Edwin Coe letter to Scheme Manager 09/062009

Edwin Coe letter to Scheme Manager 09/062009

For the Attention of Mike Fayle - Agent to the Scheme Manager

Dear Mr Fayle

I have been provided with a copy of your letter sent to claimants on 5 June 2009. We understand that it is proposed that each depositor will receive a full payment of £50,000 (subject to deduction for the Early Payment Scheme) in the next few months.

You say in the course of that letter:-

In return, you will be required to assign your existing full rights in the liquidation to the Scheme Manager to enable it to pay compensation sums to you and thereafter recover the amounts of compensation paid.

I would be grateful if you could explain the position as to this assignment, which is causing considerable confusion amongst depositors.

Unsurprisingly they question why they should assign all of their rights to make a claim in the liquidation to the Depositors' Compensation Scheme bearing in mind that at the very most the DCS is to pay them £50,000. I could understand if an assignment of £50,000 was required as a condition of the operation of the Depositors' Compensation Scheme. This would have some logic. I have to say that I would still raise objection that a depositor was required to assign their rights to the DCS without any assurance as to the timing and quantification of payment.

Leaving that to one side at the moment, however, it cannot be right that the DCS is entitled to an assignment of rights which it is not proposing to compensate.

I would be grateful for your urgent advice on the point. As I say, depositors are confused and cannot understand what is being required of them and why.

Regards

David Greene
Partner
For Edwin Coe LLP

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