The Isle of Man bank is a unit of an Icelandic lender
The Manx unit of Icelandic bank Kaupthing Singer & Friedlander (KSFIOM) is to go into liquidation after savers rejected a scheme to compensate them.
The rejected plan estimated 54% of customers would have got all funds within three months, while 76% would be fully refunded within two years.
Instead depositors will now receive funds from the Isle of Man government's bank compensation scheme.
A hearing to place the bank into liquidation will take place on 27 May.
Once KSFIOM goes into liquidation, it will trigger payouts from the government's depositor compensation scheme for savers of up to the first £50,000 lost, plus any other money that is recovered during the liquidation process.
The KSFIOM Depositors' Action Group had argued that the rejected plan gave them little more than they would receive under liquidation and organised an internet campaign urging savers to vote against it.
Provisional liquidators had been appointed on 9 October following the collapse of its parent group.