Expat depositors battling for the return of their entire savings from Landsbanki Guernsey have learned they face hefty legal costs if they wish to continue the fight.
At a settlement meeting with the Icelandic Winding Up Board (WUB) on August 13th, depositors' claims for "priority status" were rejected and deferred to the district court of Reykjavik where legal representation could run into the thousands.
In contrast, UK and Dutch depositors with Landsbanki subsidiaries, represented by their respective governments, were awarded priority status and refunded in full within weeks of the bank's collapse in October 2008. 24-Aug-10.
Some depositors whose savings were trapped when Guernsey's Landsbanki bank collapsed, and who last week were told they must go to court in Iceland if they wish to continue their quest to reclaim all of their money, are vowing to fight on.
“We have said right from the beginning that we are after 100% of our money back,” Gary Blanchford, deputy chairman of the Landsbanki Guernsey Depositors' Action Group (LGDAG), said in an interview with the BBC, in which he also criticised the Guernsey government for failing to ensure that their depositors were treated on an equal footing with those in the UK and the Netherlands. International Adviser website 18-Aug-10.
The Icelandic authorities have been given an extended deadline to respond to a letter from the EFTA concerning the Icesave dispute.
ESA, the EFTA Surveillance Authority, sent a letter in May detailing that it feels the Icelandic government must pay the Netherlands and the United Kingdom back the minimum contractual amount for the money the two countries spent in compensating customers of the failed Icesave internet bank, run by Iceland’s Landsbanki.
RUV reports that the Icelandic government was given two months to respond to the letter or face possible expulsion from the European Free Trade Association. The original deadline was next Monday, but has now been extended to the beginning of September – possibly because of ongoing negotiations between the three countries involved.
Iceland has always expressed its intention to pay, but the EFTA wants to know when. [Ends] 24-July-10.
Iceland will come under pressure to resolve the dispute over Icesave accounts and overhaul its fishing policies in talks to join the European Union that are scheduled to start next week, a draft EU document showed.
Negotiations are slated to begin on July 27 as Britain and the Netherlands seek compensation for losses of as much as $5.1 billion suffered by their investors in the 2008 collapse of Landsbanki Islands hf, which offered the high-yielding Icesave Internet accounts. . .
While the EU draft doesn’t mention the bank-compensation clash, it points out that any EU country could halt the talks at any time. The draft also doesn’t explicitly call on Iceland to give up whale hunting, a demand made by the European Parliament in a non-binding resolution this month. 22-Jul-10.
Representatives of Iceland, Britain and the Netherlands met in Reykjavik this week to prepare further talks on a new repayment deal to cover the collapse of the Icesave bank, the Icelandic government said Friday. . .
"The purpose of the meetings was primarily to exchange information and to prepare further talks later this year," it said, pointing out that "this is the first time the parties meet since the talks were adjourned on March 5." 02-Jul-10.
A group of international banks has filed a legal challenge against the Landsbanki dissolution committee claiming that they should be treated as priority claimants. If they win, only 30-35 percent of the bank’s assets will go to pay Icesave.
According to Old Landsbanki, Iceland’s emergency banking laws allow the bank to classify the Dutch and British depositors’ insurance funds as priority claimants; but other creditors to the bankrupt bank, including big banks and bondholders, have decided to challenge the decision in court under Iceland’s bankruptcy laws. 29-May-10.
The European Free Trade Association (EFTA) yesterday sent a letter outlining its decision that Iceland is legally bound to insure the minimum deposit guarantee to British and Dutch Icesave account holders. The guarantee is part of Iceland’s EEA (European Economic Area) membership agreement.
The minimum depositors’ guarantee is EUR 20,000 per saver in the failed Icesave internet savings accounts which were run as a branch of Landsbanki before it collapsed in autumn 2008. The EFTA report states that the UK and the Netherlands have reimbursed their own savers and that Iceland’s severe recession does not diminish the country’s obligation to pay the two governments back.
The Icelandic government had insisted in a letter to the EFTA that the existence of a depositors’ guarantee fund in the country was enough to fulfil the requirements of the EU directive on cross border banking and also that the rules do not fully apply in the case of the collapse of an entire national banking system (as happened in Iceland). The EFTA disagrees with this reading of European law. 27-May-10.
It’s as if Icesave has completely evaporated from the agenda in the three countries involved – Iceland, the UK and the Netherlands – but the accounts haven’t yet be settled. Iceland still owes money to the UK and the Netherlands as the two countries compensated the deposit holders according the EU insurance guarantee regulation.
The IMF has recently passed fund’s programme on Iceland to the next level. The prerequisite had been to solve the Icesave dispute – since it is a major economic variable – but Iceland found a way to satisfy the fund’s demand though nothing has been resolved. As so often, Iceland seems hell-bent on wriggling out of the Icesave fetters rather than solving the matter. It remains to be seen how the matter evolves now that there is a new government in place in the UK. Sigrúm Davidsdóttir's Icelog Blog - 19-May-19.
A US-based journalist has interviewed islanders who lost money in the Landsbanki collapse for a book about the global financial crisis.
Michael Casey, who writes for Dow Jones and the Wall Street Journal, was in the island yesterday and also spoke to Chief Minister Lyndon Trott and Treasury minister Charles Parkinson.
Mr Casey (pictured) said he wanted to focus his book on the human stories that have come out of the financial crisis and show how all parts of the world were affected by it because they were linked. 19-May-10.
REYKJAVIK — Failed Icelandic bank Kaupthing said Monday it would seek to recover 32 billion Icelandic kronur (197 million euros, 244 million dollars) from former executives who had taken loans to buy shares in the bank.
Around 80 former employees, many of them former top executives, have been informed they would be held personally liable for huge loans they had taken to buy shares in Kaupthing before it collapsed in October 2008, administrators of the bank's liquidation said in a statement. . .
Iceland's third failed bank Landsbanki has also said it is planning a lawsuit to try to get back as much as 1.5 billion euros from former executives and shareholders. 17-May-10.