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Landsbanki Guernsey Limited in Compulsory Liquidation update 15 December 2010

Liquidation proceedings and Commissioner’s meeting
The Bank was placed into compulsory liquidation on 7 December 2010 and Mr Rick Garrard and Mr Lee Manning of Deloitte LLP appointed as Joint Liquidators.  In addition, a Commissioner of the Court (Mr Richard Collas, Deputy Bailiff) was also appointed in accordance with the requirements of Guernsey Company Law.

A copy of the Joint Liquidators’ Interim Report to the Commissioner and the Creditors dated 15 December 2010 (“the Report”) will be sent to creditors shortly. The Report provides a summary of the claims against the Bank and the adjudication of those claims by the Joint Liquidators as at 30 November 2010.  The approval of the Interim Statement of Affairs dated 30 November 2010 and the adjudication of the claims will take place at a meeting to be convened by the Commissioner of the Court on 19 January 2011.  An updated schedule of claims will be provided to the Commissioner and those creditors in attendance at the meeting to include any further claims which are received by the Joint Liquidators together any further realisations of any assets.

At the hearing on 7 December 2010, the Joint Liquidators also obtained the following Orders and Directions from the Court:

  • That, subject to the satisfactory completion of an interim adjudication of claims and approval of such a distribution by the Commissioner on 19 January 2011, the Joint Liquidators are able to declare an interim distribution in Liquidation to be paid to creditors of the Bank early in 2011 together with interest on unpaid ring fenced amounts on previous part payments;
  • That, in the course of the liquidation, in order to maintain confidentiality under Data Protection Laws, names and account numbers of depositors will not be disclosed (except to the Commissioner) and therefore these creditors will be referred to by class in any report and not individually specified;
  • That the Liquidator is able to advance further funds in respect of the remaining loans, should they believe that this would maximise overall recovery on the loan;
  • That those legal proceedings already on foot should continue in Liquidation together with the ability to commence any new proceedings (subject to such approval of the Court as may be necessary) should they believe such action is warranted; and
  • That the ICC should be maintained, including the provision of the ICC Advocate and that the cost of the ICC should be borne out of the assets of the Bank. 

As a result, in addition to the issue of the Report to creditors, the following process has now been commenced:

  1. A notices have been placed in the Gazette Officielle in the Guernsey Press and in the London Times by the Joint Liquidators notifying all creditors that the Bank has been placed into Liquidation and providing details of the date of the Commissioner’s meeting;
  2. A Commissioner’s meeting will be convened at 9.30 am on 19 January 2011 in the Royal Court, St James’ Street, St Peter Port, Guernsey to examine and verify the interim accounts of the Joint Liquidators and claims made to the Joint Liquidators which the Joint Liquidators do not expect to differ materially from those included in the statement of claims at 10 December 2010 (which is included in the Report referred to above).  Where claims are disputed at this meeting they would be referred to the Court for resolution.   
  3. Following adjudication of the claims by the Commissioner, the Commissioner may authorise the payment of a distribution of the assets of the Bank subject to retention of sums as may be necessary for the expenses of the winding up and making provision for:
    • any debts which appear to the Commissioner to be due to persons who have yet to establish their claims (e.g. depositors who have yet to return their proof of debt forms) ;
    • any debts which are the subject of claims which have not yet been determined; and
    • disputed proofs and claims; and
  4. A notice will be placed on the website and in the Guernsey and UK Press notifying creditors of any distribution amount and the date of the interim dividend.

Should any creditor believe they may wish to appear at the Commissioner’s meeting on 19 January 2011, they are requested to notify the Joint Liquidators (via e-mail or telephone to Jan McGrory (jmcgrory@deloitte.co.uk or tel +44 1481 724011) by 14 January 2011 so they can be suitably accommodated at the Commissioner’s meeting.  Please note that if you have submitted your proof of debt to the Joint Administrators/Liquidators and you have received no correspondence from the Joint Administrators/Liquidators in this respect, you can be assured that the Joint Liquidators will be proposing to the Commissioner that your claim is admitted in the Liquidation and hence there is no reason why you should attend the Commissioner’s meeting.  If your claim(s) has been subject to some correspondence or if you dispute the amount of your claim (as shown on the 31 December 2009 statement previously issued to you) or as referred to in the Report, then you should consider being represented at the Commissioner’s meeting.  Further, it should be noted that if you wish to challenge the claims of other creditors you are entitled to do so at the meeting.

Subsequent to the Commissioner’s meeting, all agreed creditors will be contacted by the Joint Liquidators providing the necessary documents for completion to confirm their account details for the payment of any interim distribution (if approved by the Commissioner) and all subsequent payments.

Proof of debt
Creditors of the Bank are required to prove their debts, before 19 January 2011, by sending to Richard Garrard, Joint Liquidator, at Deloitte LLP, PO Box 137, Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3HW prior to 5pm on 18 January 2011 or via submission to the Joint Liquidators at the Commissioner’s meeting on 19 January 2011, written statements of the amount they claim to be due to them from the Bank.  They must also, if so requested, provide such further details or produce such documentary or other evidence as may appear to the Joint Liquidators to be necessary.

Please note that this does not apply to depositor creditors in respect of their deposit balances with the Bank or to non-depositor creditors who have previously been in contact with the Joint Liquidators (in their capacity as Joint Administrators) and provided a proof of debt. 

It should be noted that any creditor who notifies the Joint Liquidators of their claim after the Commissioner’s meeting on 19 January 2011 will be unable to disturb any interim distribution that might be authorised by the Commissioner at that meeting and subsequently declared by the Joint Liquidators following the adjudication of claims.  If subsequently admitted, any creditor who proves his claim after the declaration of any such interim dividend will only be able to participate (and catch up) in any future distributions arising from any further realisations of the assets of the Bank.

If you have yet to return your proof of debt form, the Joint Liquidators request that you return this form as soon as possible so that the adjudication process can progress.  No payments can be made to those depositors who have not submitted their proof of debt form and, should this form not be returned, there is a risk that your claim against the Bank may ultimately be rejected and assets reserved for your claim distributed amongst the remaining creditors of the Bank. 

Please note that whether or not your proof of debt has been received will be clarified in a letter to each depositor and creditor dated 15 December 2010.

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