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March 15, 1999
INFORMATION
UPDATE TO CREDITORS OF FIRST CAYMAN BANK LTD.
(IN LIQUIDATION)
We
write to advise that during the period since
our last notice in September 1998, the Liquidators
have continued their work in realizing the
assets of the bank and verifying the amounts
due to creditors. There have been no developments
which lead the Liquidators to depart from
their previous estimate of a potential dividend
rate in the range of 45% to 55%, although
this is dependent on the outcome of future
events.
We
understand that depositors may be concerned
about the lack of detailed information available.
However, the nature of the Liquidators’
appointment and the scope of our work means
that no detailed disclosure can be made either
of actions in progress or those that are contemplated.
To make such disclosure would be prejudicial
to the outcome of the actions.
The
Liquidators appreciate that the primary concern
of creditors is the timing and amount of any
future dividend payments, but must advise
that several key events are prerequisites
of any interim payment to creditors. The Liquidators
have undertaken extensive investigations of
various third parties who may have either
contributed to the Bank’s losses or
who may have received benefits through fraudulent
activities. We have obtained preliminary legal
advice as to whether the Liquidators can pursue
any third parties for their involvement in
these losses. As a result, the Liquidators
have initiated legal action against certain
parties for damages suffered by the Bank.
The outcome of these actions, which is largely
dependent upon the position taken by third
parties, must be substantially resolved before
a distribution to creditors can be made.
The
Liquidators believe that the resolution of
the above mentioned issues should provide
sufficient funds to declare an interim dividend.
Once we have established the timing and amount
of the first interim distribution, we will
advise all creditors accordingly.
The
Liquidators intend to distribute funds to
depositors by United States dollar cheques
drawn on a United States bank or a local bank,
depending on the country of residency of the
depositor. For example, if you have provided
the Liquidators with a local address (i.e.
Grand Cayman), you will receive a US$ cheque
drawn on a local bank. Similarly, if you have
provided the Liquidators with a foreign address
(i.e. not an address in Grand Cayman), you
will be mailed a US$ cheque drawn on a United
States bank. All cheques will be mailed to
the address where previous correspondence
has been sent. As you can appreciate, the
distribution of payments to over 3,000 creditors
is an administratively cumbersome undertaking,
and in this regard, we regret that we are
not in a position to vary the method of payment.
If
you have any questions regarding the dividend
process, or any other aspect of the liquidation,
please do not hesitate to contact Margot MacInnis
or the undersigned at (345) 949-5266.
Sincerely,
Michael W. Pilling
Joint Official Liquidator
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