On 7 October 2008, following the continued deterioration in the financial markets, the Financial Supervisory Authority of Iceland ("FME") used powers granted by the Icelandic Parliament with reference to Article 100 of Act. No. 161/2002, as amended, to take control of Landsbanki Islands hf ("Old Landsbanki"). Subsequently, New Landsbanki Bank hf ("New Landsbanki") was created (now 'NBI hf.') and Old Landsbanki's domestic Icelandic deposits, as well as significant Old Landsbanki assets relating to its Icelandic operations, were transferred to it. New Landsbanki is wholly-owned by the Icelandic Government.
New Landsbanki has taken over all of Old Landsbanki's domestic Icelandic deposits, together with significant Old Landsbanki assets that were related to its Icelandic operations, such as loans and other claims.
Old Landsbanki retains all liabilities and assets not transferred to New Landsbanki.
New Landsbanki will issue a bond to Old Landsbanki, the face value of which will be the net difference between the assets and liabilities transferred into New Landsbanki from Old Landsbanki, to reflect a fair value asset adjustment verified by an independent third party.
A Resolution Committee has been appointed by the FME to supersede the board of directors of Old Landsbanki. The role of the Resolution Committee is to oversee the realisation of assets, maximize the value as much as possible, and retain within Old Landsbanki until a formal process of payment distribution commences.
Further information: www.oldlandsbanki.is