Bondholders of Bankrupt Icelandic Bank Kaupthing Singer and Friedlander Battle with Other Bank Creditors over Competing Claims

This case pits the creditors of failed bank Kaupthing Singer and Friedlander Limited (KSF) against holders of bonds issued by KSF subsidiary Singer & Friedlander Funding plc (Funding).  Both of those entities are now in administration (bankruptcy) in the UK.  KSF had guaranteed Funding’s bonds and sought to use a claim for indemnification from Funding under that guarantee to offset other amounts it owed to Funding.  The UK Supreme Court ruled on whether the rule against double proof takes precedence over a conflicting equitable principle.  We summarize the Supreme Court’s decision.  For a deep discussion of the chief regulatory, tax, documentation, insider trading and other legal and business issues impacting hedge funds’ trade risk in European secondary loans, see Part One and Part Two of the two-part article series recently published in the HFLR by attorneys at Schulte Roth & Zabel LLP.

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