Small depositors and insurance company bondholders with money in KSFIoM await details on how payments would be administered and how they would be represented in the scheme should it be accepted.
The proposed scheme would be funded with £150m from the Isle of Man government along with KSF assets and contributions from the Manx banking sector.
According to IoM Treasury director Spellman there is an “agreement in principle” from the banks for a SOA but they are seeking clarity on elements of the scheme before signing up.
He says the Government anticpates their support as they will be called upon for the same level of funding under the depositors compensation scheme but if this was not the case they would have to “reconsider their options.”
He says: “If it moves to liquidation we’ll work with the DCS manager to fund that scheme and start getting the money to people as soon as we can.”
Spellman believes the SOA offers several advantages for depositors versus a traditional liquidation including a quicker return at most deposit levels and greater clarity of return. He also highlights that the scheme would not as some reports suggest remove any of their legal rights of redress against third parties.
However a slight time delay of the first payment would occur as SOA was finalised. He says: “We have introduced the early payment scheme and are extending it to £10,000 so people can enjoy an accelerated payment while the SOA is being constructed itself.”
Figures show that over 6,000 applications for the initial £1,000 early payment has been made by depositors.
Spellman says liquidator provisional figures given in the last court hearing show an estimated £402m estimated to be locked in the UK seeking clarity with a further £140m in cash and around £400m in a loan book.
He says the level of pay out to depositors hinges on the recovery of available assets seized by the UK. He says: “No information has come through on this at all yet so we’re trying to create something which gives the depositors some degree of comfort while the position is clarified on the available assets. Nothing has come out in the last four months.”
“If there’s an adjournment to finalise SOA proposals for depositors then that’s fine but a further adjournment would not be in the best interest of the depositors.”