2013 Updates

20 DECEMBER 2013

Cash Position

Attached is the summary of cash balances held at 30 November 2013.

 Cash Position

Cash balances increased by approximately £0.2 million during the month. Capital, interest and other income was approximately £0.1 million.  Catch-up distributions were approximately £3,000.  Costs awarded against legal expenses and a VAT rebate decreased overall expenses to a gain of £0.1 million. 

Loan Book

Attached is the summary of the loan book position at 30 November 2013.

 Loan Book

During November 2013, no facilities were redeemed in full or in part.     

The loan tables shown have been converted to Sterling using exchange rates as at 29 November 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 30 November 2013, and we have calculated that they would add a further £0.5 million to the value of the receipts due on these loans.

18 NOVEMBER 2013

Cash Position

Attached is the summary of cash balances held at 31 October 2013.

 Cash Position

Cash balances increased by approximately £0.2 million during the month. Capital, interest and other income was approximately £0.2 million.  Catch-up distributions were approximately £9,000 and other expenses were approximately £20,000. 

Loan Book

Attached is the summary of the loan book position at 31 October 2013.

 Loan Book

During October 2013, one facility was redeemed in part realising £0.2 million overall.     

The loan tables shown have been converted to Sterling using exchange rates as at 31 October 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 October 2013, and we have calculated that they would add a further £0.4 million to the value of the receipts due on these loans. 

14 OCTOBER 2013

Cash Position 

Attached is the summary of cash balances held at 30 September 2013.

 Cash Position

Cash balances decreased by approximately £5.9 million during the month. There were no repayments of capital or interest on the loans during the month. Catch-up distributions were £5.9 million and other expenses were approximately £13,000. 

Loan Book

Attached is the summary of the loan book position at 30 September 2013.

 Loan Book

During September 2013, no facilities were redeemed either in full or in part.     

The loan tables shown have been converted to Sterling using exchange rates as at 30 September 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 30 September 2013, and we have calculated that they would add a further £0.5 million to the value of the receipts due on these loans. 

11 SEPTEMBER 2013

Cash Position

Attached is the summary of cash balances held at 31 August 2013.

 Cash Position

Cash balances decreased by approximately £0.1 million during the month. There were no repayments of capital or interest on the loans during the month. Catch-up distributions and other expenses were approximately £0.1 million. 

Loan Book

Attached is the summary of the loan book position at 31 August 2013.

 Loan Book

During August 2013, no facilities were redeemed either in full or in part.     

The loan tables shown have been converted to Sterling using exchange rates as at 30 August 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 August 2013, and we have calculated that they would add a further £0.4 million to the value of the receipts due on these loans. 

2 SEPTEMBER 2013

Report to Creditors

Attached is a Report to Creditors for the period from 10 January 2013 to 9 July 2013.

 Report to Creditors

16 AUGUST 2013

Cash Position

Attached is the summary of cash balances held at 31 July 2013.

 Cash Position

Cash balances increased by approximately £3.3 million during the month. Loan interest and other income totalled approximately £4.9 million. Catch-up distributions were approximately £0.6 million. Expenses were approximately £1.0 million.

Loan Book

Attached is the summary of the loan book position at 31 July 2013.

 Loan Book

During July 2013, three facilities were redeemed in full and one in part raising £4.2 million.    

The loan tables shown have been converted to Sterling using exchange rates as at 31 July 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 July 2013, and we have calculated that they would add a further £0.3 million to the value of the receipts due on these loans. 

Report to Creditors

The Report to Creditors for the period 10 January 2013 to 9 July 2013 is nearing completion and will be published shortly.

19 JULY 2013

Cash Position

Attached is the summary of cash balances held at 30 June 2013.

 Cash Position

Cash balances decreased by approximately £34.6 million during the month. Loan interest and other income totalled approximately £16,000. Dividend receipts were approximately £7.4m. The eighth dividend as well as some catch up distributions were approximately £41.9 million.   Expenses were approximately £49,000.

Loan Book

Attached is the summary of the loan book position at 30 June 2013.

 Loan Book

During June 2013, no facilities were redeemed in full or in part.     

The loan tables shown have been converted to Sterling using exchange rates as at 28 June 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 28 June 2013, and we have calculated that they would add a further £0.4 million to the value of the receipts due on these loans. 

13 JUNE 2013

Cash Position

Attached is the summary of cash balances held at 31 May 2013.

 Cash Position

Cash balances increased by approximately £0.4 million during the month. Loan repayments, interest and other income totalled approximately £0.4 million. Expenses were approximately £3,000.

Loan Book

Attached is the summary of the loan book position at 31 May 2013.

 Loan Book

During May 2013, one facility was redeemed in part realising £0.2 million overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 31 May 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 May 2013, and we have calculated that they would add a further £0.4 million to the value of the receipts due on these loans. 

Eighth Distribution

The Joint Liquidators are pleased to announce that an eighth distribution of 4.8 pence in the £ will be paid on 28 June 2013 to all creditors whose claims have been agreed. This will bring the total distributions to date to 95.8 pence in the £.

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 to the liquidation as soon as possible so that they can receive the distributions to which they are entitled. The Manager of the Depositors Compensation Scheme has stated that no new claims are being accepted by the DCS since 27 November 2010. Further details can be found at www.dcs.im.

10 MAY 2013

Cash Position

Attached is the summary of cash balances held at 30 April 2013.

  Cash Position

Cash balances increased by approximately £2.2 million during the month. Loan repayments, interest and other income totalled approximately £2.2 million. Expenses were approximately £20,000.

Loan Book

Attached is the summary of the loan book position at 30 April 2013.

 Loan Book

During April 2013, one facility was redeemed in full and two facilities were redeemed in part realising £2.2 million overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 30 April 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 30 April 2013, and we have calculated that they would add a further £0.5 million to the value of the receipts due on these loans. 

Next Dividend

Attached below is a copy of the notice for the next dividend which has been published in the press and sent to all known creditors who have not yet submitted a claim. 

 Notice of eighth dividend

In accordance with the advertisement, creditors who have not yet submitted a Proof of Debt form are required to return the completed form to the Joint Liquidators prior to 21 May 2013 in order to be included in the eighth dividend.

For claimants with an admitted claim directly in the liquidation, if you wish to change the bank account details for payment of your dividends please contact the bank prior to 28 May 2013.  Any request for a change in payment details after this date may result in a delay to the payment of the eighth dividend to you.  The Joint Liquidators will only change a claimant’s payment details upon receipt of an original, signed document – photocopied, faxed or scanned documents will not be accepted.

As previously advised, dividend levels can only be determined once cash has been received.  We will distribute as much cash as is available at the point of declaration, which based on cash currently in hand will be not less than 4p in the £.

11 APRIL 2013

Cash Position

Attached is the summary of cash balances held at 31 March 2013.

 Cash Position

Cash balances increased by approximately £0.1 million during the month. Loan repayments, interest and other income totalled approximately £0.1 million. Expenses were approximately £14,000.

Loan Book

Attached is the summary of the loan book position at 31 March 2013

 Loan Book

During March 2013, two facilities were redeemed in part realising £12,000 overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 28 March 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 28 March 2013, and we have calculated that they would add a further £0.5 million to the value of the receipts due on these loans.

13 MARCH 2013

Cash Position

Attached is the summary of cash balances held at 28 February 2013.

 Cash Position

Cash balances increased by approximately £0.6 million during the month. Loan repayments, interest and other income totalled approximately £0.6 million. Distributions and expenses were approximately £15,000.

Loan Book

Attached is the summary of the loan book position at 28 February 2013.

 Loan Book

During February 2013, two facilities were redeemed in part realising £0.2 million overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 28 February 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 28 February 2013, and we have calculated that they would add a further £0.5 million to the value of the receipts due on these loans.  A Sterling option purchased to hedge a future US dollar receipt was matched against the relevant loan included in the summary at 28 February 2013, and we have calculated that it would add £Nil to the value of the receipt due on this loan.

21 FEBRUARY 2013

Report to Creditors

Attached is a Report to Creditors for the period from 10 July 2012 to 9 January 2013.

 Report to Creditors

11 FEBRUARY 2013

Cash Position 

Attached is the summary of cash balances held at 31 January 2013.

 Cash Position

Cash balances increased by approximately £4.5 million during the month. Loan repayments, interest and other income totalled approximately £4.5 million. Distributions and expenses were approximately £6,500.

Loan Book

Attached is the summary of the loan book position at 31 January 2013.

 Loan Book

During January 2013, three facilities were redeemed in full and two in part realising £4.4 million overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 31 January 2013.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 January 2013, and we have calculated that they would add a further £585,000 to the value of the receipts due on these loans.  A Sterling option purchased to hedge a future US dollar receipt was matched against the relevant loan included in the summary at 31 January 2013, and we have calculated that it would add £303 to the value of the receipt due on this loan.

18 JANUARY 2013

Calculation of interest payments to creditors in the event that payments exceed 100%

Our current expectation for the final outcome for creditors is that it will be in the range of 97.2% to 99%. However, as the potential exists for the outcome to exceed 100%, the Committee of Inspection asked us to outline how interest would be calculated and prioritised should 100% be exceeded.

The rules for calculating interest in an Isle of Man insolvent liquidation are not straightforward and rely on the application of the 1892 Bankruptcy Code and the 1934 Winding Up Rules. Creditors who were due contractual interest up to 8 October 2008 have had it applied to their claims (as it was applied to their bank accounts), capped at 5%. The sequence from then on would be as follows:

1.  Creditors who were entitled to contractual interest in excess of 5% per annum would receive the amount due in excess of 5% per annum up to 8 October 2008 (Bankruptcy Code Sec 23(3)). This amounts to around £3.5m.

2.  Creditors who were not entitled to contractual interest would receive 4% per annum on amounts owed to 8 October 2008 (Winding Up Rules, Rule 78). This amount would be small as the relevant creditors are typically trade creditors, the total value of such claims is low and trade creditors were not generally outstanding for long before 8 October 2008.

3.  Once the above two steps have been completed, all creditors will have received all their interest entitlements up to 8 October 2008.

There are some issues which would need to be addressed if we were to reach step 3, which would be at approximately 100.4%. The position is not totally clear and we would need to seek directions from the Court.

The financial implications of step 3 are pretty straightforward: all creditors would receive interest at 4% per annum on amounts proved (Bankruptcy Code Dec 23(4)). The advice we have received indicates that this is calculated based on the amount accepted in the proofs of debt and is not adjusted for the timing of payment of distributions to individual creditors. Paying this interest to creditors could amount to up to £36.2m per annum, but would of course be limited by the extent to which cash was available.

The implementation process of step 3 is uncertain and potentially costly. It will need Court guidance:

  • It would need to be clarified whether the interest would be applied based purely on the amount accepted for proof, or whether it should be adjusted to take account of the timing of dividend payments. This could make a significant difference to some creditors and also to the amount of work which would need to be performed to calculate the payments.
  • It would need to be determined whether interest in respect of the EPS and DCS would have to be paid to the EPS and DCS or directly to creditors. Our current understanding is that interest in respect of EPS claims should be made directly to the creditors, whilst interest in respect of DCS claims should be paid to the DCS for onward payment. This is because, in the case of the DCS claims, it is the DCS which has submitted a proof of debt in the liquidation, therefore the DCS is the creditor and is entitled to interest, whereas in the case of the EPS, it is the depositors themselves who are the creditors and have submitted proofs of debt in the liquidation and are therefore entitled to interest. It is our understanding that any interest paid to the DCS would be passed on to DCS claimants. The position is further complicated where depositors claimed in both the DCS and EPS.
  • If it was determined that interest payments in respect of the DCS claim had to be paid by us directly to DCS claimants, that would create a significant administrative burden and cost for the creditors, as we would have to calculate and process several thousand individual payments to individuals whose payment details we do not currently possess.

We do not propose to go to Court until such time as it becomes clear that dividends will exceed 100%.

11 JANUARY 2013

Cash Position 

Attached is the summary of cash balances held at 31 December 2012.

  Cash Position

Cash balances increased by approximately £1.90 million during the month. Loan repayments, interest and other income totalled approximately £1.95 million. Catch-up distributions and expenses were approximately £0.05 million.

Loan Book

Attached is the summary of the loan book position at 31 December 2012.

 Loan Book

During December 2012, two facilities were redeemed in full and one in part realising £1.9 million overall.   

The loan tables shown have been converted to Sterling using exchange rates as at 31 December 2012.

The Joint Liquidators have purchased currency options to hedge certain of the future loan receipts.  Sterling options purchased to hedge future Euro receipts were matched against the relevant loans included in the summary at 31 December 2012, and we have calculated that they would add a further £1.1 million to the value of the receipts due on these loans.  A Sterling option purchased to hedge a future US dollar receipt was matched against the relevant loan included in the summary at 31 December 2012, and we have calculated that it would add £630 to the value of the receipt due on this loan.