Iceland

The Landsbanki Winding-Up Board is suing the top management of the bankrupt bank, board-members and insurers for damages caused by not stopping the bank’s operations on October 3 2008 when, according the the WUP, the bank was de facto bankrupt. In total, the WUB claims the damages amount to ISK45bn (€282m).
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The claims are based on money going out of the bank on its last day of operation October 6 2008, in total ISK35bn (now €219m). This money went onto the accounts of MP Bank, Straumur and Landsvaki, one of Landsbanki’s own money market funds. The dates are important because this means that according to the WUB the bank was already bankrupt when the British authorities closed down the bank.

See also: http://www.icelandreview.com/icelandreview/search/news/Default.asp?ew_0_...

Update 20 Jan 2012: "More on Lansdbanki's last hours" here:
http://uti.is/2012/01/more-on-landsbankis-last-hours/

Six former superiors at the now defunct bank Kaupþing (Kaupthing) must pay its bankruptcy estate more than ISK 4 billion (USD 32 million, EUR 25 million), according to a court order announced yesterday. The estate’s managers are demanding that assets both in Iceland and abroad will be liquidated to cover the debt. ....

Martin Wolf's Exchange:
"Iceland was the first country devastated by the financial crisis. ...
On October 27 2011, I attended a conference jointly organised by the IMF and the government of Iceland to celebrate Iceland’s graduation from the programme and evaluate the outcome of the rescue. ... "

Ingvar Vilhjalmsson, the former director of the market trade division at Iceland’s (now bankrupt) Kaupthing Bank, now needs to repay the bank’s estate around ISK 2.6 billion (EUR 16.36 million) in loans which had effectively been written off.

Vilhjalmsson took the massive loans in the years running up to Kaupthing’s demise in order to buy shares in the bank. The Reykjavik District Court yesterday ruled that he must pay the money back. ...

The Supreme Court of Iceland yesterday ruled that the emergency law on prioritisation of bankruptcy claims will remain in force. In the specific case of Landsbanki, this means that British and Dutch claims to cover the Icesave debt can now be paid out. ...

Comment added (awaiting moderation)

Spokesmen for depositors who lost money in the collapse of Guernsey’s Landsbanki branch and the Isle of Man’s Kaupthing Singer & Friedlander subsidiary expressed disappointment at a decision on Friday by an Icelandic court, which will ensure some other losers in the collapse of Iceland’s major banks will get back most of their money – but they, once again, will not. ...

Iceland will start paying out as much as $11.4 billion in foreign depositor claims after the country’s top court upheld an emergency law that leaves bank bondholders in the lurch and protects ordinary account holders. ...

Comment posted by anrigaut:

"leaves bank bondholders in the lurch and protects ordinary account holders." It also leaves in the lurch the ordinary account holders with Kaupthing's Isle of Man subsidiary Kaupthing Singer & Friedlander (IoM) who, 3 years after the collapse of their bank, have so far recovered 73.6% of their deposits and were counting on the parental guarantee given by Kaupthing (Iceland), and recently upheld by the Icelandic Supreme Court, to cover the eventual shortfall in their bank's ongoing liquidation. But as the claim under this guarantee does not, it seems, benefit from the priority status accorded by the emergency law to depositors, the present ruling will push them to the back of the queue along with other unsecured creditors and reduce the value of their claim. These depositors have been helped nowhere - not in the Isle of Man, not in the UK (supposed to represent the IoM in negotiations with Iceland), and not, now, in Iceland.They remain the only retail depositors in Kaupthing not to have been fully compensated by government intervention, despite acknowledged regulatory and governmental failures in dealing with the bank’s insolvency

Latest installments of Sigrun Davidsdottir's Icelog - as always clear, informative and worth reading for those interested in following developments in Iceland:

• How much did the collapse cost Iceland?

• Icesave, en route to the EFTA Court?

Sigrun Davidsdottir's latest blog, with comment added by Tony Shearer:

"Once again, Sigrún, you have set things out very clearly. And the circumstances raise so many questions about the border between acceptable practice, naivety, incompetence, negligence, and criminal behaviour. And that applies to management, borrowers, auditors, regulators, and other advisers.
The authorities need to put into the public domain what happened so that the lessons can be learned, and people in the future will know what is, and is not, acceptable practice and behaviour.
In addition those who lost money as a result deserve to have some explanations.
Tony Shearer"

Quite so Tony!

Saw this headine on the Torygraph site today and for all of 2 seconds, got quite excited....

*Icelandic Bank finds money"

Until you realise the story is about Icesave and not Kaupthing. Phew, close one there....