News announcement from LBI hf. - Creditors Meeting

The Winding-up Board of LBI held a Creditors' Meeting today, 2 October 2013.

At this meeting the Winding-up Board presented information to creditors on the estimated value of LBI's asset portfolio as of 30 June this year (end of Q2).

According to these figures, the estimated value of LBI's assets increased by the equivalent of ISK 24 billion in Q2, of which around ISK 5.9 billion can be attributed to exchange rate movements.

Including the three first interim distributions which have been made, equivalent to around ISK 648 billion, LBI's estimated recoveries as of the end of Q2 were equivalent to over ISK 1,531 billion.  The total estimated value of LBI's assets has therefore increased by the equivalent of ISK 431 billion during the period from 30 April 2009 until the end of Q2 2013.

It could be mentioned that estimated recoveries as of the end of Q2 are equivalent to around ISK 206 billion higher than the amount of recognised priority claims in the winding-up proceedings.

The Winding-up Board informed creditors that it had agreed to a request from Landsbankinn hf. to commence discussions on possible adjustments to the settlement agreement of December 2009.

A fourth distribution to priority creditors, equivalent to ISK 67.2 billion, which was disbursed on 12 September this year, was also discussed.

At this meeting, creditors were given an account of the judgement by the Supreme Court of Iceland in case no. 553/2013, which prescribes finally for the value of partial payments in foreign currencies to be calculated from their ISK equivalent using the ISK exchange rate against the respective currencies on the date the partial payment is made and not the exchange rate on the date winding-up proceedings commenced, 22 April 2009. This judgement resolves the legal dispute as to the method of calculation to be used when making interim distributions in foreign currencies. In other respects the judgement does not result in changes in LBI's winding-up proceedings.

The significance of the Supreme Court's judgement is that those partial payments which have already been made to creditors now comprise around 53.9% of priority claims in the winding-up proceedings rather than 55%, as was the result of the previous method of calculation.

Páll Benediktsson, spokesman for LBI hf. pallb@lbi.is

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