Creditors queue up to quiz Kaupthing
CREDITORS of the collapsed Icelandic bank Kaupthing, including local authorities and charities, will this week get the chance to grill the bank and its administrator Deloitte & Touche on what has happened to their money and when they will get it back.
It is understood the bank’s Icelandic bosses and Deloitte will meet an informal creditors’ committee this week. They are expected to demand an explanation of where their funds are, how much they will get back and when.
However, the creditors are unlikely to see any of their funds until next year. Last week the district court of Reykjavik granted Kaupthing a moratorium on the repayment of creditors which will stay in force until Friday, February 13, 2009.
In a statement, the stricken Icelandic bank said: “The moratorium will give Kaupthing the opportunity to continue discussions with the bank’s creditors with the aim of maximising recovery for all stakeholders.
“It will also assist in making Kaupthing’s ongoing co-operation with the informal creditors committee more effective.”
Among Kaupthing’s creditors are the charities Samaritans and Cats Protection. Dozens of local authorities, including Kent County Council, also banked with Kaupthing and its fellow Icelandic banks and are unable to access their funds. It is feared this will lead to huge council tax hikes.
Meanwhile, stockbroker Singer Capital Markets is understood to be looking for a buyer — less than one month after its management bought the business from Ernst & Young, Kaupthing’s UK administrator.
The heads of Kaupthing’s UK stockbroking and investment banking business staged the management buyout at the end of October and renamed the business Singer.
They had hoped this would give the business a fresh start after it was hit by the stock market downturn and the City’s refusal to do business with firms linked with Iceland.
However, it is understood that, despite breaking away from Kaupthing, Singer has continued to struggle.
Business has dried up due to plunging markets and, as a result, it is understood that Singer’s management — led by chief executive Tim Cockcroft, director Paul Wedge and head of trading Hugh McAlister — have started looking for a white knight to rescue the firm.
It is also understood Singer has been laying off staff to preserve its cash resources.
Singer was unavailable for comment at the time of going to press.
Before the Singer management buyout, Ernst & Young sold Kaupthing’s UK fund management arm to stockbroker Evolution for £1million.
