Iceland Traps Hedge Funds in Refusal to Discuss Bank Claims

2014-01-23 (All day)

More than five years after its biggest banks defaulted on $85 billion, Iceland’s government is refusing to speak to the hedge funds and other creditors that are still trying to get their claims paid out.

The island, which the International Monetary Fund has held up as a model for crisis management, says addressing the needs of bond investors in Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf isn’t its concern. Instead, Prime Minister Sigmundur D. Gunnlaugsson says he’ll fight to ensure any steps taken protect the nation’s financial markets.

Creditors, represented through winding-up committees, want the government to let them sidestep currency controls that were created back in 2008, when Iceland was hemorrhaging capital. Gunnlaugsson says such a settlement isn’t viable. ...

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Iceland Loses Patience as Bank Creditor Settlements Drag On

2014-01-13 (All day)

Iceland is losing patience with creditors in its failed banks as the government considers forcing through bankruptcy proceedings to help it exit capital control in place since 2008.

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Kaupthing Rejects Krona Asset Writedowns Sought by Government

2013-09-24 23

The caretakers of Kaupthing Bank hf won’t ask creditors in the failed lender to accept writedowns on their krona-denominated claims, a step the government says is necessary to end the island’s capital controls.

“The winding up committee is obliged by law to preserve the value of Kaupthing’s assets,” Johannes Runar Johannsson, a member of Kaupthing’s winding-up committee, said in an interview last week in London. “It’s therefore difficult, or even impossible, to see how the winding-up committee could make such a recommendation, given its legal duties.”

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