During the global liquidity crisis, the three main commercial banks of Iceland, Glitnir, Landsbanki and Kaupthing, were not able to refinance themselves in the beginning of October 2008, despite having considerable assets to match their debts and having operated in full compliance with European banking laws.
Consequently, Glitnir, Landsbanki and Kaupthing were taken into administration by the government of Iceland. Due to unusual financial market circumstances the Icelandic Financial Supervisory Authority appointed resolution committees for the banks in accordance with article 5 of Legislative Act No. 125/2008 on the Authority for Treasury Disbursements.
Since 7 October 2008 the Resolution Committee of Glitnir has taken on the affairs of the bank, including supervising, handling of all the banks' assets, and conducting the banks' business operations.
The District Court of Reykjavik granted Glitnir a three months Moratorium on payments to creditors on 24 November 2008. This was considered a necessary step to ensure an equal and fair treatment of all creditors and is in accordance with Icelandic law. On 19 February 2009 the District Court of Reykjavik accepted the banks request for an extension to the Moratorium order. The extension period is to end on 13 November 2009. According to Icelandic law the length of a Moratorium can't exceed 24 months.
A Winding Up Board for Glitnir hf. was appointed by the Reykjavík District Court on May 12th. The appointment was made in accordance with last April‘s parliamentary changes on the laws regarding winding up proceedings for financial companies.
Creditors will be able to state a claim on the bank's estate within the extension period which will be decided by the Winding Up Board. The Board will make a stand on and record each claim, and declare a claimant's meeting. The Winding Up Board shall also direct any disputes that may rise surrounding the claims to a court of law.
