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Treasury gets KSF petition delay

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The Government will consider emergency payments for savers

A wind-up petition for collapsed Isle of Man bank Kaupthing, Singer and Friedlander Isle of Man (KSFIOM) has been adjourned for a second time.

The delay was secured by the Treasury to give officials more time to try and increase payouts and guarantees for depositors, who had £550m in the bank.

Restructuring and recapitalising are among the options being considered.

Tynwald plans for an emergency fund to make payments on the accounts of those affected were also revealed.

The government said this would be funded by supplementing KSFIOM assets recovered by the provisional liquidator with Treasury and third party funds.

While the potential for such a solution exists we have a duty to keep working towards it
Allan Bell, Treasury Minister

However, the government priority remains keeping KSFIOM as a going concern and avoiding a potentially long and costly liquidation.

The High Court on Thursday agreed to adjourn consideration of the winding-up order until 29 January so alternatives could be further explored.

'Solution exists'

Speaking after the hearing, treasury minister Allan Bell said: "The government is continuing to do everything it can to reach a solution to this situation that is best for depositors."

"While the potential for such a solution exists we have a duty to keep working towards it, and this is what the court has allowed us to do.

"In the meantime the government is very conscious that some depositors may suffer hardship and a scheme to make a payment on account to depositors is being worked on."

Depositors assets of £550m was trapped in London when the UK government froze the assets of KSFIOM's parent bank, Kaupthing hf.

If the bank is wound-up, savers, many of whom have hundreds of thousands of pounds trapped in the bank, would only be able to claim up to £50,000 compensation.

Treasury officials have been in talks with the UK and Iceland officials to explore other ways of getting the depositors' money back.

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SEE ALSO
Anger at Darling island criticism
06 Nov 08 |  Isle of Man
Meeting on UK and Manx relations
07 Nov 08 |  Isle of Man
'Mountain to climb' on KSF funds
31 Oct 08 |  Isle of Man
More time for KSF deposit talks
24 Oct 08 |  Isle of Man
Treasury talks over KSF deposits
23 Oct 08 |  Isle of Man

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