference call which will take place on Monday 6 April 2009 4pm BST.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PJ646DXC3

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous call on 9 March 2009 has now been made available on the KSFIOM website.

13 MARCH 2009

General Information

The Joint Liquidators Provisionally continue to work with the Isle of Man Treasury in helping develop its proposed Scheme of Arrangement.

As outlined previously, the Joint Liquidators Provisionally understand and empathise with creditors seeking more information regarding the detail of the Scheme of Arrangement. However, as the Scheme of Arrangement is still being drafted it cannot be shared with creditors at this time. When this information becomes available, this information will be placed on the website. The Joint Liquidators Provisionally appreciate your continued patience in this regard.

As outlined on the website updates of 20 February 2009 and 6 March 2009 some level of detail has been provided in relation to the Scheme of Arrangement. For the purposes of clarity, the Scheme will be presented to creditors who will then have the opportunity to vote for or against it. In order to approve the Scheme more than 50 percent in number and 75 percent in value of those voting in each class of creditors need to vote in favour.

The Joint Liquidators Provisionally would like to emphasise that they continue to protect the assets of the Bank and are engaged in the realisation of those assets for the benefit of creditors. There is no further news regarding the realisation of assets at this time.

Additional Information

As requested on the creditor conference call of Monday 9 March 2009, a breakdown of the Depositor profile is attached below. This detail provides the breakdown of the number of customers, accounts and value by five categories.

 No. of CustomersNo. of AccountsAmount (£)
Individuals5,2486,538303,391,801
Joint3,1143,937174,397,037
Company7971,242108,515,768
Trust22937217,664,124
Insurance Companies1,9701,970289,876,074
 11,35814,059893,844,804
Source: Bank Records

Telephone conference dial in details

Following a conference call with the Depositors Action Group which took place on Monday 9 March 2009, I have set up a seventh conference call which will take place on Monday 6 April 2009 4pm BST.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PJ646DXC3

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous calls are available on the KSFIOM website.

06 MARCH 2009

General Matters

As outlined previously, the Joint Liquidators Provisionally continue to work with the Isle of Man Treasury in helping develop its proposed Scheme of Arrangement.

The Joint Liquidators Provisionally understands creditors wishing to seek more information regarding the detail of the Scheme of Arrangement.

At this point, the Scheme of Arrangement is still being drafted and cannot be shared with creditors. I will provide more information on the website when this becomes available and I appreciate your continued patience in this regard.

My website update of 20 February 2009 provided some detail relating to the Scheme of Arrangement. In due course the Scheme will be presented to creditors who will then have the opportunity to vote for or against it. In order to approve the Scheme more than 50 percent in number and 75 percent in value of those voting in each class of creditors need to vote in favour.

The Joint Liquidators Provisionally continue to protect the assets of the Bank and are engaged in the realisation of those assets for the benefit of creditors. There is no further news regarding the realisation of assets at this time.

Telephone conference dial in details

Following a conference call with the Depositors Action Group which took place on Monday 23 February 2009 (and can be accessed on this website here) I have set up a sixth conference call which will take place on Monday 9 March 2009 4pm GMT.

I am making the access details generally available to creditors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3YXG8MKR

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous calls are available on the KSFIOM website.

27 FEBRUARY 2009

General Matters

Following the Court hearing of 19 February 2009, the Joint Liquidators Provisionally continue to work with the Isle of Man Treasury in helping develop its proposed Scheme of Arrangement.

The Joint Liquidators Provisionally continue to protect the assets of the Bank and are engaged in the realisation of those assets for the benefit of creditors. There is no further news regarding the realisation of assets at this time.

Telephone conference dial in details

Following a conference call with the Depositors Action Group which took place on Monday 23 February 2009 (and can be accessed on this website here) I have set up a sixth conference call which will take place on Monday 9 March 2009 4pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3YXG8MKR

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous calls are available on the KSFIOM website.

Isle of Man Treasury Website

As requested by various creditors, please find further information in relation to the Early Payment Scheme being operated by the Isle of Man Treasury by accessing the website at www.gov.im then click “Banking Updates”.

Any queries relating to the Early Payment Scheme should be directed to the Isle of Man Treasury. A dedicated helpline has been set up on +44(0)1624 685 858 and email queries should be sent to ksfdepositors@gov.im.

20 FEBRUARY 2009

This update follows the Court hearing held on Thursday 19 February 2009 and provides further information requested by creditors relating to both the Scheme of Arrangement as well as an overview of the possible outcome of the maturity of the loan book over time.

Court hearing on 19 February 2009

In preparation for the Court hearing on 19 February 2009, I submitted a third Affidavit dated 18 February 2009 which responded to some of the comments made in the fourth Affidavit submitted by Mr David Lovett of Alix Partners and the third Affidavit submitted by Mr Allan Bell, Isle of Man Treasury Minister, on 12 February 2009. My most recent Affidavit is now available for viewing on the website here. Once again, I wish to emphasise that my principal concern as Liquidator Provisionally is to protect the interests of all creditors, be that through the liquidation of the Company or by a Scheme of Arrangement.

Following the Court hearing, the Court has ordered an adjournment of the hearing of the winding up petition for 49 days until Thursday 9 April 2009 to allow the Treasury to prepare the Scheme of Arrangement.

A signed transcript of the Judgment by Deputy Deemster Corlett will be placed on the website as soon as it is received.

Timetable for Scheme of Arrangement

The timetable as proposed by Treasury is detailed below. Additional comments (as highlighted in square brackets) are to assist creditors’ understanding.

ItemActionWhen
1· Resolve all outstanding legal issues
· Draft: (i) Scheme Document, (ii) Explanatory Statement, (iii) Proxy Forms, (iv) Notices, (v) Claim Forms, (vi) Petition, and (vii) Affidavit(s) in Support 
· Resolve position with Banks and draft underlying participation agreement
· Obtain Tynwald conditional amendment to DCS
1 February to 23 March
2File Petition and Evidence in SupportWeek commencing 30 March
3Ex Parte Hearing for Directions to Call Scheme Meeting [Leave to convene the meeting of creditors – Court date 9 April 2009.]Week commencing 6 April
4Notices of Scheme Meeting to be sent to Creditors [Creditor road shows would be held in this period.]Week commencing 13 April
5Adjudication of claim forms for voting purposes 
6Record Date [This will be the date (if applicable) at which currency conversion will take place as well interest and set off applied.]Week commencing 11 May (shortly prior to Scheme Meeting)
7Scheme Meeting [Meetings of creditors to vote on Scheme of Arrangement. In order to approve the Scheme more than 50 percent in number and 75 percent in value of those voting in each class of creditors need to vote in favour.]Week commencing 11 May
8Draft and file Affidavit reporting on outcome of Scheme MeetingWeek commencing 18 May
9Sanction Hearing [If approved by creditors (in the meeting of creditors), the Court has the power, if it believes the Scheme to be in the interests of all creditors, to sanction the Scheme.]Week commencing 25 May
10File Court Order at FSC – Scheme takes effect [Following the effective date the Scheme Administrator will be in a position to agree claims.]Week commencing 25 May (immediately following sanction)
11First Dividend/Lump Sum payment [the date at which the first dividends/creditors claims may be paid].July/August

Possible maturity of the Loan Book

As requested by a number of creditors, below I have outlined a possible timeline for the maturity of the loan book. The estimate has been based on a number of factors, which are by no means certain at this time, and the numbers below cannot be taken as the likely realisation of such assets.

Kaupthing Singer & Friedlander (Isle of Man) Limited 
– In Liquidation Provisionally  
Loan book scheduled repayments 
– see notes  
Year  Scheduled repayment (£’000)  
200960,787
201032,728
2011147,471
2012109,419
Post 201355,058
Total repayments405,463

Notes:

  1. This data has been provided to creditors for information purposes only and should not be used for any other intention other than its intended purpose.
  2. The information is based on Company records provided.
  3. Exchange rates as at 8 October 2008 are assumed.
  4. No estimate has been provided for possible loan defaults.
  5. Only capital repayment schedules have been taken into account (interest payments, which will vary, have not been accounted for at this point).

Telephone conference dial in details

Following discussions with the Depositors Action Group I have set up a fifth conference call which will take place on Monday 23 February 2009 4:00 pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PYYLYQ7NK

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous call on 9 February 2009 has now been made available on the KSFIOM website.

13 FEBRUARY 2009

This update follows my attendance at the Kaupthing hf creditors’ meeting.

Kaupthing hf

I attended the creditors meeting in Iceland on 5 February 2009 I attach a copy of the report which was prepared for that meeting. The Resolution Committee were unable to give any indication of how much would be distributed to creditors or when. Whilst I will continue to pursue the balance owed by Kaupthing hf and will make a claim under the parental guarantee at the appropriate time, I do not expect a significant recovery. Further creditor information is available on the website www.kaupthing.com.

PDF

 Kaupthing hf Creditors’ Report 5 Feb 09

Court hearing on 19 February 2009

I continue my discussions with the Treasury regarding the proposed Scheme of Arrangement ahead of the Court hearing on 19 February. If there is a requirement for me to submit an affidavit into Court prior to 19 February, it will be made available on the website.

Telephone conference dial in details

Following discussions with the Depositors Action Group I have set up a fifth conference call which will take place on Monday 23 February 2009 4:00 pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PYYLYQ7NK

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous call on 9 February 2009 has now been made available on the KSFIOM website.

International post

In order to mitigate the risk of fraud, depositor updates will not be sent by post to Botswana, Kenya, South Africa or Zimbabwe. I will seek to distribute updates to depositors in these countries by email or fax. However where depositors do not have access to email or fax these documents will be sent by post upon their request.

30 JANUARY 2009

This update follows yesterday’s Court hearing on the winding up petition and the telephone conference calls with creditors, as discussed with the Depositors Action Group.

Court hearing

In preparation for the Court Hearing on 29 January 2009, I submitted a further Affidavit dated 28 January 2009 which responded to some of the comments made in the Affidavit submitted by Mr Lovatt of AlixPartners to the Court on 26 January 2009. My further Affidavit is now available for viewing on the website here. I can only emphasise that my principal concern is that the best interests of creditors are served, whether this is through a liquidation of the Company or by a Scheme of Arrangement.

Following the hearing, the Court has ordered a further adjournment of the hearing of the winding up petition for 21 days until 19th February 2009, with Affidavits to be filed by the Treasury addressing certain issues referred to by Deputy Deemster Corlett and to be served on the other Noticed Parties by 12 February 2009.

I am seeking confirmation as to whether a transcript of the Judgment by Deputy Deemster Corlett can be placed on the website and hope to be in a position to provide this early next week.

Provision of further information regarding the Company’s assets

Since the submission of my Affidavit to Court, I can confirm that a further amount of £2m has been realised in respect of the CD’s. The remaining CD’s, totalling £35m are, as indicated previously, subject to ongoing legal disputes with regard to set-off and are in the hands of lawyers.

At the Court hearing, a request was made on behalf of certain creditors for further information to be provided. It was explained to the Court that I am constrained in the amount of information I can share with creditors due to issues of commercial sensitivity and legal privilege.

The only area where I feel that I may be able to share some further information is in respect of the make up of the loan book and its maturity profile. I will be seeking to provide further information on the website at the end of next week in this regard but would stress that this will represent the extent of the information I can provide.

Telephone conference dial in details

Following discussions with the Depositors Action Group I have set up a fourth conference call which will take place on Monday 9 February 2009 4:00 pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3HVQPLJR

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recording from the previous call on 12 December 2008 has now been made available on the KSFIOM website.

23 JANUARY 2009

This update covers the forthcoming Court hearing and the telephone conferences with the Depositors Action Group.

Forthcoming Court Hearing on 29 January 2009

In preparation for the Court Hearing on 29 January 2009, I have submitted an Affidavit dated 21 January 2009 which, amongst other items, will contain an estimate of the assets and liabilities of Kaupthing Singer & Friedlander (Isle of Man) Ltd as at 9 October 2008. The Affidavit is now available for viewing here.

We understand that a further Affidavit will be submitted by the Isle of Man Treasury early next week, prior to the Court Hearing.

Telephone conference dial in details

Following discussions with the Depositors Action Group I have set up a second conference call which will take place on Monday 26 January 2009 4:00 pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PXUFB9G4D

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen, it will significantly reduce the costs. The audio recordings from the previous calls are available here.

16 JANUARY 2009

This update covers the forthcoming Court hearing, the JJB Sports plc shareholding, the Early Payment Scheme being offered by the Isle of Man Treasury, the issuing of statements and a potential website fraud.

I also draw your attention to the details of my next conference call posted at the end of this update.

Forthcoming Court Hearing on 29 January 2009

In preparation for the Court Hearing on 29 January 2009, I will be submitting an Affidavit which will contain an update in respect of the Liquidation Provisionally and will contain an estimate of the assets and liabilities of Kaupthing Singer & Friedlander (Isle of Man) Ltd (“KSFIOM”) as at 9 October 2008. I would stress however that this should not be taken as an estimate of what may be realised in due course in respect of the assets, nor in respect of the potential total liabilities of KSFIOM as there continue to be a number of uncertainties in respect of certain assets and as Liquidators Provisionally we are not in a position to start the formal process of calling for claims. A copy of my Affidavit will be available on the website once it has been lodged with Court.

JJB Sports plc Shareholding

Prior to the appointment of Joint Liquidators Provisionally on 9 October 2008, KSFIOM had entered into arrangements with Kaupthing Singer & Friedlander Ltd (“KSF UK”) which were backed by collateral arrangements. Following the termination of those agreements, KSFIOM obtained rights to certain shares which had been lodged as collateral. One of these shareholdings is in JJB Sports plc.

As a result, KSFIOM believes it has an obligation to lodge certain regulatory notifications confirming ownership of the relevant listed shares. In a press release issued on 14 January 2009 I was quoted as saying:

“In respect of the JJB Sports plc shares, I will be taking a careful and considered approach in respect of the collateral shares, particularly given the material size of the shareholding. I have and continue to take advice in this regard. I would stress that there is no requirement for me to dispose of these positions within a set timeframe or in a time pressured manner and that my role is to optimise the recovery for creditors.”

Early Payment Scheme from the Isle of Man Treasury

The Isle of Man Treasury has sought approval from Tynwald for making a payment to depositors of £1000. The Treasury requested that we send a claim form to all customers on their behalf so that depositors can arrange for them to be completed and returned.

If you have any queries relating to this Early Payment Scheme, a dedicated helpline has been set up by the Isle of Man Treasury which you can reach on +44(0)1624 685 858.

Edge and Online accounts

As stated in my last update, the Edge and online accounts are available in a “READ ONLY” format. Online access will remain open until the end of February 2009.

Statements

We have issued statements outlining balances as at 9 October 2008. Accompanying these statements was a letter explaining the treatment on certain accounts such as fixed term deposits, which was also explained in a prior update. Please note that statements to South Africa, Zambia, Nigeria, Botswana, Zimbabwe and Libya have been sent via e-mail as well as by normal post services due to inconsistencies in the post services operating in those countries.

Together with the statements we sent an information sheet to customers requesting confirmation of their details, this is in addition to the form referred to above as it is to ensure that the Bank’s current information is up to date and accurate. The form also enables customers to confirm alternative bank account details for any future payments which could be made electronically.

Website Fraud

I would draw your attention to any correspondence you may receive from Kristen Heather Investment plc which appears to have cloned, without authority, the KSF website. We understand that this company is purporting to hold funds on account for the benefit of depositors which will only be released following the payment of a “release of funds fee.” This appears to be an entirely fraudulent endeavour and the Isle of Man Financial Supervision Commission (the “FSC”) has issued guidance to the effect that any communications from Kristen Heather Investment plc or the corresponding website www.ladbonline should be disregarded.

Any persons who have already been involved in dealing with the entity and have concerns should contact the Enforcement Division of the FSC on +44(0)1624 689 311.

Clarification of question raised in the conference call on 12 January 2009-01-16

The question was raised as to how the Financial Services Compensation Scheme (“FSCS”) ranks as a creditor in the Administration of the Kaupthing UK. It is my understanding that the FSCS rank “pari passu” with all other creditors, that is to say, they rank equally alongside other creditors, with no preference given.

Telephone conference dial in details

Following discussions with the Depositors Action Group I have set up a third conference call which will take place on Monday 26 January 2009 4:00 pm GMT.

I am making the access details generally available to depositors. If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=PXUFB9G4D

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head for usage. Should any party register and then not attend the liquidation will be charged.

The number of lines is limited and I would request that only those depositors who are able to make the call register as we will make the audio recording of the call available on the website for those of you who are unable to attend. Should depositors choose this route to listen it will significantly reduce the costs.

07 JANUARY 2009

Telephone conference dial in details for 12 January 2009

A further conference call with the Depositors Action Group has been scheduled for 12 January 2009 at 4.00 pm GMT.

If you wish to listen to the call, you will need to register in advance. Please click the link to register.

https://cossprereg.btci.com/prereg/key.process?key=P3BC93BBV

Participation will be on a listen only basis. The facility is provided by a third party and accordingly there is a cost per head charge for usage. Should any party register and then not attend the liquidation will still be charged.

The lines are limited and I would request that only those depositors who are able to make the call register. An audio recording of the call will be available on the website for those of you who are unable to attend.

Interim Payment from the Isle of Man Treasury

Forms have been sent to all depositors in relation to the Early Payment Scheme. Any queries should be directed to the hotline provided by the Treasury on +44 (0)1624 685858.

Information has also been provided by the Isle of Man Treasury at http://www.gov.im/cso/faq_gfs.xml

Edge and online Accounts

Online access is available in “READ ONLY” format and will remain open until the end of February 2009.

Statements

Statements as at 9 October 2008 were issued immediately prior to 25 December 2008. A letter explaining the treatment on certain accounts, such as fixed term deposits, accompanied the statements.

A “Client data and payment details update” form was included requesting confirmation of account holder details and a request for bank account details for the receipt of future distributions which may be made electronically.