Status and fulfilment of the Composition Agreement – payment instructions to be provided
The Composition Agreement for LBI hf. became binding upon the end of the time limit to appeal according to Article 59 of the Act on Bankruptcy etc. No. 21/1991 on 25 December 2015. At the same time the winding-up proceedings were formally concluded. The operation and activities of LBI hf. are hence conducted in line with the Composition Agreement. The Winding-up Board will remain as the board of the company, retain the authority of the shareholders´ meeting and administer the fulfilment of the Composition Agreement until such time a new board is elected for the company. During this period Article 101, paragraph four, of the Act on Financial Undertakings No. 161/2002 applies to the Winding-up Board.
The Winding-up Board anticipates that a shareholders’ meeting where a new board is elected will take place either late in 1st quarter or early in the 2nd quarter of this year. For further information regarding the expected timeline of fulfilment of the Composition Agreement reference is made to the Information Memorandum which was published in an updated form along with the Composition Proposal on 6 November 2015.
Final settlement of accepted claims with priority ranking according to Article 112 of the Act on Bankruptcy etc. No. 21/1991 was executed on 11 January, the same date as the exemption from the capital controls under Act No. 87/1992 was issued by the Central Bank of Iceland. Work is under way to prepare fulfilment of unsecured claims according to Article 113 of the Act on Bankruptcy etc. No. 21/1991 in accordance with the Composition Agreement.
All creditors entitled to receive the de minimis payment in accordance with the Composition Agreement will have to provide valid payment instructions for euros. The lack of such instructions will result in the respective payment being deposited into an escrow account, until valid instructions have been received and the company can execute payment. During the course of the next few days the creditors in question will be sent a notice containing further information on the form of payment instructions and documents to submit. As of the same time creditors which have received individual login credentials for the web portal https://composition.lbi.is will be able to submit the relevant information and documents electronically through that web portal.
Creditors that are entitled to a proportion of the share capital and bonds issued according to the Composition Agreement, in addition to the de minimis payment,will have to provide information in addition to the payment instructions. Further details will be provided in due course.