Handling of Claims against Landsbanki Íslands hf.
1. The entry into force of Act No. 44/2009, amending Act No. 161/2002, on Financial Undertakings, as subsequently amended, makes it possible to begin the process of lodging claims against Landsbanki Íslands hf.
2. On 29 April 2009 the Reykjavík District Court appointed a Winding-up Board for Landsbanki Íslands hf., in accordance with a request from the bank's Resolution Committee. The Winding-up Board invites creditors to lodge claims against the bank, prepares a record of claims submitted and convenes creditors' meetings concerning the claims and decisions on their recognition.
3. The Winding-up Board of Landsbanki Íslands is comprised of Supreme Court Attorney Kristinn Bjarnason, who is also the Appointee for the bank's moratorium, Supreme Court Attorney Halldór H. Backman and Supreme Court Attorney Herdís Hallmarsdóttir.
4. On 30 April 2009 the Winding-up Board issued a notice inviting creditors of Landsbanki Íslands hf. to lodge their claims, which was published in the Legal Gazette (Lögbirtingarblaðið) in Iceland that same day. This date marks the beginning of the time limit for lodging claims, regardless of where creditors are domiciled. The time limit for lodging claims is six months, and claims must be received before midnight on 30 October 2009.
5. The notice to creditors will be published in daily newspapers abroad in those countries where the bank's creditors are thought to be domiciled. The notice will also be published in the Official Journal of the European Union.
6. Known creditors of Landsbanki Íslands hf. will be sent a special notice to the effect that lodging of claims has begun, when the time limit for lodging claims expires and what the consequences may be for claims not lodged by the end of the time limit.
7. Claims lodged against Landsbanki Íslands hf. must be addressed to the bank at Austurstræti 16, 101 Reykjavík.
8. A creditor from a member state of the European Economic Area or the European Free Trade Association may submit claims in a language of that state. Such claims submissions must be accompanied by an Icelandic translation; claims may be submitted in English without an accompanying translation. Other creditors may submit their claims in Icelandic or English. If the documentation accompanying a claim submitted is in a language other than Icelandic or English, a translation into either of these languages must be included.
9. Art. 117 of Act No. 21/1991, on Bankruptcy etc., shall apply concerning the form and content of claims lodged against Landsbanki Íslands hf.
There is no requirement that a claim be presented in a pre-defined format, but it must fulfil the following conditions:
a. Claims must be submitted in writing.
b. It must be clearly indicated who the creditor is.
c. Claims must be presented clearly and comprehensively.
d. The amount of a monetary claim must be stated in the currency of the claim concerned and a breakdown provided of the principal, interest and cost.
e. If the claim concerns the delivery of a specific object, this must be described in as much detail as possible.
f. A claim concerning a decision on specific rights or release from a specific obligation must include a detailed description of the rights or obligation concerned.
g. The claimant must state what priority it demands for its claim in the ranking of claims, as provided for in Chapter XVII of Act No. 21/1991.
h. The claims submission must include the circumstances of the case upon which the creditor bases its claim, as well as other aspects which must be explained due to the context.
i. A claim must be accompanied by documentation substantiating the claim.
10. A creditor may request a confirmation that its claim has been received.
11. Claims lodged against Landsbanki Íslands hf. shall have the same legal effect as a suit brought against the bank from the moment they are received by the bank.
12. If a claim is not lodged against Landsbanki Íslands hf. within the time limit for so doing, it will be cancelled against the bank, unless specific exceptions apply as referred to in Art. 118 of Act No. 21/1991.
13. The Winding-up Board shall prepare a record of claims submitted, including at least the following details:
a. a decision on whether and, if so, how it deems that each claim submitted should be recognised;
b. the substance of each claim, its amount, if applicable, and the priority demanded for the claim in ranking.
14. No decision need be taken on claims if it is deemed certain that they will not result in any disbursement at all upon liquidation.
15. A record of claims submitted must be available no later than one week prior to the first creditors' meeting held to discuss the record of claims.
16. If a claim is not fully recognised as submitted, the creditor must be notified thereof no later than one week prior to the creditors' meeting.
17. A decision need not have been taken on all claims lodged when the first creditors' meeting is held, but all creditors shall be invited to the second creditors' meeting where the decision of the Winding-up Board on the claims will be presented.
18. The first creditors' meeting to discuss claims submitted will be held at Hilton Reykjavík Nordica, Suðurlandsbraut 4, Reykjavík, on Monday, 23 November 2009, at 9:00 am.
19. Those parties who have lodged claims against Landsbanki Íslands hf. and their agents are entitled to attend the meeting.
20. At this creditors' meeting the Winding-up Board will present and account for the record of claims and claims submitted, together with any objections which may have been received prior to the meeting.
21. Creditors may submit written objections to a decision by the Winding-up Board prior to the creditors' meeting which will be entered in the minutes even if no representative attends the meeting on their behalf.
22. A creditor may object to the decision of the Winding-up Board on its claim at the creditors' meeting.
23. A creditor may object to a decision by the Winding-up Board in recognising a claim made by another creditor, provided the outcome concerning this claim affects the interests of the party raising the objection.
24. Insofar as no written objections are made prior to a creditors' meeting, nor at the meeting itself, with the decision of the Winding-up Board, its decision on the claim will be final.
25. If a dispute concerning a claim cannot be resolved at the creditors' meeting where it is first discussed, a special meeting shall be held to attempt to resolve the dispute concerning the claim.
26. If the dispute concerning the claim cannot be resolved, the Winding-up Board shall refer the case to an Icelandic court for resolution, regardless of the creditor's domicile.
27. Disputes concerning claims lodged against Landsbanki Íslands hf. shall be brought before the Reykjavík District Court.
28. A ruling by the Reykjavík District Court on a dispute concerning claims may generally be appealed to the Supreme Court of Iceland.
29. As disputes on claims submitted are heard in accordance with special rules of Act No. 21/1991 on bankruptcy etc., the length of time until a judgement is passed is relatively short. A ruling by the District Court could be pronounced within 3-4 months from the time a case is submitted and judgement from the Supreme Court can be expected 2-3 months after the District Court's ruling. If this proves to be the case, the final result of disputed cases which can be referred to courts following the first creditors' meeting on 23 November 2009 could be available 3-7 months after the meeting. Attention is drawn to the fact, however, that the speed of court action in such cases is for the most part beyond the control of the Winding-up Board.
30. Following the conclusion of the first creditors' meeting held after the expiry of the time limit for lodging claims, the winding up Board may pay recognised claims, in full or in part, in one or more payments, to the extent that it is ensured that assets are sufficient to cover a payment of at least as much to all other claims with the same priority of rank which have not been finally rejected.
31. The legislation concerning handling of claims against Landsbanki Íslands hf. will be made available on the web pages of the Winding-up Board on the Landsbanki Íslands hf. website, www.lbi.is.
32. The Winding-up Board will make public more detailed information on handling of claims and its progress on the bank's website.