NI Presbyterian mutual society, Short of funds for withdrawal?

red_bertie

I've just read that report and it would appear the PCI is relying on divine intervention, judging by some of the statements.

The term "crocodile tears" also springs to mind.

Cynical that's me. I'm sure someone can offer a more useful interpretation.

Artytarty

I think your round the kitchen table table discussion group probably just summed up the situation perfectly.
I dont know much about money but I know a bit about people..as do you obviously.
Arty.

freddiemae

crazymess wrote: »

From the Mail on Sunday today!!!!!!!!

PRESBYTERIAN SAVERS HEAD FOR WIND-UP

The Administrator of stricken PMS will write to its 10000 savers tomorrow detailing the results of a ballot on the organisation's future. Members are expected to have called for an orderly wind-up.

A run on the Belfast-based society pushed it into insolvency and it closed its doors in November. Is assets are thought to fall £120 million short of the £300 million it owes savers.

Administrator Arthur Boyd hopes that gradual disposals - rather than a fire sale - will reduce depositors' ultimate losses. The assets are primarily mortgage books and commercial properties in Scotland and the North, none of which will shift easily in the present market, says Boyd.

It is hoped that savers, who are mainly elderly, risk-adverse and not well off, may eventually receive 60p in the pound. In the meantime, they hope to be given small, regular distributions.

PMS was founded in 1982 to encourage churchgoers to save and was endorsed by the Presbyterian Church. It was structured as an 'industrial and provident society' so is not regulated by the FSA. Deposits are unprotected.

Savers and MPs have appealed to the Government and even written to Gordon Brown, himself a Presbyterian, asked for the authorities to intervene.

................................

So if it is a wind down with small regular payments then it could be years before you would be able to say just how much you had lost in PMS and be able to sue for compensation.

john2009

freddiemae wrote: »

So if it is a wind down with small regular payments then it could be years before you would be able to say just how much you had lost in PMS and be able to sue for compensation.

It may be years but this would not stop you suing the directors now for compensation. You could sue for more than the shortfall (eg loss of opportunity for future investment, distress etc)

J

expat68

john2009 wrote: »

It may be years but this would not stop you suing the directors now for compensation. You could sue for more than the shortfall (eg loss of opportunity for future investment, distress etc)

J

My legal understanding for a negligence claim is that there must have been a breach of a duty of care , which if the directors breached society rules or didnt disclose a change in investment strategy there would have been, and that there must be a resultant loss which is normally financial. UK courts are very reluctant to award damages for items such as distress which are hard to value though there have some examples for loss of enjoyment and the like where nominal damages have been awarded.

John 2009 - does the loss have to be realised for a negligence claim to proceed and has this ever been tested in existing case law?

crazymess

freddiemae wrote: »

So if it is a wind down with small regular payments then it could be years before you would be able to say just how much you had lost in PMS and be able to sue for compensation.

This is the problem - it will be a 'long and winding road' ahead - although remember the talk that this could last for 18 months - or perhaps a further 6 months - how can the Administrator recover the monies from sale of buildings repayment of loans in that time?

This is where its not simple - will it go on for 10 years ?????????????
Administrator still gets paid ????????????
Staff in Glengall St still stay in their posts ??????????????

The notion then that we are drip fed our savings and nobody knows, not even the Administrator, how much we will get back in total, 45p, 50p in the pound - no-one can tell this.

If we go for that option - then PCI/PMS, DETI, GOV all just get away with this.

john2009

expat68 wrote: »

My legal understanding for a negligence claim is that there must have been a breach of a duty of care , which if the directors breached society rules or didnt disclose a change in investment strategy there would have been, and that there must be a resultant loss which is normally financial. UK courts are very reluctant to award damages for items such as distress which are hard to value though there have some examples for loss of enjoyment and the like where nominal damages have been awarded.

John 2009 - does the loss have to be realised for a negligence claim to proceed and has this ever been tested in existing case law?

An action could be run in two parts, one to assess liability and the other to assess quantum. An action for liability could be run now but courts would defer the issue of quantum until the loss is known. This would certainly focus everyone's minds. The insolvency legislation in England allows for actions by creditors against directors for misfeasance. This can be done during the administration. Presumably legislation in NI is similar.

J

john2009

crazymess wrote: »

Maybe Mills Selig in Arthur Street, Belfast might be able to shed some light!!!!!!

Anyone dealt with them before???????

Never heard of them. My firm's belfast office reckon the administrator has bagged the best insolvency lawyer (which is good for us) but i will ask tomorrow to see who else they rate.

J

expat68

Think you'll be hearing more about this when administrator writes next week.


Company Voluntary Arrangement (CVA)

A CVA is a formal agreement between the company and its creditors, which enables the company to continue trading whilst making contributions to a Supervisor, who must be a Licensed Insolvency Practitioner and who is appointed by the creditors. When there are sufficient funds available, the Supervisor will make a distribution to the company’s creditors. A CVA is particularly useful where a company has experienced a one off problem such as a large bad debt and where the company is inherently profitable with positive cashflow.

In order for a CVA to work, the company of course needs protection from pressure from its creditors. The Insolvency Act 2000 introduced provisions with effect from 1 January 2003, which enable a ‘small company’ to obtain an automatic moratorium whilst the proposals of the company are put forward to the creditors. The effect of the moratorium is that it provides the company with protection from creditors taking enforcement action whilst the CVA proposals are considered.

Before 1 January 2003 companies had to first be placed into Administration in order to obtain protection from creditors, prior to presenting the proposals to their creditors and members. The additional costs of obtaining an Administration Order were often prohibitive, especially when dealing with owner managed companies.

Since 1 January 2003 companies have been able to obtain an automatic moratorium which is effective from the date that the company files certain documents with the court and lasts until the end of the day of the creditors meeting at which the proposals are considered.

Whilst it is for the company to draft the proposals for consideration by its creditors, it is usual for an Insolvency Practitioner to assist in the drafting of the proposal. Typically, a CVA proposal will provide for an arrangement to last between three and five years and the proposal may provide for creditors to receive payment in full over the specified period or, for there to be a part payment of the debts over the specified period with the remainder of the debts being written off.

In order for the proposals to be passed, they have to be approved by both the creditors and members of the company, and in each case a 75% majority of creditors or members attending the respective meetings are required in order for the proposals to be accepted. If the required approval is obtained, the arrangement will then be binding upon any creditor who voted against the proposal and any creditor who did not attend the meeting either in person or by proxy.

The use of the CVA procedure should enable the company to continue trading and in addition the directors of the company will retain the day to day control of the business.

crazymess

john2009 wrote: »

It may be years but this would not stop you suing the directors now for compensation. You could sue for more than the shortfall (eg loss of opportunity for future investment, distress etc)

J

Can this be done during Administration?