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Kaupthing Singer & Friedlander

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 28

The liquidator has posted an update on his website advising of the progress of the hearing to decide how further interest should be calculated. The first court date will be on 16 November 2016. Full details can be found on the site www.kaupthingsingers.co.im/.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 27

On 9 August 2016 the liquidator published on the KSFIOM website a document titled "Letter to Unsecured Creditors".  

This letter is concerned with the liquidator’s request for advice from the Manx High Court for guidance on how to calculate interest payments for the period after KSF was placed in liquidation; 8 October 2008.   

Of immediate interest to our policyholders who held a deposit with KSF are point 1 and 2 of the section titled “Court Order.  Copied below in full.

  1. Creditors who had their outstanding interest up to 8th October 2008 capped at 5% will receive the balance of their interest due up to that date;
  2. With regard to interest to be paid for the period from 8th October 2008 onwards, this is likely to be a small sum for each creditor, as the remaining surplus is quite small;

The liquidator has not announced a date when payment will be made. 

The liquidator has also released a report on the progress of the liquidation for the period 10 January 2016 to 9 July 2016.  The full report can be found at http://www.kaupthingsingers.co.im/2016/august/5august2016/

In this report the liquidator has commented on when he expects to be able to complete the liquidation process.  His statement is copied below in full.

It is now nearly eight years since the company was placed in liquidation provisionally and there are only a small number of outstanding issues to be resolved. Whilst I am hopeful of being able to finalise the liquidation within the next twelve months, it is difficult to predict as those remaining issues, particularly loan repayments and the final resolution of the parental guarantee claim, are not fully within my control.

Any relevant announcements from the liquidator will be reported on the Old Mutual International website. However, in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidator’s website http://www.kaupthingsingers.co.im/

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 26

On 10 August 2015 the liquidator published his most recent report. This can be seen in full on http://www.kaupthingsingers.co.im/2015/august/10august2015/

As explained in update 25 below there is an amount of interest still to be repaid.  The liquidator has announced in the report his intention of making another payment to creditors.  This is copied in full below.   

3.2 As set out in Section 3.1 above, the JLs have achieved a return of 100p in the £ with the payment of the tenth dividend on 28 November 2014 based on
the claims accepted in the liquidation. This will now allow the JLs to pay some interest on the claims. However, 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 is as follows:

  • 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.

  • 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.

Once the above two steps have been completed, all creditors will have received all their interest entitlements up to 8 October 2008. In respect of further interest payments, we are in the process of seeking directions from the court on the calculation methodology.

3.3 It is intended that one further dividend will be paid to creditors in respect of each class of interest, the timing and amount of which will depend upon
the realisation of the remaining assets.

Old Mutual International Isle of Man will publish the date of the payment on this webpage as soon as it is announced by the liquidator.

Also included in this report is a statement by the liquidator on when he expects the liquidation process to end.  This is copied in full below.

It is now nearly seven years since the company was placed in liquidation provisionally and there are only a small number of outstanding issues to be resolved. Whilst I am hopeful of being able to finalise the liquidation within the next eighteen months, it is difficult to predict as those remaining issues, particularly loan repayments and the resolution of the parental guarantee claim, are not fully within my control.

Any relevant announcements from the liquidator will be reported on the Old Mutual International website. However, in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidator’s website http://www.kaupthingsingers.co.im.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 25

Explanation – Payments to date

The payment in November brought the amount repaid to creditors to 100% of deposits together with any interest accrued at a rate of up of 5% as at the date the bank went into liquidation.

The majority of accounts held within Old Mutual International bonds were in deposits paying more than 5%.  Under Manx company law, relating to liquidation, the Joint Liquidators (JLs) are only initially allowed to return payments based on accrued interest at a maximum rate of 5%.  

The JLs refer to the difference between the two amounts, that is the sum calculated at 5% and the sum calculated at a higher applicable rate, as deferred interest. The amount remaining in the KSF “accept account” listed in your bond statements is the amount of deferred interest owed to your account. It is possible that the liquidators may be able to repay the deferred interest in the future as the liquidation is not yet complete.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 24

2015 annual update sent to our clients in January 2015.

As the liquidation of Kaupthing Singer and Friedlander (KSF) is in its final stages this will be the last annual newsletter produced for clients with holdings in Kaupthing Singer and Friedlander ((Isle of Man) Ltd (KSF). 

Two distributions were made in 2015. 

  • 12 September 2014 – 2.2 pence in the £ (2.2%)
  • 28 November 2014 –  2 pence in the £ (2%)

The payment in November was made possible by the sale to a third party of KSF’s claim against KSF (UK) Ltd for £18.4 million.  This means that no further payments will be received by the joint liquidators (JLs) from this source. 

The payment in November brought the amount repaid to creditors to 100% of deposits together with interest accrued at a rate of up of 5% calculated at the date the bank went into liquidation.
The majority of accounts held within Old Mutual International bonds were in deposits paying more than 5%.  Under Manx company law relating to liquidation the JLs are only initially allowed to return payments based on interest accrued at a maximum of 5% to the date the bank went into liquidation.  

The JLS refer to the difference between the two amounts that is the sum calculated at 5% and the sum calculated at a higher applicable rate as deferred interest.  It is possible that the liquidators may be able to repay the deferred interest in the future as the liquidation has not completed. Information on deferred interest can be found in Update 6 on the KSF page of our website  www.skandiainternational.com/united-kingdom/consumer/kaupthing-singer--friedlander/  

To see the amount of deferred interest applicable to your holding in KSF refer to the entry on your bond statement titled ‘KSF accept account’.  

In order to obtain up to date information on the progress of the liquidator the JLs website can be found on http://www.kaupthingsingers.co.im this is the site used by Old Mutual International to obtain its information.  

Whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

Any major events that occur during 2015 will be reported on the Old Mutual International website.  

 

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 23

The Joint Liquidators (JLs) have announced that the tenth distribution will be paid on 28 November 2014.  The amount of the payment is 2 pence in the £ (2%). Bringing the total returned to 100p in the £ (100%). Old Mutual International Isle of Man will begin to credit accounts on receipt of the payment.

Old Mutual International Isle of Man will commence crediting funds as soon as they are received and expect to fully complete all transactions by 15 December 2014.

This payment was made possible due to the sale, to a third party, of KSFIOM’s claim against Kaupthing Singer and Friedlander (UK) Limited for £18.4 million.  

Any relevant announcements from the JLs will be reported on the Old Mutual International website. However, in the meantime we would strongly recommend that, if possible, you regularly monitor the JLs website http://www.kaupthingsingers.co.im as well as http://www.oldmutualinternational.com/united-kingdom/consumer/kaupthing-singer--friedlander/ or contact our Helpdesk directly on +44 (0)1624 655135 if you require specific assistance.

 

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 22

The Joint Liquidators (JLs) have announced that the ninth distribution will be paid on 12 September 2014. The amount of the payment is 2.2 pence in the £. Royal Skandia will begin to credit accounts on receipt of the payment.

On 9 September 2014 the Joint Liquidators (JLs) published their most recent report. This can be seen in full on www.kaupthingsingers.co.im/media/7799/ksf_report_9_july_2014.pdf

This report shows that the first half of 2014 has been positive in regards of the liquidation process.  The JLs have once again revised the estimated final return upwards. The revised final return is now estimated at between 99% and 99.6%.

The JLs is managing KSF IOM’s loan book and the report advises that in 2014 15 loans remained; the last of which was due for repayment in July 2014. Of these 11 remain outstanding and are now in arrears. The report contains full details of how the JLs will deal with these outstanding loans.

The JLs have made the following statement regarding when the liquidation process will be completed:

“xIt is difficult to predict when the liquidation will be concluded. Whilst the level of input required has reduced significantly, we are dependent on the progress of the administration of KSFUK and the insolvency process for KHF and the timing of payments therefrom. Neither the Administrators of KSFUK or the Winding-up Committee of KHF have given any indication of when they anticipate their processes being completed.”

Any relevant announcements from the JLs will be reported on the Skandia International website. However, in the meantime we would strongly recommend that, if possible, you regularly monitor the JLs website www.kaupthingsingers.co.im as well as www.skandiainternational.com/united-kingdom/consumer/kaupthing-singer--friedlander/ or contact our Helpdesk directly on +44 (0)1624 655135 if you require specific assistance. 

Update for Kaupthing Singer & Friedlander (IoM) Ltd Depositors

SoA letter to Policyholders

Royal Skandia Affidavit

Statement of liquidator's recoverable assets

Details of Early Payment Scheme

Impact of charges

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 21

Royal Skandia despatched the following letter on 7 March 2014 to all policyholders who hold an investment with KSF within their portfolios.

There was one distribution of 4.8% paid on 28 June 2013 which brought the distributions paid to date to 95.8%. 

Whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

On 9 September 2013 the Joint Liquidators (JLs) published their most recent report.  This can be seen in full on http://www.kaupthingsingers.co.im/media/7410/ksf_report_9_july_2013.pdf

The report shows that 2013 has been another positive year for the liquidation process and the JLs have once again revised the estimated return upwards. The revised final return is now estimated as between 98.3% and 99.2%. This does not allow for any return in respect of the parental guarantee nor does it allow for any potential recoveries arising out of the ongoing investigation into the Company’s affairs.

The JLs have also announced that a minimum distribution of 2% will be paid in 2014.  No payment date has been given yet. Once the payment date is known it will be published on Skandia International’s website. The link to the website is given below.

The JLs is managing KSF IOM’s loan book and expects that all outstanding loans will be repaid in 2014.  This will then only leave the amounts owed to KSF IOM by its parent company (KHF) and KSF in the United Kingdom (KSFUK).

The JLs have made the following statement regarding when the liquidation process will be completed:-

“It is difficult to predict when the liquidation will be concluded. Whilst the level of input required has reduced significantly, we are dependent on the progress of the administration of KSFUK and the insolvency process for KHF and the timing of payments therefrom. Neither the Administrators of KSFUK or the Winding-up Committee of KHF have given any indication of when they anticipate their processes being completed.”

Any major events that occur during 2014 will be reported on the Skandia International website and we will write again to affected policyholders with a further update at the beginning of 2015.  However, in the meantime we would strongly recommend that, if possible, you regularly monitor the JLs website http://www.kaupthingsingers.co.im as well as http://www.skandiainternational.com/KSF/  or contact our Helpdesk directly on +44 (0)1624 655135 if you require specific assistance.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 20

The joint liquidators’ published their latest creditor’s report on the progress of the liquidation of Kaupthing Singer and Friedlander (IOM) on 2 September 2013. The main points of the report are:

  • The estimated final return has been revised to between 98.3 – 99.2 pence in the pound.
  • 95.8 pence in the pound has been paid to date. 
  • The liquidator is hoping to make a further payment of 2 pence in the pound in the first half of 2014.
  • £891.9 million of assets recovered to date. 
  • 90.4% of the loan book recovered.
  • Outstanding loans due to be repaid by April 2014.
  • Various legal actions which include the final appeal of Lighthouse Living Ltd v KSF liquidators regarding set off against a loan with the bank to be heard by the Privy Council in October.
  • The liquidators have sought legal advice regarding balances both owed by and owed to KSFIOM by their parent company Kaupthing HF (KHF). 

For the rest of 2013 and into 2014 the liquidator will be concentrating on:

  • Continuing to manage the loan book.
  • Pursuing a claim against KHF under the parental guarantee.
  • Declaration and payment of subsequent dividends* when funds available.
  • Considering further actions against parties identified by the ongoing investigation.
  • Consulting with the committee.
  • Reporting important information to creditors via website updates.

Also in the report is a statement on when the liquidation process will be complete.  This is reproduced below in full.

“It is difficult to predict when the liquidation will be concluded.  Whilst the level of input required has reduced significantly, we are dependent on the progress of the administration of KSFUK and the insolvency process of KHF and the timing of payments therefrom.  Neither the Administrators of KSFUK or the Winding- up Committee of KHF have given any indication of when they anticipate their processes being completed.”

The full report containing details of the above can be viewed at www.kaupthingsingers.co.im/2013/september/2september2013/

* The liquidator refers to the payments made to creditors as dividends.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 19

The liquidator has announced that an eighth distribution will be made on 28 June 2013 of 4.8 pence in the pound (4.8%). This will bring the total distributions paid to 95.8 pence in the pound (95.8%). The full announcement can be viewed at www.kaupthingsingers.co.im/2013/june/13june2013/

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 18

The liquidator has placed a statutory notice www.kaupthingsingers.co.im/media/7267/eighth_dividend_advert.pdf informing creditors that he will be making an eighth dividend (payment). He states that he will make the payment within two months of placing the notice. The notice is dated 27 April 2013; therefore Royal Skandia expect to receive the next payment for distribution by the 27th June 2013. The liquidator has announced that the payment will be no less than 4% (4 pence in the pound). This webpage will be updated once Royal Skandia knows the exact date the payment will be received.

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 17

Below is a copy of annual update sent 27 February 2013 to policyholders who hold KSF deposits within their bond. The liquidator has increased his estimate of the amount of the next payment due to be paid. He now expects to pay 4 pence in the pound (4%). The liquidator has also announced the payment will be made in the first half of 2013 but has not provided a specific date yet.
Annual update (Word document)

Kaupthing Singer and Friedlander (Isle of Man) Limited (KSFIOM) – Liquidation Process update 16

The joint liquidators’ published their latest creditor’s report on the progress of the liquidation of Kaupthing Singer and Friedlander (IOM) on 17 August 2012. The main points of the report are:

  • The estimated final return has been revised to between 97.2 – 99 pence in the pound.
    91 pence in the pound has been paid so far.
  • An interim dividend of at least 3 pence in the pound will be paid in 2013 – no date given for this payment.
  • Parental Guarantee – The liquidator’s appeal to the Supreme Court of Iceland to have the parental guarantee recognised was successful. However the parental guarantee is classed as an unsecured claim. The liquidator has stressed that though they have won the ruling this does not mean that there is any guarantee that any funds will be available after the secured creditors have been paid or when it will be paid. For more details please refer to the full report which is published on the liquidators website.
  • A further creditor’s report will be published in approximately six months.

For the rest of 2012 and into 2013 the liquidator will be concentrating on:

  • Continuing to oversee the collection of the loan book.
  • Pursuing the claim against KHF under the parental guarantee.
  • Declaration and payment of subsequent dividends when funds are available. Considering further actions against parties identified by the ongoing investigation.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process update 15

Seventh Distribution

The Joint Liquidators announced on 4 May 2012 that a seventh distribution of no less than 7.6 pence in the pound will be paid on or around 15 June 2012. This will bring the total distributions to date to 90.08 pence in the pound.

Royal Skandia will credit client accounts on Monday 18 June 2012, following receipt of funds from the Joint Liquidators.

The amount will be calculated on the value of the deposit with KSF at the time the Bank failed, less any deferred interest (Manx liquidation laws only allow repayment of 5% interest until 100% of each client’s account is repaid).

Whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

Unless any major developments occur we will write to affected policyholders with a further update at the end of this year. However in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidators website www.kaupthingsingers.co.im/ as well as www.skandiainternational.com for any further updates or contact our Helpdesk directly on +44 (0)1624 655465 if you require specific assistance.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 14

The Joint Liquidators’ published their latest report on the progress of the liquidation of Kaupthing Singer & Friedlander (Isle of Man) on 17 February 2012. The main points of the report are:

  • The estimated final return has been revised to between 95.4 – 98.6 pence in the pound
  • 83.2 pence in the pound dividends paid to creditors so far
  • All outstanding loans are due to be repaid by March 2014
  • An interim dividend of at least 6 pence in the pound will be paid during 2012 – no date was given for this payment
  • A further formal report will be published in approximately six months

In 2012 the Joint Liquidators will be concentrating on:

  • Continuing to oversee the collection of the loan book
  • Pursuing a claim against KSF under the parental guarantee
  • Declaration and payment of subsequent dividends when funds are available
  • Considering further actions against parties identified by the ongoing investigation
  • Consulting with the Committee
  • Reporting important information to creditors via website updates

The full report can be accessed through the following link: www.kaupthingsingers.co.im/media/6671/ksf_creditors_report_9_january_2012.pdf

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 13

Published November 8 2011

Sixth Distribution

The Joint Liquidators announced on 8 November 2011 that a sixth distribution of 9.6 pence in the pound will be paid on 11 November 2011. This will bring the total distributions to date to 83.2 pence in the pound.

Royal Skandia will credit client accounts on 16 November 2011, following receipt of funds from the Joint Liquidators.

The amount will be calculated on the value of the deposit with KSF at the time the Bank failed, less any deferred interest (Manx liquidation laws only allow repayment of 5% interest until 100% of each client’s account is repaid).

Whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

Unless any major developments occur we will write to affected policyholders with a further update at the end of this year. However in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidators website www.kaupthingsingers.co.uk as well as www.skandiainternational.com/ for any further updates or contact our Helpdesk directly on +44 (0)1624 655465 if you require specific assistance.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 12

Published October 13 2011

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 Sixth 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 October 2011 in order to be included in the sixth 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 October 2011. Any request for a change in payment details after this date may result in a delay to the payment of the sixth 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 9.5 pence in the pound.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 11

The Joint Liquidators (JLs) published their most recent report on the KSF website on 12 August 2011. The JLs have given an indication of when the next payment will be and also a revised final outcome -

The JLs are focused on returning funds to creditors as soon as possible and it is hoped that sufficient further funds will become available to enable them to pay further interim dividends in the region of 8 pence to creditors towards the end of 2011.

For indicative purposes only, it is estimated that the dividend range may be between 93.0 pence in the pound and 98.1 pence in the pound. This has not allowed for any return in respect of the parental guarantee. Clearly any recovery from this source will impact the final dividend to creditors. The estimate also does not allow for any potential recoveries arising out of the ongoing investigation into the Company’s affairs.

A copy of the full report can be found here

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 10

Update published 13 June 2011. The Joint Liquidators of KSF IOM have today published the following announcement on their website:

"Parental Guarantee

We have been advised by the Supreme Court of Iceland that our appeal has been upheld and, therefore, the validity of the parental guarantee has been proven. The decision of the Supreme Court is final and cannot be appealed.

This is clearly a significant victory and is a major step forward in our attempt to recover money from the parent group for the benefit of creditors.

As you are aware, Kaupthing Bank hf is seriously insolvent, so this decision does not mean that the value of our claim is going to be paid in full, or that creditors of KSFIOM are guaranteed to be repaid in full. Indeed the Winding Up Committee has not yet given any indication as to the likely recovery and it may be some time before they are able to do so.

Those creditors of Kaupthing Bank hf who objected to the validity of the KSFIOM claim may also seek to challenge the value of the claim, so it may be some time before the value of our claim is finally agreed.

The link to the site is www.kaupthingsingers.co.im/Pages/2011/June/13June2011.asp"

Attached is an English translation of the judgment of the Supreme Court of Iceland in respect of the parental guarantee, which affirms the right of KSFIOM to make a general claim against KSF.

Supreme Court Judgment – English translation

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 9

Royal Skandia received notification from the Joint Liquidators of KSFIOM that a fourth distribution of 12.5% was paid on 8 April 2011. This brought the total distributions to date to 73.6%. In their February Report the Liquidators have said that they estimate an 18% payout in 2011 and the final return is now estimated at between 91.4 – 97.7%. For further details, please review the full report at the following link – www.kaupthingsingers.co.im/Pages/2011/February/11February2011.asp

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 8

You may have seen press coverage recently suggesting individual policyholders are able to make individual claims:

www.moneymarketing.co.uk/regulation/ex-watchdog-challenges-manx-ksf-iom-bond-move/1022142.article

Since the beginning of this situation, Royal Skandia has done all in its power to attempt to bring about the best possible resolution for customers and is taking additional legal advice relating to these new suggestions of individual action.

Our initial legal advice is that any individual claims will be rejected. However to ensure that your interests have been protected Royal Skandia has registered a claim on your behalf with the Compensation Scheme Manager. You do not have to register a separate claim at this point. We are taking further legal advice and will keep you informed of any developments.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 7

Royal Skandia has received notification from the Joint Liquidators of KSFIOM that a third distribution of 11.1% will be paid on 9 July 2010. This will bring the total distributions to date to 51.1%.

The payments, when received by Royal Skandia, will be credited to affected Bonds on 14 July, backdated to 9 July, in a similar way to the previous dividends.

Whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

Unless any major developments occur we will write to affected policyholders with a further update with their 2010 year end valuation. However in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidators website www.kaupthingsingers.co.uk as well as http://www.skandiainternational.com/ for any further updates or contact our Helpdesk directly on +44 (0)1624 655465 if you require specific assistance.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 6

Royal Skandia has provided regular online updates throughout the year regarding the liquidation of Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM), however we would like to take this opportunity to update all affected Policyholders in writing about recent events concerning KSFIOM and explain their impact on affected investments following the liquidation of KSFIOM on 27 May 2009.

Following liquidation, a Creditors Committee was established to work with the liquidator to facilitate the payment of distributions to creditors. Royal Skandia is an elected member of that body and is committed to ensuring you receive the best possible return via the liquidation process.

The first distribution of 24.8% of policyholders' original investment amounts was made by the liquidator on 4 September 2009. Typically, all customers had previously received payments under the Isle of Man Government's Early Payment Schemes of £10,000 (€12,630 or $17,230) per account, or the full investment amount if it was less than £10,000 (€12,630 or $17,230). Payments under the first distribution were therefore made to policyholder accounts after deduction of these advances.

On 8 December 2009 the liquidator paid out a second dividend of 15.2% and this payment was credited to affected Bonds in a similar way to the first dividend.

Subsequently, the liquidator has released an update on the return to creditors where he estimates an ultimate distribution of between 82.88% and 93.76% paid out over the next eight years. The liquidator has also provided a statement regarding claims on Kaupthing Bank hf in respect of its parental guarantee to KSFIOM. Following legal advice Royal Skandia has registered a claim, although our considered opinion, again based upon legal counsel, is that such claims are unlikely to succeed.

We would also like to explain that, when the September distribution was made, the amount received by Royal Skandia was less than expected. When we questioned this we were advised that this was due to 'deferred interest' and, under liquidation law, because accrued interest has not been paid, the interest element is ranked differently in the order of preference when repaying creditors. Unapplied interest earned at a rate in excess of 5.00% is deferred until all other creditors have been paid in full. This means that the liquidator can only assume a maximum interest rate of 5.00% in calculating dividends so, if your linked deposit was earning 6.82%, 1.82% of that interest will not be payable until all other creditors have been paid.

For example:
Original deposit £100,000
Accrued interest at 6.82% £6,820
Value of deposit £106,820
Value of dividend declaration £105,000

In this example you can see that £1,820 is deferred and would not be repayable until all other creditors have been paid.

Royal Skandia has challenged this but has been advised by the liquidator that we can do nothing about it. Therefore whilst the first distribution we credited to your account was based on the full amount, the second and subsequent distributions reflect 'deferred interest' and take any overpayments from the first distribution into account.

Finally, we can confirm that whilst quarterly contractual administration charges still apply to your Bond we will continue to rebate fees on the undistributed portion of your investment until such time as the liquidation process is complete.

We trust this has now fully updated you and, unless any major developments occur, we intend to write to you again with your 2010 year end valuation and a further update. However in the meantime we would strongly recommend that, if possible, you regularly monitor the liquidator's website www.kaupthingsingers.co.im/ as well as www.skandiainternational.com for any further updates or contact our Helpdesk directly on +44 (0)1624 655465 if you require specific assistance.


Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 5

Further to our previous update the liquidator, via their website, has provided a statement regarding claims on Kaupthing Bank hf in respect of its parental guarantee to KSFIOM. We are currently taking legal advice as to whether Royal Skandia should submit a claim and as soon as we are able we will publish our decision online.

In the meantime, Royal Skandia recommends that affected policyholders regularly monitor the liquidators website www.kaupthingsingers.co.uk as well as www.skandiainternational.com for further updates.


Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 4

In our previous update we confirmed that the KSFIOM liquidator was close to releasing a more accurate indication of returns. This information has now been posted on the liquidator's website (www.kaupthingsingers.co.uk) and states that, currently, he estimates an ultimate distribution of between 82.88% and 93.76% paid out over the next eight years.

We recommend that you continue to monitor both the regulator’s website and our own for further updates.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 3

Further to our previous communications regarding investments via Royal Skandia into Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM), we can confirm that on 8 December 2009 the liquidator of KSFIOM paid out a second dividend to creditors amounting to 15.2%. This payment has been received by Royal Skandia and we are now in the process of allocating payments to each affected bond.

From Wednesday 16 December 2009 full details of the exact amounts allocated to each affected bond (and consequently the current value of affected Bonds) can be obtained via your financial adviser and/or by contacting Royal Skandia's Portfolio Bond Valuation team here on the Isle of Man.

The liquidator has also indicated that they will soon release an estimate of future distributions. The liquidator intends to post this estimate on their website (www.kaupthingsingers.co.uk/) in the next few days in order that creditors may have a better indication of the final outcome and we would therefore suggest you regularly check the liquidator's site for updates.

Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process
update 2

As part of the KSFIOM liquidation process the liquidator has published an update on their website (www.kaupthingsingers.co.uk/) which will be of interest to all affected Royal Skandia policyholders. Important points to note are as follows:

  • A meeting of the Committee of Inspection was held on 5 November 2009 and minutes of the meeting will be posted on the liquidator's website as soon as they have been agreed.
  • The liquidator will shortly be releasing an indicative distribution schedule and updating his estimate of the final outcome.
  • The liquidator of KSFIOM will be making a claim to the Winding-up Committee of Kaupthing Bank hf on the basis of the parental guarantee for the shortfall in the company's assets.
  • The liquidator intends to pay a second distribution in December 2009. The amount of dividend is expected to be in the region of 14% and will be confirmed in early December.
  • Royal Skandia recommends that affected policyholders regularly monitor the liquidator's website, as well as www.skandiainternational.com, for further updates.

Kaupthing Singer & Friedlander (Isle of Man) Limited – liquidation process
update 1

The formal liquidation process has commenced, and the liquidators have announced that the first distribution will be made on 4 September 2009. The distribution amount has been confirmed at 24.8% of customers’ original investment amounts.

We will credit policyholder transaction accounts with the relevant amounts during the week commencing 7 September, with a value date of 4 September.

Typically, all customers received a payment made under the Early Payment Schemes (EPS) in February and April 2009 of £10,000 (€12,630 or $17,230) per account, or the full investment amount if it was less than £10,000 (€12,630 or $17,230).

Payments will now be made to policyholder accounts after deduction of these advances; for example, if you received £10,000 on an initial balance of £100,000 then the first 10% of the initial distribution will be deducted by the liquidator and reimbursed to the Manx treasury, who funded the EPS. A table illustrating the outcomes of a 24.8% distribution with differing original balances is set out below:

Balance at 9 October 2008 EPS Distributions (% of original balance) Current balance, after EPS distributions Distribution from liquidator Payment credited to policyholder
£25,000 £10,000 (40%) £15,000 24.8% Nil
£50,000 £10,000 (20%) £40,000 24.8% £2,400
£100,000 £10,000 (10%) £90,000 24.8% £14,800

As a guideline, if accounts have a current balance less than £30,300 (€38,300 or $52,250) they will not receive a distribution at this stage.

Clients who have accounts denominated in € or US$ have previously been asked to elect whether they want to maintain their currency balances or convert them to GBP. For those who elected to remain in their original currencies, illustrative distributions would be as follows:

Balance at 9 October 2008 EPS distributions (% of original balance) Current balance, after EPS distributions Distribution from liquidator Payment credited to policyholder
$40,000 $17,230 (43.1%) $22,770 24.8% Nil
$80,000 $17,230 (21.5%) $62,770 24.8% $2,610
$100,000 $17,230 (17.2%) $82,770 24.8% $7,570
         
€40,000 €12,630 (31.6%) €27,370 24.8% Nil
>€70,000 €12,630 (18%) €57,370 24.8% €4,730
€100,000 €12,630 (12.6%) €87,370 24.8% €12,170

However, if you have any questions on this or any other KSFIOM matter, we would recommend that in the first instance you first refer to the KSFIOM website www.kaupthingsingers.co.uk/, or contact our dedicated KSF customer helpdesk at RSKFMCustomerHelpdesk@RoyalSkandia.com or by telephone +44 1624 655465.

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