Iceland’s Supreme Court - all depositors, regardless of nationality, residency will get all their money back.

  • mikeexpat
  • 31/10/08 31/05/09
  • a depositor
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Posted: Tue, 01/11/2011 - 09:59

Please see below Aricle from Bloomberg Financial News. We are all Depositors. “It’s clear from these rulings that all depositors, regardless of nationality, residency, nature or amount of their deposit, will get their money back in full.” All Depositors from all Kaupthing branches in Europe (except IOM) were fully compensated. This statement from Iceland’s Supreme Court requires immediate action by our Liquidator, DAG, PPDG, Committee of Inspectiona and our Laywers.

"Verdicts/Settlements

Iceland Passes Last Hurdle in $11.4 Billion Depositor Payout

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.

The decision by Iceland’s Supreme Court to rule in favor of a crisis bill enacted three years ago “marks the endpoint” to a dispute with the U.K. and the Netherlands triggered by the island’s 2008 financial collapse, Economy Minister Arni Pall Arnason said. The ruling will help repair relations with the two countries, whose depositors risked losing their savings when Iceland’s second-biggest bank collapsed, he said.

“It’s clear from these rulings that all depositors, regardless of nationality, residency, nature or amount of their deposit, will get their money back in full,” Arnason said in an interview in Reykjavik. Repayment may start within weeks, he said.

Iceland’s banks defaulted on $85 billion at the end of 2008, as the government ring-fenced lenders’ domestic operations in an effort to protect the $12 billion economy from total collapse. The local assets of Landsbanki Islands hf, Kaupthing Bank hf and Glitnir Bank hf were taken over by the state, which has since created new banks from the lenders. Bondholders, including Royal Bank of Scotland Plc, BNP Paribas (BNP) SA and Deutsche Bank AG, are still trying to recoup their funds.

The British Financial Services Compensation Scheme, which compensated U.K. Icesave depositors in full, will probably get its first payments “in a matter of weeks,” Arnason said. Dutch depositors, who had up to 100,000 euros in savings covered by their central bank, will be repaid in full once final “technicalities” are solved, he said. “This isn’t a question of months but rather weeks, as I understand it.”

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Icelandic Compensation Fund -- Promising News

  • VikingRaider
  • 10/10/08 31/05/09
  • unspecified
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  • Tue, 20/12/2011 - 11:39

As one of the smallest creditors (and in real need of the few hundred pounds still owed) this news from Rekjavik appears promising. Iceland appears to be bouncing back, but as long as there are outstanding monies owed to depositors, there will always be a blemish on the country's financial history. Now who do I contact?


Recent statement

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
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  • Thu, 03/11/2011 - 10:12

Dear all,
If KSF IoM may be excluded because it is a subsidiary would the same be said of KSF London? I ask because if that bank gets all its money back then we would benefit from full repayment of the outstanding deposit in that bank surely. I am not up to date on figures but that must amount to several percentage points?
John


Re Recent statement

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Online Now
  • Thu, 03/11/2011 - 11:11

On further investigation, it appears that the recent rulings all related to Landsbanki (LIHF), though the rulings upholding the Emergency Law of 2008 and the status of wholesale depositors (such as the UK councils who were defendants in one of the cases) set a clear precedent which would apply to similar cases in the other banks.

Landsbanki Guernsey (LGL) were among the plaintiffs who clearly lost. See the report from their liquidators Deloitte here: http://www.deloitte.com/uk/
and the included link to a "detailed appendix of the rulings".

LGL was a subsidiary of Landsbanki (Iceland) and thus - as far as I understand it - in a situation equivalent to that of KSFUK with respect to Kaupthing. LGL, which had funds deposited with Landsbanki, remains an unsecured creditor of the latter, so I see no reason to suppose the status of KSFUK as an unsecured creditor of Kaupthing could be changed.

What remains unclear (to me at least) is whether there are other claims pending in the Kaupthing winding-up which could now profit from this ruling, and thus push both us and KSFUK further back.

Beyond that is the question of how much will be left in the pot when the existing priority claims have been paid. It appears from a number of reports that as far as Landsbanki is concerned the answer is probably - nothing. As for Kaupthing, I have seen no figures, but am slightly encouraged by the following statement (apparently by the Court) in Deloitte's Appendix: "It had also been pointed out that there was a likelihood of greater payment for general claims in the winding-up of banks other than the defendant LIHF." Indeed, K hf was always said to be in a stronger position than the other failed Icelandic banks, so maybe we are still in line for around 25% - but this remains highly speculative.


Icelandic Supreme court ruling on priority status

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Tue, 01/11/2011 - 10:40

Hi mikeexpat,

"This statement from Iceland’s Supreme Court requires immediate action by our Liquidator, DAG, PPDG, Committee of Inspectiona and our Laywers."

Agreed. Although the statement you quote was not made by the Court but - as stated in the Bloomberg article - by the Icelandic Economy Minister Arni Pall Arnason. So it's a political interpretation (spin if you like), not a legal one.

Our CoI reps are aware of this development and will no doubt be raising the matter with PwC and their lawyers, through whom any possible legal action would have to be channelled.

As fas as DAG is concerned, a statement made yesterday has been reported today in International Adviser (posted on this site as a News item today). I have also commented on the Bloomberg article (see News post on that), but there seem to be some technical problems as it seems to come and go (happened several times yesterday) and the site is currently "showing no comments". I have emailed the editor but no response as yet.

Have also commented on Sigrun Davidsdottit's blog here: http://uti.is/2011/10/the-icelandic-high-court-deposits-are-priority-cla... but still awaiting moderation.


Comments on Icelog

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Online Now
  • Tue, 01/11/2011 - 11:31

Hi Just to reiterate, CoI and

  • Knife Edge
  • 10/10/08 31/05/09
  • a depositor
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  • Tue, 01/11/2011 - 10:54

Hi

Just to reiterate, CoI and JLs are aware of this statement. As anrigaut has said, it's not a statement by the Supreme Court, it's a statement by a politician; and, further, it's not strictly speaking inaccurate as I suspect the context it is taken from is that it is referring to depositors in Kaupthing hf.

Regrettably, although the commercial effect of the Kaupthing group structure was to leave us exposed to Khf, we are not direct depositors in that bank but in a subsidiary of it - technically speaking, a branch is indistinguishable from the head office (i.e. is part of the same entity) while a subsidiary (such as KSFIOM) is a separate and distinct legal entity - so the comment may, strictly speaking (and assuming the context is, as I have said above, referring to Khf), be accurate.

Nevertheless, I have raised it with CoI and JLs and we are considering the most appropriate response.

K E


Letter to Icelandic Minister

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Online Now
  • Wed, 07/12/2011 - 13:32

Just announced by Mike Simpson on KSFIOM website:

"On 27 October 2011, Árni Páll Árnason, the Icelandic Minister of Economic Affairs, made a statement where he implied that no depositors in Icelandic owned banks would ultimately lose any money as a result of the collapse of the banks in 2008. I am aware that this comment has caused consternation among creditors and can confirm that I have written to the Minister to draw his attention to the plight of creditors of KSFIOM."

http://www.kaupthingsingers.co.im/Pages/2011/December/07December2011.asp

Thanks KE for raising this matter with the CoI and JLs.

Good to see that it resulted in some action. Remains to be seen whether there will be any reply ...


Icelandic Minister's statement - Injustices re. Icelandic-owned

  • sami
  • 10/10/08 31/05/09
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  • Mon, 12/12/2011 - 08:21

I would think that we should try to gain some publicity in the press about this statement and about the injustice of what happened to depositors in KSFIOM. Although I accept that KSFIOM was indeed a separate legal entity and not a branch of Kaupthing, it is the face value of the minister's comment, that it encompasses Icelandic-owned banks. We were depositors in an Icelandic-owned bank, were we not?

I think if such a story were to be covered in the press or other medium, it would help to highlight the injustices that have taken place and hopefully cause the minister's statement to be carefully dissected.


Injustices...

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Mon, 12/12/2011 - 13:48

Does anyone really believe that the press or anybody else gives a cuss? Of course they don't! This ancient history is of no interest to anyone other than those of us who personally suffered the consequences. Today's financial news is more than worrying enough for the tens of millions affected by the eurozone debacle, let alone what happened to a couple of thousand offshore depositers a few years ago.


The truth hurts

  • expatvictim
  • 10/10/08 01/11/10
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  • Mon, 12/12/2011 - 16:23

Couldnt say it any better - weare old news


We're watching the can being kicked down the road-

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Thu, 15/12/2011 - 00:58

IT IS still being kicked down the road. Look at the figures of executive pay in the States released 'today'. The developed economies are being looted (still!!). The political class is aboard. This looting is finally being challenged by a wave of obvious anomoly that confronts the hegemonic belief that 'these people ate so special they deserve such high rates of pay' and simply obseves (in accordance with the data) that the rich are looting. We are being screwed by PWC et al.

The comments above of course make sense. After being screwed (and we know the culprits) we need to revise our models of economic/human behaviour if we are still surprised. Freedom and justice are still worth engaging in order to struggle to achieve them. The average human being is unable to see that climate change needs to be addressed if their granchildren are to avoid an apocalypse. Give me my 42 inch plasma screen NOW.

Perhaps we'll all do it with a lot less innocence. My suggestion is that the next time somebody lies to you then confront them, within limits of course.

I guess you'll all get the drift- And to any idiots like "expat" and of course our GSr Devon sheep f*cker), being fellow travellers doesn't work. (at least in this situation, Gavin)

Habe a nice night.

And Icecrusher: You want to post you take on the liquidation then I for one would like to read it.

And finall Anrigaut: you've gone quiet. I would like to applaud your efforts. They weren't lost it was just that in this situation nothing would have been enoug. You've learnt in a very shory space so much about the qulaities of most politicos. What an ugly experience we have all endured.


@ftt - I am still here

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Thu, 15/12/2011 - 10:41

If I've gone quiet as you say, it's because there has seemed little more to say on this forum. But I am still here and have not been totally idle. However, my focus has shifted/widened somewhat and I've been posting more elsewhere, most recently on the PAG site here: http://www.positiveactiongroup.org/index.php?option=com_content&view=art.... Not forgetting of course occasional comments on iomtoday and isleofman.com, Shelter Offshore (re IoM) and Daily Telegraph (re the latest IOM publicity drive).

I've also been following and contributing more to Richard Murphy's blog. See, for example here: http://www.taxresearch.org.uk/Blog/2011/12/13/offshore-faces-a-new-chall...

In the course of all this, I recently dug out and re-read Tony Shearer's forthright written evidence to the Treasury SC, which seems ever more relevant to the present wider debate. Some of his comments must have made him pretty unpopular at the time. For example (talking of the running of large banks):

"... It is also a factor that these executives and non-executive directors live in heady worlds with peerages, knighthoods, feted by politicians and the media, membership of Government think tanks, trips to and parties in Downing Street, rewards beyond the dreams of avarice, and PR firms and departments to obfuscate and to promote them as individuals. All of this makes them believe that they have abilities and skills that they simply have never had.

Coupled with the fact that they are surrounded by auditors, rating agencies, lawyers, head-hunters, remuneration advisers, PR firms and non-executives who want to earn fees and who are getting rich off their patronage, and regulators who had come from the same backgrounds, it is no wonder that the whole system has failed."

It's not surprising that the TSC, while finding it "laudable" that Mr Shearer brought to the attention of the FSA his concerns over the takeover of S&F, they carefully refrained from any direct criticism of the operation of the FSA when they (generously!) concluded that the FSA appeared "to have investigated these concerns". In other words, they preferred to believe the assertions of Hector Sants (who was not even there at the time) than the evidence of the former CEO of S&F (who had not been alone on the board in raising concerns about Kaupthing) - much as the Tynwald SC preferred to accept John Aspden's excuses for the non-respect of the FSC board's resolution to remove exposure to Iceland rather than the hard evidence in front of them.

I have posted some largish extracts from Tony Shearer's evidence on RM's blog, here:
http://www.taxresearch.org.uk/Blog/2011/12/12/the-crisis-at-hmrc/#comments (under comment 5) and here:
http://www.taxresearch.org.uk/Blog/2011/12/12/the-elephant-in-the-middle... (under comment 1).

You are right that I've learnt a lot - or rather have dug myself somewhat out of the sand. Nicolas Shaxson's book "Treasure Islands ..." was a real eye-opener, notably about the nefarious activities of the City of London. Highly recommended to anyone wanting a good read over Christmas (it reads like a detective story and is hard to put down once started): http://treasureislands.org/

MERRY CHRISTMAS to all here - and best wishes for what looks like an uncertain year ahead (as things are going, guess we should probably be thankful that we have at least got 83% back and may be more careful what we do with it! )

Anrigaut


Surely good news though? I

  • Yoda
  • 21/10/08 31/05/09
  • unspecified
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  • Tue, 01/11/2011 - 18:21

Surely good news though?
I like to try and remain optimistic for a positive outcome...this must mean we are still moving in the right direction.
After 3 very long years, Im keeping my fingers and toes crossed for extra good news!!


Yoda, I wishe I shared your

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
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  • Tue, 01/11/2011 - 18:46

Yoda, I wishe I shared your optimism but suspect it has no impact on KSFIOM.

Aside from our predicament, I'm not sure how this thaws Icelandic -UK relations since RBS is a bond holder - so HMG loses on that score.


expatvictim, You too are I

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Online Now
  • Tue, 01/11/2011 - 19:10

expatvictim,

You too are I think over-optimistic. Any impact of this ruling on KSFIOM can only be negative unless by some miracle PwC can get its (unsecured) claim under the PG reclassified as a priority claim.

We have as yet no idea of the relative amounts concerned in Kaupthing, but the bigger the value of priority claims, the less will be left for the rest of us (our PG, the banks, hedge funds etc) to share as unsecured creditors at the back of the queue. In the worst case, our hard-won PG could become effectively worthless.

There may also be a knock-on effect from any reduction in the recovery of KSF-UK from Kaupthing, presuming KSF-UK remains an unsecured creditor of Kaupthing (and thus also at the back of the queue).

On the brighter side, the KSFIOM liquidation itself continues to progress well. Fingers crossed that it continues that way and that the loan book holds good, as it has done so far. The next dividend of at least 9.5% before the end of the year will bring us to over 83% - something few expected back in the dark days.


Anrigut, absolutely - should

  • expatvictim
  • 10/10/08 01/11/10
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  • Tue, 01/11/2011 - 20:25

Anrigut, absolutely - should have qualified what I meant as no 'positive' impact. Thanks for keeping it straight.