Update from the Administrator 13 November 2013
I am pleased to report that, because the purposes of the Administration have been sufficiently achieved, I am in a position to bring the Administration to an end after almost five years, effective from 7 November 2013.
A copy of my final report for the period 17 November 2012 to 7 November 2013 with form 2.32B has been sent to creditors and the Court and is available here.
You will recall that I was appointed Administrator of the PMS on 17 November 2008 in order to resolve its financial difficulties.
Because the Administration process was not initially available to the PMS as an Industrial and Provident Society, the Department of Enterprise Trade and Investment introduced legislation in early November 2008 to enable the procedure to apply to the Society.
During the Administration I was able to make a distribution of £24m (12p in the £) to creditors in April 2010 and subsequently to devise the Scheme of Arrangement which was accepted by the Society’s 10,000 creditors and members and sanctioned by the Court.
The Scheme resulted in more than £232m being distributed in 2011 (with members/creditors receiving between 77p and 100p in the £). At that time the PMS had total liabilities of £279m.
Since then, the Administration has continued in order to enable a number of matters to be completed. These matters have now been dealt with and I am able to formally end the Administration. The aim of the Administration was to obtain a better result for the savers than would be likely if the company had been liquidated and to that end it has been successful.
This has been one of the lengthiest and most complex insolvency procedures ever to take place in Northern Ireland and it impacted a significant number of people many of whom were in real financial distress as a result of the collapse of the Society.
The fact that creditors and members were able to receive a substantial return was due to the support of the Northern Ireland Executive and all political parties for a proposed rescue package. That resulted in £225m being made available and a further £1m was contributed by the Presbyterian Church in Ireland.
In the face of personal hardship and uncertainty PMS savers have shown incredible patience during the insolvency process. I am grateful to all those who came together to help resolve what at first appeared to be an insurmountable problem and to enable me to return money to those who had suffered.
The Presbyterian Mutual Society Limited continues to be managed by its Joint Supervisors, who are myself and Mr John Hansen of KPMG, through the Scheme of Arrangement. The Supervisors are responsible for the orderly realisation of its assets, and repayment of a loan from the Department of Enterprise, Trade and Investment Northern Ireland, plus interest. Whether any further distribution will be made to members/creditors depends on the level of recoveries made from PMS’s loans and property assets over the period of the DETINI loan to 2021.
Update from the Administrator 6 June 2013
On 10 May 2013 the High Court agreed to extend the period of Administration for 6 months to 16 November 2013 to enable the Administrator to finalise all outstanding matters and in particular, to allow time for a number of creditors to cash outstanding cheques which were re-issued to them.
The Court has agreed that rather than issue a progress report for the 6 months to 16 May 2013, the Administrator should issue a final report from 17 November 2012 to the cessation of the administration, which is anticipated to be prior to 16 November 2013.
Update from the Administrator 14 December 2012
The Administrator’s progress report for the period 17 November 2011 to 16 November 2012 has been sent to members and creditors and is available here.
Update from the Administrator 19 January 2012
Update from the Administrator Thursday 28 July 2011
The Joint Supervisors have been working closely with the Department of Enterprise Trade and Investment to fulfil all the pre-conditions to enable funds to be drawn down. As you can imagine, a transaction of this size and nature is complicated but we are now in the final stages. Cheques are ready to post and will be sent at the beginning of next week following the completion of all pre-conditions and the funds having been transferred to our account. We are grateful to members and creditors for their patience.
Update from the Administrator Monday 4 July 2011
I am pleased to say that the Court has formally sanctioned the Scheme of Arrangement and that the Scheme Supervisors can now proceed to draw down the funds and issue cheques this month to members and creditors once certain pre-conditions have been satisfied. I am currently working through the pre-conditions with my legal team and will update members and creditors shortly when I have a more precise date for drawing down the funds and making distributions.
I fully understanding that awaiting the outcome of the necessary legal process surrounding the Scheme of Arrangement has been stressful for members and creditors and I would like to thank you for your patience
Update from the Administrator Wednesday 29 June 2011
I can now confirm that my application for the Scheme of Arrangement to be sanctioned by the Court will be heard next Monday, 4th July 2011. On the assumption that sanction is obtained on that day, my plans are to draw down the funding available from the Department of Enterprise Trade and Investment (Northern Ireland) which should enable me to issue cheques to members and creditors before the end of July 2011 .
Update from the Administrator Monday 20 June 2011
I am pleased to report that the period in which any challenges could be brought to the Scheme of Arrangement has now expired without any challenge being made to the proposed Scheme. The process of agreeing the funding documents with the Department of Enterprise Trade and Investment (Northern Ireland) is at a very advanced stage but as yet I do not have a date on which the Scheme of Arrangement will be sanctioned by the High Court. Once I have this date for the final hearing, I will update members/creditors again.
Update from the Administrator Monday 16 May 2011
The Administrator wrote to members and creditors on May 13 informing them of the result of the voting on the Scheme of Arrangement. The Scheme has been overwhelmingly accepted and the level of voluntary deferment is such that the amount payable to shareholders with total holdings of less than £20,000 can be increased from 97p to 100p in the £. The Scheme now requires the formal sanction of the Court.
The Administrator’s letter is available here.
The Administrator also issued a Press Release which is available here.
In his correspondence the Administrator included his Progress Report for the period 17 November 2010 to 31 March 2011 which is available here.
Update from the Administrator Friday 8 April 2011
The proposed Scheme of Arrangement, along with a voting form, was posted first-class on Wednesday 6 April to all members and creditors of the Society. The closing date for votes to be received is 5pm on Friday 6 May 2011. The Administrator issued a press release about the proposed Scheme for publication in the media on Friday 8 April; it can be read here.
Update from the Administrator 1 April 2011
I am pleased to be able to tell members and creditors that the Court has approved the process by which I will put a proposed Scheme of Arrangement to a vote. The proposed scheme is designed to facilitate the pay out of those sums provided by the Government and the Presbyterian Church in Ireland by way of financial assistance. I expect to be able to send the proposed scheme and voting papers to members and creditors next week. They will receive all the information necessary on which to make a decision to accept or reject the proposed scheme. If it is accepted, it will require to be sanctioned by the Court before payments can be made. At this stage it is not possible to be precise about timings, but all being well I hope to be in a position – if the scheme is approved – to process payments in late June/early July.
Update from the Administrator 5 February 2011
I am conscious that time is passing and I therefore wanted to update members/creditors. As you will be aware, the Northern Ireland Executive is working towards finalising the details of the package of assistance for members/creditors. Alongside that, I am currently in the process of preparing a Scheme of Arrangement which, following approval by the Court, will be put to members/creditors for their consideration and approval. I would hope to be able to present the proposed Scheme to members/creditors in March. It has been confirmed by the Northern Ireland Executive that the funds for the package of assistance will not be available to it until the next financial year beginning April 2011.
Update from the Administrator 21 December 2010
The Administrator’s progress report for the six months from 17 May 2010 to 16 November 2010 was posted to creditors and members on Friday 17 December. Because of adverse weather conditions and the volume of Christmas mail, it is possible that delivery of the report by post to some recipients might be slightly delayed. The report has now been uploaded to the website and is available here.
Update from the Administrator 30th November 2010
The Administrator has written to members/creditors to inform them of outcome of the process for electing a creditors’ committee. The letter is available here.
Update from the Administrator 20th October 2010
The Administrator has issued a statement in which he said he very much welcomed the announcement today by the Chancellor that funding was being made available to assist the PMS. He said: “I am acutely aware of the difficulties and distress that have been caused to many members of the Society over the past two years. Today’s announcement that funding is being provided for proposals put forward by the Northern Ireland Executive will provide the basis for a speedier return of capital to members/creditors than would otherwise have been possible through the Administration process. There are complex matters to be resolved in terms of how the funding will be applied and in due course I would plan to make a proposal to members/creditors for them to vote upon. The specifics of that proposal cannot be formulated until I have further details.”
Update from the Administrator 20th October 2010
Letters and voting forms are today being posted to members/creditors regarding the voting process referred to below. I regret the short delay in sending these letters which was caused by a dispute, now resolved, over the rejection of one nomination proposal. I am writing to all members/creditors but only those categories of creditors for which an election is required will receive voting papers. Those categories where an election is required are:
- Claims up to £46,000
- Claims between £187,001 and £425,000
Voting forms are required to be returned using the envelope provided by 5:00pm on Friday 19th November 2010.
Update from the Administrator 5th October 2010
Nomination process for Creditors’ Committee
The nomination process for the creditors’ committee closed at 5pm on Tuesday 31st August 2010. Any nomination forms received after this date were rejected. The relevant nominees have been informed .
A number of nomination forms received prior to the closing date for nominations were not completed correctly and have been rejected by the Administrator. The relevant nominees have been informed of this.
Where a nomination form has been completed correctly and submitted prior to the closing date, the Administrator has been liaising with the relevant nominee to confirm their successful nomination. The next stage of the process is to ask members/creditors to vote for one of the nominees in the following classes. As explained below, a vote will not be necessary in all classes.
Creditors with Original Claims above £425,001;
- Creditors with Original Claims between £187,001 to £425,000;
Creditors with Original Claims between £94,001 to £187,000;
- Creditors with Original Claims between £46,001 to £94,000;
Creditors with Original Claims between up to £46,000; and
The holders of shares only.
In respect of some of the classes, only one valid nomination was received and this nominee will be appointed to the creditors’ committee to represent that class without a vote having to take place. The Administrator will be writing to those within the affected classes within the next ten days.
Where a number of valid nominations have been received for a particular class, those within that class will be asked to vote for their representative on the creditor’s committee. The Administrator will writing to those within these classes, enclosing voting forms, within the next ten days.
Once the voting process is complete the Administrator will confirm who will represent each class on the creditors’ committee and then take steps to convene the first meeting.
The Administrator is aware that the Ministerial Working Group met on 8th September 2010 and 22nd September 2010 and he has seen the statements issued subsequent to those meetings by the Northern Ireland Office. The Administrator is continuing to work closely with officials on behalf of the Ministerial Working Group and will report further to members/creditors once he is in a position to do so. The Administrator understands that a further meeting of the Ministerial Working Group is due to take place within the next week.
Update from the Administrator 22 July 2010
Nominations to Creditors’ Committee – Further Guidance
The Administrator has issued further guidance on the process for nominations to the proposed Creditors’ Committee following feedback from some members/creditors. These notes should be read in conjunction with the information already provided on this subject in Section 9 of the Administrator’s Progress Report dated 15 June 2010 which is available on this website. Information on the role of the Creditors’ Committee is also contained in the ‘Questions to the Administrator’ section of the site.
- Some members/creditors, for reasons of privacy, are reluctant to state the amount of their claim on the nomination form. The Administrator has decided that in those circumstances it is sufficient for the person nominating someone for election to the committee - instead of inserting the amount of claim - to insert their certificate number/s which the Administrator can then verify against records to confirm the claim falls within the class of creditors, or the withdrawable shareholder group, for which the nomination is being made. The onus is on the nominees submitting a nomination to ensure that their nomination form is correctly completed, in particular that those persons supporting a particular nomination are within the correct class for voting.
- If the creditor/shareholder signing the nomination form holds a joint account with someone else, then both signatories to that joint account must sign the nomination form, and these signatures will be regarded as a single nomination.
- As regards the requirement to have ten other creditors nominate a candidate for election to the committee in each of the classes of creditor, this is a requirement of the directions from the High Court and the Administrator cannot vary that requirement.
- In January 2009 the Administrator obtained a court order to the effect that the details of monies paid into the Society and borrowings from the Society should not be disclosed by him. This was because of the desire for privacy expressed by members/creditors in respect of their holdings in the Society, a desire which has been reinforced by the feedback to this nomination process.
The Administrator recognises that this non-disclosure might cause some practical difficulties in seeking nominations to the creditors’ committee, which is one of the reasons why he has allowed an extended period of time for nominations to be put forward. In addition, a number of interest groups have come together to represent creditors and holders of withdrawable share capital and there are also informal networks between members through congregations, all of which he believes will enable those seeking nomination to gather the signatures required.
Update from the Administrator 18 June 2010
The Administrator has this week posted to members/creditors his six monthly progress report for the period 17 November 2009 to 16 May 2010. In the report he refers to the procedure for securing nominations to a creditors’ committee and he encloses with the report a nomination form. Anyone seeking nomination to the committee is advised to read the relevant section of the report carefully and to complete the nomination form as described. The report is available to download here.
Update from the Administrator 5 May 2010
The Administrator has today written to creditors of the Society declaring a first interim distribution of 12p in the £ and enclosing cheques. He is required to give creditors an indication of when a further dividend is expected to be paid. In the letter, the Administrator says he anticipates making a distribution at least annually to creditors and more frequently if he has sufficient monies available to do so. The Administrator points out that he is required to base this time-frame on the current position, even though the Northern Ireland Executive has outlined a package of financial assistance. At the time of writing, the Administrator expects it may be some time before the Northern Ireland Executive can obtain the necessary approvals it requires for its proposal to be put into effect. He cannot formally assess the implications for members/creditors until the details of an approved plan are presented to him.
In his letter to creditors, the Administrator says he will be writing separately to them regarding the procedure for establishing a creditors’ committee.
The Administrator’s six-monthly progress report for the period to 16 May 2010 will be sent to members/creditors in mid June.
Update from the Administrator 30 April 2010
The Administrator is pleased that he is now in a position to process and post cheques to creditors in respect of the first interim distribution of 12p in the £. Because of the Bank Holiday on Monday and a complex procedure for checking payments, posting will take place next Wednesday, slightly later than originally anticipated. Creditors should receive their cheques and an accompanying letter by the end of next week.
Update from the Administrator 14 April 2010
The Administrator is aware that members/creditors have questions about the impact of the proposed plan to assist creditors and to provide practical help to deal with the hardship experienced by small savers. While he very much welcomes any steps to ease the plight of savers, the current position is that there is, as yet, no agreed plan. The Administrator is not in a position to comment on speculation about a proposed plan. Only when a package of assistance is formally offered will the Administrator be able to assess the implications for members/creditors.
Update from the Administrator 30 March 2010
The First and Deputy First Minister have made a proposal to the Treasury to help savers in the PMS.
This will require approval from the Treasury and the Ministers are meeting the Prime Minister this week.
The Administrator has not been informed of the full details of the proposal but the First and Deputy First Minister have said in a statement that their plans will assist creditors and provide practical help to deal with the hardship experienced by small savers.
Any assistance which improves the position of members and creditors would be very welcome.
If the plan is approved, the Administrator will assess its implications and will advise members and creditors of the next steps as soon as possible.
Update from the Administrator 22 March 2010
I have now received the required permission of the Court to pay a first interim distribution to creditors. You will recall that on 12th February the High Court directed that those holding withdrawable share capital in the Society cannot be classified as creditors and, as a result, cannot receive a distribution until such time as creditors have been paid in full.
I have written to creditors giving formal notice of the intended distribution which will be 12p in the £. I aim to be in a position to make the distribution to creditors towards the end of April. I am also required by law to give notice by public advertisement in the newspapers. This notice is downloadable in pdf format here.
I have also written to shareholders regarding the details of the judge’s directions of February 12. I have asked the shareholders whether they had requested payment of their share capital prior to 25 October 2008 (the date on which the Society imposed the 21-day notice period on applications to withdraw shareholdings) and, if so, to provide me with details so I can assess whether or not they can be treated as a creditor.
On 18th March the Court provided directions on other matters as follows:
The period of the administration has been extended until 16th May 2011 and is renewable for twelve monthly periods thereafter, subject to the approval of the Court.
Given the nature of the Society's assets, an extension is necessary to facilitate an orderly wind down of the Society and to maximise the return to those who are owed money.
In relation to the set-off issue, I have been directed as to how this should be applied in the administration.
I will be writing to those creditors and members who also have borrowings with the Society separately in relation to this.
A process for constituting a creditor's committee which the Court was agreeable to has been approved.
I will seek nominations from representatives within certain classes of creditors and arrange for a postal vote so that a committee can be constituted. While shareholders are not strictly entitled to be on the creditor's committee, I will seek nominations from shareholders for one representative who will sit on the committee as an observer.
Subsequent to posting letters, I have been contacted by some members/creditors who were concerned that information they would regard as confidential was visible in the window of the envelope (i.e. the words “To all known …etc”). Having looked into this, I have discovered it occurred during the processing of letters by the mailing house. I will ensure the mistake is not repeated and that confidentiality is fully respected in future mailings.
Update from the Administrator 12 February 2010
The Administrator and his legal advisers are considering the judgement made today and will advise members/creditors of the implications in due course.
Update from the Administrator 28 January 2010
As members/creditors will know from my report to them in December, I have applied to the Court for directions on a number of matters. As I have said, I want as soon as possible to pay a first distribution of capital but I need the Court’s permission to do that. Also, because of the delay in the Government Working Group’s report on any possible alternatives, I have taken the precaution in case of a prolonged insolvency of seeking an extension of the administration for five years.
I have sought direction as to whether I should make a distribution to both share capital holders and loan capital holders and a direction on how set-off should be applied for those with borrowings from the society.
On January 27 and 28 the Court considered arguments on what it regards as the main matter of how holders of share capital should be treated in Administration. The Judge has reserved judgment for a period of two weeks.
When these matters are clarified, I am then obliged to give 28 days notice to those to whom I am directed by the Court to pay a distribution. Therefore the earliest I can envisage making a payment is March.
It has been impracticable for me to write to everyone with this update, which is why I am placing it on this website. I will endeavour to provide regular updates on progress, either through the website or by way of letter.