Statutory Interest

Further to the previous update on 5 October 2018, there was a hearing at the Isle of Man High Court on 30 October 2018 to consider matters relating to statutory interest. The Court Order issued following the hearing is attached.

Click here for Court Order

The Order instructs the Liquidator to pay statutory interest and/or deferred interest due to all depositors who claimed in the DCS and/or the EPS to the DCS, and statutory and/or deferred interest to all creditors who did not claim in the DCS or the EPS to those creditors. Regarding life insurance bondholders who claimed in the EPS, the Liquidator shall pay statutory interest direct to the insurance companies apart from amounts due to the Isle of Man Treasury in respect of it’s admitted proof of debt in respect of assignments made to it as set out in section 40 of the skeleton argument filed in support of the Liquidator’s application to the High Court and published on this website on 15 August 2018,

We will proceed to finalise the calculation of the final dividend (comprising deferred and statutory interest) and will announce a date for payment as soon as possible.

Cash balances decreased by approximately £151,000 during the quarter. Interest received totalled £21,000. Dividends paid totalled £114,000. Legal expenses totalled £47,000. Other liquidation expenses totalled £11,000.

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Cash Position

Attached is the summary of cash balances held at 30 September 2018.

Cash balances decreased by approximately £151,000 during the quarter. Interest received totalled £21,000. Dividends paid totalled £114,000. Legal expenses totalled £47,000. Other liquidation expenses totalled £11,000.

Statutory Interest

As previously advised, there will be a hearing at the Isle of Man High Court on 30 October 2018 to consider matters relating to statutory interest. There will be a further announcement on this website once the Court’s judgment has been received. Once the decision of the Court is known, it should also be possible to set out the timetable for the final distribution and the completion of the liquidation.

Click here for Cash position

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Report to Creditors

Attached is a Report to Creditors for the period from 10 January 2018 to 9 July 2018.

Click here for Report to Creditors

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Notice to Unsecured Creditors regarding Statutory Interest

Creditors of KSFIOM who have proved their debts have now received distributions equating to 100p in the pound.

Limited surplus assets remain in the liquidation of KSFIOM, from which statutory interest can be paid to its unsecured creditors. A direction that Section 23(4) of the Bankruptcy Code 1892 applies to the payment of statutory interest to unsecured creditors in the liquidation of KSFIOM was issued by His Honour Deemster Corlett in the Isle of Man High Court on 16 June 2017 and published on this website on 28 June 2017.

However, a number of unsecured creditors of KSFIOM claimed in the Early Payment Scheme and/or the Early Payment (No. 2) Scheme (collectively “the EPS”) administered by the Isle of Man Treasury and/or in the Depositors Compensation Scheme (“DCS”) managed by the Isle of Man Financial Services Authority.

In return for payments from the EPS and/or the DCS such unsecured creditors assigned their rights to prove in the liquidation of KSFIOM to the Treasury and/or the DCS.

The Liquidator has made an Application to the Isle of Man High Court dated 3 July 2018 (“the Application”), seeking directions that he should pay statutory interest to the DCS in respect of unsecured creditors who assigned to the Treasury and/or the DCS their right to prove in the liquidation of KSFIOM in return for EPS/DCS payments.

A copy of the Application as filed with the Isle of Man High Court is attached below, together with the following supporting documents:

  1. the Witness Statement of the Liquidator dated 3 July 2018, with exhibits
  2. the Skeleton Argument filed on behalf of the Liquidator in support of the Liquidator’s Application (please note that copies of the authorities referred to in the Skeleton Argument are not attached, but can be provided upon request).

The directions sought from the Court by the Liquidator with regard to the payment of statutory interest, and the assignments of the right to prove in the liquidation of KSFIOM made to the Treasury and the DCS, are set out at paragraph 1.1 to 1.1.1.4 in the Application.

At a hearing before His Honour Deemster Corlett held on 1 August 2018 the Deemster gave a direction that the unsecured creditors of KSFIOM should be given notice of the Application by placing a copy of it upon the KSFIOM website, together with the Witness Statement and Skeleton Argument, and that any unsecured creditor of KSFIOM who wishes to be made a defendant to the Application could apply to do so, provided that they file with the Court an application to be made a defendant to the Application by 4pm on 24 September 2018. Thereafter, any unsecured creditor who has applied to be made a defendant must file a defence, any witness statement upon which they wish to rely and their Skeleton Argument, within the timetable set out at paragraphs 3 to 6 of the Deemster’s order, a copy of which is also attached below. The Application has been listed for hearing at 10.00am on 30 October 2018, when one day has been set aside for the hearing.

Click here for Court Order 1 August 2018

Click here for Application Notice

Click here for Skeleton Argument

Click here for Witness statement

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Cut-Off date fixed for claiming in the liquidation

The cut-off date by which creditors in KSFIOM (including depositors who have not claimed in the Depositors’ Compensation Scheme) must prove their debts in the liquidation of KSFIOM has now been fixed by the Isle of Man High Court as 16 November 2018.

A copy of the Order of Court dated 10 July 2018 is attached below, and the attention of creditors is particularly directed to Schedule 1 of the Order.

Creditors who have already had their proof of debt admitted by the Liquidator do not need to do anything further.

However, creditors who have not yet proved their debts need to take urgent steps to do so, because if their proofs of debt are not admitted by 16 November 2018 they will be forever excluded from sharing in the dividends paid to creditors from the assets of KSFIOM recovered by the Liquidator.

It is emphasised that in order to have their proof of debt admitted by 16 November 2018, creditors must file their proof of debt with the Liquidator, at the address set out below, by 5 September 2018.

The reason that proofs of debt must be filed by 5 September 2018 is that if a proof of debt is not admitted by the Liquidator, then the creditor has a right to appeal against the Liquidator’s decision to the High Court of Justice of the Isle of Man under Rule 85 of the Companies (Winding-Up) Rules 1934, but any appeal must be lodged within 28 days of the decision of the Liquidator to reject the proof of debt.

The effect of this is that if a creditor wishes to prove their debt by the cut-off date on 16 November 2018, they must have filed their proof of debt with the Liquidator by 5 September 2018, in order for any appeal process to have concluded if the Liquidator should reject the proof of debt.

With regard to creditors who have filed a proof of debt which has not yet been accepted by the Liquidator, because the Liquidator has requested further information or evidence, such information or evidence should also be supplied by 5 September 2018, to enable the Liquidator to decide whether to admit the proof of debt in the light of the further information and/or evidence, and to allow the creditor sufficient time to appeal if the Liquidator decides not to admit the proof of debt.

A specimen proof of debt form is also attached below.

Click here for Court Order

Click here for Proof of Debt

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Cash Position

Attached is the summary of cash balances held at 30 June 2018.

Cash balances increased by approximately £3,000 during the quarter. Loan related fees received totalled £38,000. Legal expenses totalled £12,000. Other liquidation expenses totalled £23,000.

Click here for Cash Position

Final date for proving claims

An announcement will be made on this website in the next few days regarding the final dates for the submission and agreement of claims in the liquidation.

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Cash Position

Attached is the summary of cash balances held at 31 March 2018.

Cash balances decreased by approximately £149,000 during the quarter. Income totalled £12,000. Legal expenses totalled £153,000. Other liquidation expenses totalled £8,000.

Click here for Cash Position

Finalisation of Claims

I have recently rejected approximately 100 claims which were considered to be invalid. The time for those claimants to object to the rejection of their claims has now passed. I will shortly be applying to Court to set a final date for proving – this will be the final deadline after which no further claims will be considered. The relevant notice will be advertised and posted on the website. Once this deadline has passed, we will begin the process to pay out the final distribution.

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Report to Creditors

Attached is a Report to Creditors for the period from 10 July 2017 to 9 January 2018.

Click here for Report to Creditors

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Cash Position

Attached is the summary of cash balances held at 31 December 2017.

Cash balances increased by approximately £4,237,000 during the quarter. Loan interest and repayments totalled £4,063,000. Other income totalled £283,000. Legal expenses totalled £78,000. Other liquidation expenses totalled £31,000.

Click here for Cash Position

Loan Book

Attached is the summary of the loan book position at 31 December 2017.

During the quarter to December 2017, the final remaining loan was repaid in full. The loan tables shown have been converted to Sterling using exchange rates as at 31 December 2017.

Click here for Loan Book

Finalisation of the liquidation

Now that the final outstanding loan has been repaid, the only potential further assets are legal claims. I am consulting with lawyers on the merits of continuing those claims, which will need to be determined before bringing the liquidation to a close. I will explain more and set out details of the process in the next six monthly report to creditors which will be prepared shortly.

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator

Cash Position

Attached is the summary of cash balances held at 30 September 2017.

Cash balances decreased by approximately £95,000 during the quarter. Loan interest and other income totalled £13,000. Catch-up dividends were £0. Liquidator’s fees were £50,000 and other liquidation expenses were £58,000.

Click here for Cash Position

Loan Book

Attached is the summary of the loan book position at 30 September 2017.

There were no redemptions in the loan book during the quarter to September 2017. The loan tables shown have been converted to Sterling using exchange rates as at 30 September 2017.

Click here for Loan Book

Contacts

The best way to make contact is to write to the bank at PO Box 197, Third Floor, Sixty Circular Road, Douglas, Isle of Man, IM99 1SN, or email ksf@iom.pwc.com . If you need to telephone the bank, please use the number +44 1624 699222. All other numbers in previous use are now switched off or auto-forward to +44 1624 699222. Please be aware that all telephone calls are recorded for security purposes.

Mike Simpson
Liquidator