Chapter 4 Administration of the estate when timely payment cannot be made from the cover pool
Section 17 Halt to payments
Should it not be possible to make contractual payments using assets from the cover pool as and when the claims falls fall due up to the agreed redemption date, and an imminent change that will ensure such contractual payments is unlikely, the bankruptcy administrator and creditors’ committee shall introduce a halt to payments. A halt to payments shall be introduced even if the cover pool assures correct ongoing payments in the purely short term.
The bankruptcy administrator and creditors’ committee shall as soon as possible inform holders of covered bonds of the halt to payments and the date on which such halt to payments is to be introduced.
Section 18 Effect of halt to payments
Where a halt to payments is introduced under section 17, further administration of the estate shall proceed under the general rules of the bankruptcy legislation. The bankruptcy administrator and creditors’ committee shall inform the holders of covered bonds of the further treatment of the cover pool. The bankruptcy administrator and creditors’ committee shall, when making material decisions about the cover pool, consult the holders of covered bonds in accordance with the Financial Institutions Act section 2-35 first paragraph.
Section 19 Calculation of claims
The size of all preferential claims over the cover pool shall be calculated on the date that the bankruptcy administrator and creditors’ committee introduced the halt to payments. Claims shall be calculated by discounting them to present value in accordance with the provisions of section 15 third paragraph.