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Update for Kaupthing Singer & Friedlander (Isle of Man) Limited Depositors Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process update 7Royal 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 http://www.kaupthingsingers.co.uk/Pages/4169 as well as www.RoyalSkandia.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 6Royal 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 http://www.kaupthingsingers.co.im/ as well as www.royalskandia.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 5Further 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 http://www.kaupthingsingers.co.uk/Pages/4169 as well as www.RoyalSkandia.com for further updates. Kaupthing Singer & Friedlander (Isle of Man) Limited (KSFIOM) – liquidation process update 4In 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 (http://www.kaupthingsingers.co.uk/Pages/4166) 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 3Further 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/Pages/3989) 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 2As part of the KSFIOM liquidation process the liquidator has published an update on their website (www.kaupthingsingers.co.uk/Pages/4160) which will be of interest to all affected Royal Skandia policyholders. Important points to note are as follows:
Kaupthing Singer & Friedlander (Isle of Man) Limited – liquidation process update 1The 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:
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:
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. Last updated 9 July 2010 |
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