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Kaupthing asks for longer protection from creditors

Icelandic bank Kaupthing, which is in restructuring talks with Mosaic Fashions, has asked to extend its period of protection from creditors.

The District Court of Reykjavik has agreed to a request from the bank’s Resolution Committee to extend the moratorium, which is similar to Chapter 11 bankruptcy in the US,  for nine months until November 13.

A statement from the bank today said: “One of the main tasks of the Resolution Committee and its employees has been to protect assets and safeguard the interests of creditors as far as possible.”

“In the opinion of the Resolution Committee and the moratorium supervisor it is crucial for the bank to be given breathing space to concentrate on the tasks at hand at the bank so that it can achieve its objectives to protect creditors’ interest, maximise the recovery rate of claims and ensure the equal treatment of creditors.”

At a meeting on February 5, the bank’s creditors were presented with developments at the bank since it requested the intervention of the Icelandic Financial Supervisory Authority on October 9, as well as details of the bank’s finances, and its assets on November 15.

The moratorium supervisor and the Resolution Committee said that an application would be made to extend the the moratorium at the next hearing of the Reykjavik District Court.

Mosaic Fashions, which runs the Karen Millen, Oasis, Warehouse, Principles and Shoe Studio Group businesses, is in restructuring discussions with its Kaupthing, its bank.

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