Distressed Debt Trading Protocol: Kaupthing Closing Transfer Register

The authors explain how the winding-up of Icelandic bank Kaupthing introduced a strict deadline for transferring claims, requiring creditors to submit transfer requests by a specified “Transfer Bar Date” to preserve their ability to trade claims. The changes were designed to freeze the claims register and streamline the restructuring process, including an expedited transfer procedure to ensure consistency in voting and distributions ahead of a proposed creditor agreement. As a result, market participants with unsettled trades faced increased urgency to complete transfers or risk alternative, potentially less favorable settlement methods.

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