Iceland bank Kaupthing files for US bankruptcy
NEW YORK |
NEW YORK (Reuters) - Kaupthing Bank hf KAUP.IC, Iceland's largest bank, has sought bankruptcy protection from its U.S. creditors.
The Reykjavik-based lender filed a Chapter 15 bankruptcy petition on Sunday with the U.S. bankruptcy court for the Southern District of New York.
The filing came after Iceland's Financial Supervisory Authority seized Kaupthing, Glitnir Banki hf and Landsbanki Islands hf, the nation's three largest banks, as the global credit crisis deepened. Glitnir filed on Nov 26 for Chapter 15 protection.
Kaupthing has about $14.8 billion of principal assets, including $222 million located in the United States, and $26 billion of principal indebtedness, according to a court filing by Olafur Gardarsson, a court-appointed assistant who is managing the bank's reorganization.
He asked to have Kaupthing's court proceedings in Iceland recognized in the United States. "The ultimate goal of Kaupthing is to satisfy the claims of all creditors and to try to preserve the value of the bank's assets to the extent possible," Gardarsson said.
Iceland banks had taken on billions of dollars of debt in recent years to fund aggressive overseas expansion.
Gardarsson said the country's decision on Sept 29 to buy a 75 percent stake in Glitnir led to a plunge in Iceland's krona, credit rating agency downgrades for the country and its banks, and a "run on the banks" by foreign investors trying to shed Icelandic assets.
The International Monetary Fund on Nov. 19 approved a $2.1 billion loan for Iceland, as part of an assistance package totaling about $10 billion.
Iceland on Monday celebrated the 90th anniversary of its autonomy from Denmark.
(Reporting by Jonathan Stempel; Editing by Steve Orlofsky)
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