KSFIOM adjournment causes consternation

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Thursday, 05 March 2009 09:28

The Kaupthing Singer & Friedlander Action Group (KSFIOMDAG) is ‘devastated’ by the court’s adjournment on the question of whether a Scheme of Arrangement should be used to recover depositors’ savings.

The Treasury needs additional time to determine the structure of the scheme, an alternative to the use of a Depositors’ Compensation Scheme (DCS).

The adjournment will be granted until April 9. The court was told the scheme would enhance the possibility of payments. Under a DCS payouts could be affected by any further bank collapse.

The KSFIOMDAG is particularly aggrieved as just weeks ago the court stated the unclear situation the state depositors had been left in was unacceptable, and then subsequently granted the Isle of Man government an extension.

“They failed to deliver anything until 24 hours after the court’s deadline and then the little they did deliver offered nothing of substance on which to base an informed decision,” says a KSFIOMDAG spokesperson.

The Treasury says the scheme will ensure small depositors are reimbursed first. The target is for more than half to get their savings returned within three months, and roughly 70% should be repaid within two years. This timetable was disputed in court.