Further to its announcement on 8 June 2015, the Winding-up Board wishes to update creditors on the next steps towards the proposal of a composition to conclude the winding-up of the Glitnir estate.
Glitnir is in the process of preparing a submission to the Central Bank of Iceland ("CBI") requesting exemption from the capital controls to effect a composition on the basis of the proposals made to the Task Force on the Liberalization of Capital Controls (the "Task Force") by a group of restricted holders of Glitnir claims (the "Creditor Proposals") outlined in the announcement by the Ministry of Finance and Economic Affairs ("Iceland in Continuing Consultations Regarding - Capital Control Liberalization (Glitnir)") on 8 June 2015 (the "MoF Announcement").
The Creditor Proposals were made in connection with consultations relating to the proposed introduction of a Stability Tax, to be levied on the assets of financial undertakings in winding-up proceedings (such as Glitnir) as at 31 December 2015 unless they have concluded a composition on terms which are acceptable to the Central Bank of Iceland ("CBI"). The Act on the Stability Tax was passed on 3 July 2015. Under the Creditor Proposals Glitnir would make a Stability Contribution to the CBI as described in the MoF Announcement.
Glitnir envisages that the procedure from now to conclusion of a composition would involve the following principal steps. At this stage it is not possible to put a precise timeframe on these steps as this is dependent on the response of the CBI to the exemption request, the extent to which further discussions are required with the CBI or with other Icelandic government agencies and certain necessary official action. Further, there is no guarantee that the necessary exemptions will be granted or that government and other agencies will take the necessary action to enable Glitnir to proceed with a composition on the basis of the Creditor Proposals or otherwise. However, subject to the foregoing, Glitnir intends to launch the composition as soon as reasonably practicable and to conclude the composition before 31 December 2015.
- The CBI responds to Glitnir's for exemption request
- The necessary exemptions are granted
- The Exemption Request is granted
- The Composition Proposal documents are published and the Composition Meeting is convened
- Creditors vote to approve the Stability Contribution to the CBI and related matters
- Creditors vote to approve the composition
- Confirmation hearing before the District Court
- The composition becomes binding either (a) 7 days after the District Court confirms the composition, unless the decision is appealed to the Supreme Court, or (b) on the date of the Supreme Court decision (if the District Court decision is appealed and subsequently confirmed by the Supreme Court)
- Payment of Stability Contribution by Glitnir to the CBI
- Recognition of the composition in the U.S., in the pending chapter 15 proceedings, and other relevant jurisdictions is sought
- Composition distribution to creditors – the winding-up is concluded.
On 10 July 2105 Glitnir made a status report to the US Bankruptcy Court. A copy of that report can be found at the link below:
The Ministry of Finance and Economic Affairs' announcement can be found at the link below:
The Ministry of Finance and Economic Affairs' announcement in relation to the Stability Tax can be found at the link below: