Winding-up Proceedings

Landsbanki Íslands hf. is currently in winding-up pursuant to the rules of section B of chapter XII of Act on Financial Undertakings no. 161/2002 with amendments. The winding-up is based on the ruling of the District Court of Reykjavík of 22 November 2010. With the ruling the bank’s moratorium ended automatically. Pursuant to item 2 of temporary provision V of the Act on Financial Undertakings all that was done during the bank’s moratorium from the adoption of Act no. 44/2009, i.e. from 22 April 2009. Among the items in question are the appointments of Winding-up Boards and the division of tasks that was between Winding-up boards and Resolution Committees. To the extent that the priority of claims and other legal effects are generally decided by the day on which a ruling on winding-up is issued it shall be based on the day the aforementioned Act came in effect in the case of the failed banks. In the aforementioned manner it was ensured that the process which began in 2008 has continued as a continuous measure, under the power of the courts and the government respectively, as has been done. Legal amendments which have been adopted from October 2008 aim towards this and not least to ensure the interests and equality of the creditors of the failed banks.

Landsbanki Íslands hf. was granted authority for a special moratorium in accordance to the provisions of Act no. 129/2008 on 5 December 2008 with a ruling of the District Court of Reykjavík. At the same time the engagement of the bank’s Appointee in moratorium was approved. The bank’s authority for moratorium was extended with rulings of the District Court of Reykjavík on 3 March 2009, 27 November 2009 and 31 August 2010. As was previously stated the authority for moratorium was cancelled with the court’s ruling on taking the bank for winding-up pursuant to general rules on 22 November 2010. At the same time the position of an Appointee in moratorium was disbanded but he who served that role retained his position in the Winding-up Board.

From 22 April 2009 and the adoption of Act no. 44/2009, the material rules of the moratorium were based on the framework of winding-up in several important aspects. As a result there was no real material change at the end of moratorium and the beginning of winding-up on the bank’s legal status. The same rules of law still applied to all the relevant issues of the bank, including the status of creditors, processing of claims, disposal of interests and the end of winding-up. This of course entails that all the provisions of the Act on Bankruptcy etc. no. 21/1991 which are referred to in the relevant provisions of the Act on Financial Undertakings still apply. The Resolution Committee of Landsbanki Íslands hf. was disbanded at the end of year 2011 pursuant to Art. 8 of Act no. 78/2011 on amending the Act on Financial Undertakings no. 161/2002 and its tasks were transferred to the Winding-up. The work and positions of those who were in the Resolution Committee and those who are in the Winding-up Board are subject to the same rules as apply to liquidators pursuant to the Act on Bankruptcy etc. no. 21/1991.

The members of a Winding-up Board are official administrators in their work. They are obligated to observe the law in all regards and guard the interests of the estate in all ways.

It is should be emphasised that the rules on protection from collection- and enforcement actions of specific creditors remain unchanged and there are no changes to the claims procedure and any sort of processing of the claims against the bank which were lodged following the notice to creditors issued buy the Winding-up Board.

The winding-up of Landsbanki Íslands hf. is in accordance to the European Directive on the winding-up of financial undertakings (2001/24/EC) and is as such automatically recognised within the EEA. On further treatment reference can be made to Art. 9-18 of the Directive