Claims against Kaupthing hf

The Joint Liquidators have been in discussions with Jonsson & Hall, the Icelandic law firm advising them upon KSFIOM's claim under the Parental Guarantee provided by Kaupthing Bank hf ("the Parental Guarantee").

During those discussions Jonsson & Hall mentioned certain facts that relate to all claims under the Parental Guarantee, whether by KSFIOM or anyone else, which the Joint Liquidators feel may be of interest to individual creditors of KSFIOM, and which are set out below.

The Joint Liquidators would emphasise that the provision of these facts should not be regarded as the provision of legal advice by the Joint Liquidators or by Jonsson & Hall, and cannot be relied upon by creditors of KSFIOM in reaching any decision as to whether to claim under the Parental Guarantee in their personal capacity. Creditors of KSFIOM considering doing so should take their own legal advice in Iceland.

(1) All claims of whatever nature relating to Kaupthing Bank hf, including claims under the Parental Guarantee, and claims for breach of warranty relating to the Parental Guarantee, must be lodged with the Winding-up Committee of Kaupthing Bank hf ("the Winding-up Committee") by 30 December 2009.

(2) The Winding-up Committee is required by Icelandic statute to accept or reject all claims relating to Kaupthing Bank hf by 22 January 2010, although Kaupthing Bank hf may apply for an extension of time within which to consider claims.

(3) Any person who wishes to appeal against the decision of the Winding-up Committee in relation to their claim must lodge their appeal (referred to as an "objection") by the date of the Meeting of Creditors of Kaupthing Bank hf on 29 January 2010. Failure to do so means that the decision of the Winding-up Committee is accepted.

(4) Following the lodging of any objection, the Winding-up Committee must attempt to settle the dispute with the creditor concerned. If settlement proves impossible, the dispute will be referred to the District Court of Reykjavik. An appeal ultimately has to be heard in the Supreme Court of Iceland.

The Joint Liquidators have been informed by Counsel for the Winding-up Committee that the Winding-up Committee is of the opinion that only the Joint Liquidators can make a claim under the Parental Guarantee, upon the basis that KSFIOM itself was the recipient of the Parental Guarantee, and not the individual creditors. Accordingly, it seems likely that any claims by individual creditors under the Parental Guarantee will be rejected by the Winding-up Committee. However, it would be open to any individual creditors concerned to appeal against that decision.

The Joint Liquidators would again emphasise that the facts set out above do not represent legal advice, and cannot be relied upon by creditors of KSFIOM, who should take their own advice in relation to any claim that they may wish to bring against Kaupthing Bank hf in their personal capacity.

Contacts

The best way to make contact is to write to the bank or email branch@singers.co.im. If you need to telephone the bank, please use the main switchboard number +44 1624 699222. Please note that the office will be closed for public holidays on 25 and 28 December and on 1 January.

Mike Simpson

Joint Liquidator