Adjournment moves KSF IoM towards Manx govt wind-down plan

The liquidation of Kaupthing Singer & Friedlander Isle of Man (KSF IoM) has been adjourned again while the Manx Treasury finalises a plan which could return at least 65p in the pound to depositors.   

The Manx High Court adjourned the case until 9 April after the IoM Treasury argued its plan offered depositors more certainty of payments than the liquidation of the Icelandic-owned bank.  

The IoM government has promised to under-pin its plan to wind down the collapsed-bank with £150 million. Manx Treasury director John Spellman, said before the court case, funding from the government would reassure depositors and guarantee recovery of 65p in the pound - returning 10p in the pound more to depositors than liquidating the bank's assets. 

Consumers who deposited cash via offshore insurance bonds will be covered under the government’s plan, Spellman said, with deposits returned to the relevant insurance company on the behalf of clients.

Payments will come in three instalments of £20,000 or 12.5% of deposits within three months followed by 7.5% in a year then another 15% within two years, Spellman said.

He added that depositors could expect further payments when the bank's assets were sold, highlighting that a lack of clarity about £566 million of deposits caught in sister bank KSF UK was the single biggest obstacle to returning money to depositors.