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Landsbanki Guernsey Limited in Administration update 15 November 2010

The Joint Administrators have today issued a copy of their Fourth Interim Report (“the Report”) to Creditors. The Report provides an update on the progress of the administration since the last report released in January 2010.

The Joint Administrators note there has been a gap since their January 2010 report, however this has been a result of a largely expected slow down in the realisation of assets and the timeline in relation to the Icelandic legal process together with delays in the Guernsey Court process.  However they have notified creditors of their intention (subject to Court approval) to place the Bank into liquidation and to make a further distribution to creditors of up to 7.5p in the pound together with interest on unclaimed ring fenced amounts from the previous part payments, the ultimate distribution being dependent on the level of additional realisations achieved prior to that date.  It should be noted that it is possible that the level of distribution could be significantly higher should further asset realisations occur prior to the distribution date.

The Joint Administrators would like to draw creditors’ attention to two matters within the Report being:

  • the Joint Administrators’ intention to apply to the Court on 7 December 2010 for the Bank be placed into liquidation and for the Joint Administrators to be appointed as Joint Liquidators (together with certain other ancillary orders, including orders enabling the payment of an interim distribution); and
  • that, should they be appointed Joint Liquidators, it would be their intention to make only one further interim distribution (being the distribution of up to 7.5p prior to the final distribution of all the Bank's assets (unless there is a substantial extra realisation of cash)).

The reasons for the Joint Administrators’ position on these matters are set out within the Report on pages 4 to 7.  Ultimately the Joint Administrators are seeking to reduce costs, improve returns and enable a legally binding adjudication of claims to take place which can only occur under Guernsey law if the Bank is in liquidation.

The Court Hearing on 7 December 2010 is concerned only with issues in connection with the liquidation (or continued administration) of the Bank. Should any creditor believe they may wish to appear, they are advised to contact a Guernsey Advocate as soon as possible and also requested to notify the Joint Administrators (via e-mail to jmcgrory@deloitte.co.uk) so they can be suitably accommodated within the process.  A list of Guernsey Advocates can be found on the Guernsey Bar website http://www.guernseybar.com/

Please note that the Court Hearing is not a forum for discussing specific creditor issues, or other issues in connection with the Bank.  Should the Bank be placed into liquidation on 7 December, the Joint Administrators will propose, subject to Court approval, for the convening of Commissioner’s meeting, which creditors may attend, at which creditors' claims (including disputed claims) will be examined and verified.  It is also proposed by the Joint Administrators that an interim dividend will be declared following this meeting. Arrangements for any such meeting will be sent to creditors following the Court Hearing on 7 December 2010 should the Bank be placed into liquidation.

The Q&As included on this site have also been updated today.  Significant changes have been made to questions 14, 15, 19, 25, 26 and 32 reflecting the updates included in the Report. 

As previously advised, significant updates only will continue to be provided to creditors via this site in order to minimise overall costs.

Whether or not there will be any distribution, and the procedure for making that distribution, will depend on the outcome of the Court hearing on 7 December 2010. You will be contacted again, in writing, regarding the adjudication process although details of the proposed process are included in the Report which will need to be agreed with the Commissioner on the assumption that the liquidation proceeds. 

In the meantime, the Joint Administrators request that those depositors who have not yet returned their proof of debt forms do so as soon as possible so that the adjudication process can progress.  No further payments can be made to those depositors who have not submitted their proof of debt form.

The Joint Administrators would like to thank creditors for their continued patience which, to date, has helped prospects for recovery to improve.

Should creditors not receive a copy of the Report within two weeks then they should contact Jan McGrory via e-mail at jmcgrory@deloitte.co.uk or by telephone on +44 1481 724011.

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