To enable Landsbanki to continue to be
operated over the medium term, Landsbanki has sought and obtained a
Moratorium under Icelandic Act No. 161/2002 on Financial Undertakings
(which it is expected will be recognised throughout the member states
of the European Union and the European Economic Area (the "EEA") under
the provisions of the European Directive on Reorganisation and Winding
Up of Credit Institutions). The main effect of the moratorium will be
that creditors will be prevented from bringing enforcement proceedings
against Landsbanki. The court has appointed Mr. Kristinn Bjarnason, a
Supreme Court attorney to act as the assistant in relation to the
Moratorium.
Additional information regarding the recently passed
Icelandic legislation (including an English translation) is available
on the FME's website at www.fme.is.
In relation to jurisdictions outside the EEA where it has material
assets, Landsbanki will take whatever action it can to seek recognition
of the Moratorium. This includes filing for Chapter 15 protection in
the United States.
In relation to the London branch, this is not
a separate legal entity but is a division of Landsbanki. The current
operations of the London branch and the powers given to local
management of the branch to deal with its customers and vendors will
remain in effect following the Moratorium. Assets of Landsbanki in the
UK are subject to a freezing order from HM Treasury but the London
branch has subsequently been granted licenses to operate its business
by HM Treasury. Neither the freezing order nor such licenses will be
affected by the Moratorium and the London branch will continue to be
able operate in the ordinary course of its current business under such
licenses in the same way it did prior to the Moratorium.
None of
these developments have any impact on the current operations of
Landsbanki. During the Moratorium, which may continue for a period of
up to 24 months, the Resolution Committee of Landsbanki will continue
to operate as it has been and will endeavor to protect and maximize the
value of the bank's assets and evaluate restructuring alternatives that
will further the Resolution Committee's objectives.
For the
avoidance of doubt, the Moratorium has no effect on NBI hf. which
assumed the domestic Icelandic operations of Landsbanki on October 9,
2008.