Kaupthing hf Creditors' Report April 2014

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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Posted: Fri, 11/04/2014 - 20:59

The Kaupthing hf Winding-up Committee has just released its (64-page) Creditors' Report, presented to the creditors' meeting on April 10th.

The Address from the WuC begins:

Right from the beginning, Kaupthing’s Winding-up Committee has placed emphasis on ending the winding-up proceedings as soon as realistically achievable and to effect distributions to creditors without undue delay. Our creditors have indicated that implementation of a composition proposal is the preferred route to achieve distributions. The other route would be to make distributions once Kaupthing has entered bankruptcy proceedings.

However, because of the currency controls in effect in Iceland, Kaupthing needs an exemption from the currency controls granted by the Central Bank, after consultation with the Minister of Finance, to make any distributions to unsecured creditors domiciled outside of Iceland. It is therefore not in the power of the Winding-up Committee to conclude the winding-up proceedings without the involvement of the Central Bank and the government.

In accordance with the above, Kaupthing’s Winding-up Committee requested an exemption from capital controls in October 2012 to create the necessary basis for presenting a composition proposal to its creditors, thereby concluding Kaupthing’s winding-up proceedings. The Company’s goal was to tailor the application, to the extent possible, to the requirements of the Central Bank as those were perceived at the time when the application was submitted. The application was structured to deal first with the distribution of non-krona assets and postpone any subsequent decisions on the distribution of krona assets. This was almost 18 months ago but Kaupthing has not received a substantive reply yet.

A table on page 51 confirms that the (quantum of the) claims of both KSFIOM and KSFUK remain in dispute and shows their status as "Mediation process". More details of the current status of the KSFIOM claim are given on page 55:

Kaupthing Singer and Friedlander Isle of Man Ltd. v. Kaupthing hf.
In a judgement of 10 June 2011 in case no. 201/2011, the Supreme Court of Iceland upheld the validity of the parental guarantee given by Kaupthing hf. to its subsidiary, Kaupthing Singer and Friedlander Isle of Man Ltd. (“KSFIOM”). The dispute on the outstanding amount under the parental guarantee remained however before the District Court of Reykjavik in case no. X-47/2010. The District Court case was reopened in 2012 but withdrawn by consent of both parties in 2013, after KSFIOM amended and reduced its claim amount from ISK 88.5 billion (pound sterling 463.2 million) to ISK 16.2 billion (pound sterling 85 million), based on KSFIOM’s updated recovery estimates since the claim against the Company was initially lodged. It should be noted that there is still a dispute and uncertainty as to the outstanding amount under the guarantee which will largely depend on the final shortfall in the on-going liquidation of KSFIOM.

The full report can be found on the Khf website: http://www.kaupthing.com/home/announcements/all-announcements/2014/04/11...

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Recent developments?

  • jetski
  • 10/10/08 31/05/09
  • a depositor
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  • Sun, 11/05/2014 - 10:50

Hi, everyone,
I have been seriously ill since last November and haven't been able to log onto this site and keep up with developments. Can anyone kindly give me a brief review of events over the last 6 months, payments made, payments due, forecasts and the Lighthouse case etc. Any help or information would be gratefully appreciated .Thanks vey much, Regards Jetski


@jetski

  • anrigaut
  • 19/10/08 30/10/09
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  • Sun, 11/05/2014 - 12:37

Hi Jetski,

Sorry to hear you've been seriously ill and hope you are now recovering well.

You haven't missed much on the KSFIOM front. Not surprisingly at this stage of the liquidation, with few loans now oustanding (and likely to be problematic), recovery has slowed considerably. As a result, there has been no dividend paid since June 2013 and no firm date yet for the next one, but the JLs have announced that they hope to be able to pay a further dividend " in the region of 2p in the £ to creditors during 2014".

The KSFIOM 6-monthly Progress Report to 9 Jan 2014 was issued on 20 February and the main points and link to the report are posted here: http://www.ksfiomdag.com/index.php?option=com_content&view=article&id=13...

The estimated outcome is almost unchanged at between 98.6p and 99.2p in the £.

Since January, a further 4 loan facilities have been repaid in full, realising around £3.2m. As of 31 March 2014, 11 loan facilities totalling around £31m remain outstanding, all due to be paid in 2014.

The Lighthouse case was finally settled out of court prior to the appeal hearing which had been set for October. Mike Simpson has confirmed that the matter is definitely closed, that there will be no further legal action and that the bank recovered "all amounts owing".

I hope that helps to update you.

Best regards,
Anrigaut


update

  • jetski
  • 10/10/08 31/05/09
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  • Sun, 11/05/2014 - 15:02

Thanks for the comprehensive update Anrigaut. It's much appreciated.


Recent Report

  • Wombat761
  • 30/01/09 20/03/15
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  • Wed, 30/04/2014 - 06:12

Thanks, Anrigaut for your usually helpful data

Best Wishes


To Anrigaut

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
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  • Tue, 15/04/2014 - 21:25

Hi There Anrigaut,

Just on to thank you again for the important and valid information you have posted re the Kaupthing hf Progress Report and also re the news that our JLs have issued their March 2014 figures.

Sadly there appears to be no further movement re any repayments or agreement re our JLs modified claim. Would be nice to know if the £85m includes interest due.

Also noted when skimming through the Report that no change either re E&Y (KSFUK's) situation with Kaupthing. Two lots agreed and the small outstanding amount yet to be agreed.

But really the main concern may be getting the Icelandic Government giving the Kaupthing WuC approval to pay out any dividends to foreign investors (us) when doing that could cause a large negative impact to the Icelandic Economy. It appears that the Glitner and Landsbanki Banks have a far worse 'foreign investors' imbalance than Kaupthing hf, and that would affect any leaway from the Icelandic Government. Kaupthing have already waited 18 months on a decision on this and it affects any 'Composition Agreement' they would like to bring in. So who knows how long this will take and even then it might be a negative response from the Icleandic government.

But, as always thank you once more for the update, most appreciated.

Gordon 45


Claim for interest under PG

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 16/04/2014 - 09:37

Hi Gordon 45,

Thanks for your thoughts & comments. I fully agree with your last comments re the situation in Iceland. The present Icelandic government seems to be doing all they can to get their hands on as much of the failed banks' assets as they can at the expense of the much maligned foreign creditors and I begin to wonder whether any of the creditors - and that includes us and also KSFUK - will ever see anything of it, at least in our lifetimes!

However, we live in hope that one day, maybe ....

As for our £85m claim, I can confirm - following some discussion with one of our CoI members last week - that it definitely does include a claim for interest. No break-down is available, but given our now expected near 100% recovery, I would expect most of it to be for interest. Clearly, the quantum of the claim cannot be agreed and finalised until all other recoveries have been realised and the shortfall precisely determined. Moreover, I understand that the method of calculation of the interest has yet to be determined and agreed with K hf, no doubt involving some hard bargaining between the WuC (who will want to minimise our claim) and our JLs (who will we trust be trying to get as much as possible).

Whatever the value of the claim finally agreed, we can only ever hope to see a relatively small part of it (based on the final recovery of K hf, which will certainly be much lower than for either KSFIOM or KSFUK). Nevertheless, for the sake of argument and all precautions guarded (!), it seems to me that IF we achieve 100% recovery of capital (can't be far out anyway) and IF our PG claim were to be agreed at around £70m and IF K hf eventually pays out say 25% (a figure that was bandied about some while back now), then we could recover around £18m for lost interest, which would represent about 2p/£ for us. These are just my thoughts of what MIGHT be possible - the last two 'IFs' are big ones and could well not be realised; on the other hand, we might even do better, who knows?


To Anrigaut re - Claim for interest under PG

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Wed, 16/04/2014 - 19:35

Anrigaut,

Once again thanks for the clarification on the now £85m claim by the JLs, that it includes interest.

Gordon 45