General questions
What is the legal status of Kaupthing?
Kaupthing entered moratorium proceedings on 24 November 2008 pursuant to chapters III-IV of the Bankruptcy Act, cf. also Act 129/2008 amending the Act on Financial Undertakings no 161/2002.
Following a ruling of the District Court of Reykjavik on 22 November 2010, Kaupthing formally entered winding-up proceedings. Icelandic law provides for automatic end of the moratorium period upon entering into winding-up proceedings. Because of the legislative amendments by way of Act 44/2009, there is only a negligible difference in legislation applying to Kaupthing whether in moratorium or winding-up proceedings. The end of the moratorium has therefore not affected the operations of Kaupthing. Indeed, for creditors and counterparties, the change should hardly be noticeable.
The Resolution Committee and Winding-up Committee jointly applied to the District Court of Reykjavik to formally recognize that Kaupthing is in a winding-up proceedings. This was done in order to ensure that the estate continues to enjoy the same protections from litigation, collection measures and other depletion of assets as it has had during the moratorium.
The Resolution Committee shall continue to hold the powers of the board of directors as well as the powers of Kaupthing's shareholders' meeting. The Resolution Committee shall continue to manage the interests of the estate with the same aim as before to maximise the value of assets. That includes waiting for the maturity of assets if deemed beneficial rather than disposing of them immediately. The role and duties of the Resolution Committee are laid down in the Act on Financial Undertakings, no. 161/2002, as amended by Act no. 44/2009 and subsequent amendments, also the Act no. 21/1991 on Bankruptcy etc.
On 10 June 2011, the Icelandic parliament passed an amendment to Act on Financial Undertakings. Changes put in place through the new bill include that the Resolution Committee will be dissolved from 1 January 2012. The Winding-up Committee is to take over respective tasks currently done by the Resolution Committee. Further information on this amendment can be found in chapter 4.2 The winding-up proceedings and applicable legislation in the Creditors' Report.
Following a ruling of the District Court of Reykjavik on 22 November 2010, Kaupthing formally entered winding-up proceedings. Icelandic law provides for automatic end of the moratorium period upon entering into winding-up proceedings. Because of the legislative amendments by way of Act 44/2009, there is only a negligible difference in legislation applying to Kaupthing whether in moratorium or winding-up proceedings. The end of the moratorium has therefore not affected the operations of Kaupthing. Indeed, for creditors and counterparties, the change should hardly be noticeable.
The Resolution Committee and Winding-up Committee jointly applied to the District Court of Reykjavik to formally recognize that Kaupthing is in a winding-up proceedings. This was done in order to ensure that the estate continues to enjoy the same protections from litigation, collection measures and other depletion of assets as it has had during the moratorium.
The Resolution Committee shall continue to hold the powers of the board of directors as well as the powers of Kaupthing's shareholders' meeting. The Resolution Committee shall continue to manage the interests of the estate with the same aim as before to maximise the value of assets. That includes waiting for the maturity of assets if deemed beneficial rather than disposing of them immediately. The role and duties of the Resolution Committee are laid down in the Act on Financial Undertakings, no. 161/2002, as amended by Act no. 44/2009 and subsequent amendments, also the Act no. 21/1991 on Bankruptcy etc.
On 10 June 2011, the Icelandic parliament passed an amendment to Act on Financial Undertakings. Changes put in place through the new bill include that the Resolution Committee will be dissolved from 1 January 2012. The Winding-up Committee is to take over respective tasks currently done by the Resolution Committee. Further information on this amendment can be found in chapter 4.2 The winding-up proceedings and applicable legislation in the Creditors' Report.
What is the scope of Kaupthing's operations?
Kaupthing's collapse in October 2008 is one of the largest bankruptcies in the history and at its collapse the bank had operations in 15 countries. The scope of Kaupthing's operations is, therefore, large and the valuation of Kaupthing‘s assets as at H1 2011 amounted to ISK 1.040bn.
Why has a Resolution Committee been appointed to manage the affairs of Kaupthing?
On 9 October 2008 Kaupthing Bank’s board of directors resigned on its own initiative due to the bank’s financial difficulties and a Resolution Committee was appointed for Kaupthing by the FME in accordance with Act no. 125/2008 on the Authority for Treasury Disbursements due to Unusual Financial Market Circumstances etc. (the "Disbursement Act") passed in reaction to the collapse of the banking system in Iceland.
The Resolution Committee immediately assumed control of the estate and wields all the authority of Kaupthing's board of directors. The role and duties of the Resolution Committee are laid down in the Act on Financial Undertakings (Act no. 161/2002, as amended by Act no. 44/2009). According to the Act on Financial Undertakings the Resolution Committee was appointed over Kaupthing to manage its operations, including supervising the handling of all its assets and conducting its business operations. The Resolution Committee holds the powers of the Board, is responsible for the estate's daily operations and shares the creditors’ desire to maximize the value of Kaupthing's assets and recognizes that this may take a significant amount of time to achieve. Therefore, the Resolution Committee has from the outset focused on maintaining and safeguarding the assets of the estate with the aim of ensuring as high recovery rate of claims as possible.
The Resolution Committee immediately assumed control of the estate and wields all the authority of Kaupthing's board of directors. The role and duties of the Resolution Committee are laid down in the Act on Financial Undertakings (Act no. 161/2002, as amended by Act no. 44/2009). According to the Act on Financial Undertakings the Resolution Committee was appointed over Kaupthing to manage its operations, including supervising the handling of all its assets and conducting its business operations. The Resolution Committee holds the powers of the Board, is responsible for the estate's daily operations and shares the creditors’ desire to maximize the value of Kaupthing's assets and recognizes that this may take a significant amount of time to achieve. Therefore, the Resolution Committee has from the outset focused on maintaining and safeguarding the assets of the estate with the aim of ensuring as high recovery rate of claims as possible.
What are the Resolution Committee‘s principal objectives and under what legislation is its role laid down?
The role and duties of the Resolution Committee are laid down in the Act on Financial Undertakings, no. 161/2002, as amended by Act no. 44/2009 and subsequent amendments, (“Act on Financial Undertakings”), also the Act no. 21/1991 on Bankruptcy etc. (the “Bankruptcy Act”). According to Act no. 44/2009 the Resolution Committee was given power by law to represent Kaupthing in all matters, safeguard its interests and maximise asset value. The provisions of articles 102 and 103 of the Act on Financial Undertakings clearly state that the Resolution Committee has a legal obligation to maximise the value of Kaupthing's assets and preserving the interests of the creditor body as a whole.
What were the initial tasks of the Resolution Committee?
At the inception, the Resolution Committee had the objectives to maintain Kaupthing's commercial banking operation in Iceland, to ensure cash flow in all currencies both domestically and to/from foreign jurisdictions and to protect depositors in accordance with the Disbursement Act. Further information on the Resolution Committee’s initial tasks can be found in appendix A5 Initial tasks of the ResCom of the Creditors’ Report.
Why was a Winding-up Committee appointed?
On 25 May 2009, in accordance with a request from Kaupthing's Resolution Committee, the District Court of Reykjavik appointed a Winding-up Committee for Kaupthing in accordance with the recent amendments to the Act on Financial Undertakings.
The appointment of the Winding-up Committee allowed the formal process of filing claims to begin, while Kaupthing's Resolution Committee continues to perform its role of safeguarding the estate's assets in order to ensure that as much as possible is received for claims.
The appointment of the Winding-up Committee allowed the formal process of filing claims to begin, while Kaupthing's Resolution Committee continues to perform its role of safeguarding the estate's assets in order to ensure that as much as possible is received for claims.
What is the role of the Winding-up Committee?
On 25 May 2009, in accordance with a request from the Resolution Committee, the District Court of Reykjavik appointed a Winding-up Committee for Kaupthing in accordance with latest amendments to the Act on Financial Undertakings.
The Winding-up Committee does not hold any power over the Resolution Committee or vice-versa. Both are however committed to work together in the best interests of Kaupthing and its creditors. The role of the Winding-up Committee is to, among other things, call upon any creditors who have a claim against Kaupthing and take a position regarding their recognition. The Winding-up Committee oversees the call for claims and has set the deadline for filing claims which is 30 December 2009. The Winding-up Committee makes a register of filed claims and decides how they are ranked in the order of priority of payment of claims.
The Winding-up Committee does not hold any power over the Resolution Committee or vice-versa. Both are however committed to work together in the best interests of Kaupthing and its creditors. The role of the Winding-up Committee is to, among other things, call upon any creditors who have a claim against Kaupthing and take a position regarding their recognition. The Winding-up Committee oversees the call for claims and has set the deadline for filing claims which is 30 December 2009. The Winding-up Committee makes a register of filed claims and decides how they are ranked in the order of priority of payment of claims.
What is the difference between the Resolution Committee and the Winding-up Committee?
The Resolution Committee and the Winding-up Committee jointly direct the Bank’s affairs, cf. the divisions of tasks provided for in Points 3 and 4 of Temporary Provision V of the Act on Financial Undertakings.
In short, the Resolution Committee is responsible for the asset side of the Bank and its daily operation, but the Winding-up Committee administers the formal process of filing claims, handles all claims against the Bank and makes decisions regarding their recognition.
In short, the Resolution Committee is responsible for the asset side of the Bank and its daily operation, but the Winding-up Committee administers the formal process of filing claims, handles all claims against the Bank and makes decisions regarding their recognition.
What is a Creditors’ Meeting?
The Winding-up Committee convenes a Creditors’ Meeting to discuss the list of claims and to give a general overview of its decisions on claims insofar as it is available. Claims, on which decisions have been postponed, are not a subject of discussion in the meeting.
The Winding-up Committee’s overview of its decision on claims will also be published in a report that will be made available at the meeting and, after the meeting, on Kaupthing's secure website for creditors.
If it proves impossible to conclude decisions prior to the creditor’s meeting on all claims submitted, due to the scope and number of claims, the Winding-up Committee may convene follow-up meetings to conclude the process.
The Winding-up Committee’s overview of its decision on claims will also be published in a report that will be made available at the meeting and, after the meeting, on Kaupthing's secure website for creditors.
If it proves impossible to conclude decisions prior to the creditor’s meeting on all claims submitted, due to the scope and number of claims, the Winding-up Committee may convene follow-up meetings to conclude the process.
Who may attend the Creditors’ Meeting?
Only creditors who have filed a claim against Kaupthing or their authorized representative are entitled to attend the Creditors’ Meeting.
An attorney or agent may attend the meeting on behalf of a creditor if they bring proof that they are entitled to represent him/her at the meeting.
An attorney or agent may attend the meeting on behalf of a creditor if they bring proof that they are entitled to represent him/her at the meeting.
What information is available to creditors?
The ResCom and the employees of the estate have from the outset carried out ambitious and extensive disclosure to all creditors. In fact, information available for creditors is far beyond any legal obligation to do so and it is the estate's opinion that disclosure is more extensive than could be expected from most banks in similar position. The estate is determined to maintain this comprehensive information disclosure to all creditors.
Kaupthing will continue to inform creditors through the Creditors' Report, Kaupthing's website and various creditors' meetings. In addition creditors are invited to direct any general questions they may have to a specific e-mail addresses. General questions pertaining to Kaupthing's general operation should be sent to creditorcontact@kaupthing.com. Questions to the Winding-up Committee regarding claims and the claiming process should be sent to: winding-up@kaupthing.com.
More information regarding communication with creditors can be found in chapter 4.8 Creditor Relations of the Creditors' Report.
Kaupthing will continue to inform creditors through the Creditors' Report, Kaupthing's website and various creditors' meetings. In addition creditors are invited to direct any general questions they may have to a specific e-mail addresses. General questions pertaining to Kaupthing's general operation should be sent to creditorcontact@kaupthing.com. Questions to the Winding-up Committee regarding claims and the claiming process should be sent to: winding-up@kaupthing.com.
More information regarding communication with creditors can be found in chapter 4.8 Creditor Relations of the Creditors' Report.
Who should I contact if I have further questions?
Further questions can be sent to the e-mail address: creditorcontact@kaupthing.com
Questions regarding claims and the claiming process should be sent to: winding-up@kaupthing.com
Questions regarding claims and the claiming process should be sent to: winding-up@kaupthing.com
Disclaimer: This information is for informational purposes only and shall not be made legally binding towards Kaupthing hf., the Resolution Committee or the Winding-up Committee. Please note the terms of the general disclaimer governing use of this website and the information contained on the website.