The IoM treasury’s scheme of arrangement has been passed by the IoM High Court to go to a vote by KSF IoM savers and creditors on May 19.
It seeks to offer a better solution than a liquidation and guarantees depositors at least 60p per pound. The Manx government estimates the scheme will guarantee 54 per cent of eligible depositors 100 per cent of their money back within three months of the scheme being signed, with 71 per cent repaid in full within two years.
But bondholders who will not be recognised as individual depositors will only get cover under the early payment scheme of up to 10,000 per bond and “pari passu” payment proportionally under the SOA.
Isle of Man Finance director John Spellman says: “It has been identified as a point of law that an insurance company is a depositor in its own right and therefore beneficial owner of those deposits and individuals will not be recognised for individual payments.”
The scheme needs to be approved by 75 per cent of voters by value of deposits and 50 per cent of each individual class of cre- ditor or saver.
The petition to wind up KSF IoM has been adjourned to May 27 when the High Court will be asked to sanction the scheme. If rejected, KSF will be liquidated and the depositor compensation scheme triggered.
Helm Godfrey managing director Bruce Wilson says: “It is extremely inequitable as these bonds have been marketed completely wrongly. I do not believe that the depositors should suffer, it is outrageous if bondholders are not compensated from somewhere, whether it is the Isle of Man or the insurance companies.”