24 MAY 2010

Claim against Kaupthing hf

It has been confirmed to us that the company's claim against Kaupthing hf has been referred to the District Court of Reykjavik for a decision. Our claim is one of the first to be referred to Court by the Winding Up Committee, however, we understand that the claim processes for the two other main Icelandic banks, Glitnir and Landsbanki, are running ahead of Kaupthing, so the Courts already have a large number of claims to hear. We have not yet been notified of a date for the hearing, nor have we been notified of the date by which our submission should be filed. However, in the meantime we are continuing to accumulate evidence to support our claim, which will be pursued vigorously in Court. It has been indicated to us that it is likely to be late 2010 or early 2011 before the Court issues its decision on our claim. Both sides will have the right of appeal to the Supreme Court of Iceland, the timetable for such an appeal is not clear but, if an appeal were made, it could easily be another year before a final decision would be handed down.

The Winding Up Committee has received over 27,000 claims, of which only 417 have been agreed so far. Approximately 3,400 claims have been wholly or partially rejected (including ours), 13,000 are in dispute as to the priority of claim and a decision has been held over on a further 9,500. They have so far received 297 objections to their decisions.

The Winding Up Committee have indicated that they will not be in a position to make any distributions until substantially all cases referred to Court have been decided upon. This is frustrating, however it does make sense given the high volume of claims which are in dispute either over the amount of claim or the level of priority. The Chairman of the Winding Up Committee stated that this could take "three to four years" before the first distributions are made to creditors.

Agreement of creditors' claims

Any creditors who have not yet submitted a claim, either directly or through the Depositors Compensation Scheme, are asked to submit their claims as soon as possible to ensure that they receive the distributions to which they are entitled.

Contacts

As previously, 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.


Mike Simpson

Joint Liquidator