The deadline to submit purchase offers for Iceland ran out on Wednesday night and since then the Landsbanki resolution committee has been going over the bids with advisers. Old Landsbanki holds 67 percent of Iceland Foods and the bankrupt estate of Glitnir Bank holds ten percent of the company. The two companies are bidding on the combined shares of the two old banks.

At least two offers were received from two investment funds; BC Partners, a British company, on the one hand and Bain Capital, which is based in Boston, USA, on the other. No word has yet been released about the precise value of the offers, but they are thought to be around the GBP 1.5 billion that Landsbanki was hoping for. That is around ISK 300 billion.

The sale proceeds will largely be spent on repaying the British and Dutch governments for the money they lost in Icesave.

One of the founders of Bain Capital is Mitt Romney – who is now seen as one of the most likely Republican presidential candidates for the US election this autumn. Romney headed Bail Capital until 1999, before turning his attention to other projects. He still receives a cut of the company’s profits and has been paid millions of dollars from the company in recent years. Mitt Romney is one of the richest men ever to have tried to become President. His personal assets are reckoned to be as high as USD 250 million.

Icelanders twice voted ‘no’ in referendums on public Icesave repayments, which left the unhappy British and Dutch governments queueing up with other creditors — uncertain how much (if any) of their money they would get back, or when. It quickly came to light that Landsbanki would be able to recover nearly all of the lost money demanded by priority claimants and the Icelandic government declared that the dispute between the three governments should therefore close.

Now that Landsbanki has paid over ISK 350 billion (EUR 2.2 billion) off, Vísir.is contacted the EFTA surveilance authority, the ESA, to ask how that affects it possible case against Iceland.

The ESA information officer, Trygve Mellvang-Berg, responded that the payment will have no effect at all on the case status; but no decision has yet been made about legal action.

“We believe the payment is in accordance with the information we received in the written answer from the Icelandic authorities to the ESA assessment from this summer. Still no decision has been made concerning the next step in the case,” Mellvang-Berg says in a written reply to Vísir.

Steingrímur J. Sigfússon, the Icelandic Minister of Finance, was unwilling to speculate on the ESA’s next step — but said that the payment from the bankruptcy estate should have a positive influence of the atmosphere within the ESA and between the three countries. “It is of course only positive and good that claimants are getting their first payment — and a big payment. I think that this should have a beneficial effect on the atmosphere around all of this,” he said.

Landsbanki has opened a new discussion site within www.landsbanki.is under the name Umraedan, or ‘the Discussion’. A statement from the bank says that Landsbanki wanted to create a place for criticism and expert discussion of economic and finance issues. It instantly raised eyebrows to see that Gordon Brown is among those scheduled to write articles for the site.

Brown was Prime Minister of the United Kingdom when the Icelandic banking system collapsed in autumn 2008. Among his actions which proved unpopular in Iceland was to apply terrorist legislation to freeze Icelandic assets in the UK, mbl.is reports.

Earlier this year Icelandic President, Olafur Ragnar Grimsson, said in a Wall Street Journal interview that he believes Gordon Brown should apologise to Iceland for his behaviour towards the country during the crisis of October 2008.

For his part, Gordon Brown always claimed he was doing what was necessary to protect his own country and felt at the time that he was forced into his actions by the mix of silence and unclear information coming from authorities in Reykjavik.

The statement from Landsbanki says that it is the hope of bank management that an open and informed discussion on the site will form a base on which to rebuild trust in the financial system. The goal is to create a dynamic online environment for discussion and an important meeting place for those wanting to follow developments in the world of finance and economics.

Despite the name, physical location and many staff members, the Landsbanki in operation now is a different bank to the one which collapsed in 2008. Old Landsbanki is in liquidation and expects to be able to repay the British and Dutch governments for the money they lost reimbursing Landsbanki’s Icesave customers in the two countries.

The shop in Akureyri has been in negotiation with Landsbanki for three years over its debts on foreign-currency loans and now the shop’s boss has gone to the press, saying the bank’s intransigence amounts to theft.

The owner of the shop, called Uti og Inni, took out a loan with Landsbanki when they moved to new premises in Akureyri three years ago. In the banking collapse the loan payments and the total amount owed in Icelandic kronur sky rocketed and shop owner Agnes Arnardottir says no positive results have come from regular negotiations since that time, RUV reported.

“They have not wanted to listen to us, we have tried to get a meeting with the top managers. They always say they are looking into the matter and it has been the same story for three years; new documents, new meetings and constantly putting it to some sort of loans committees and suchlike, but nothing comes out of it. Now we are just about done with it all. We look at it like this: that you get some predetermined amount as a loan, you pay some set amount and then there is a set amount left; but if you are forced to pay some tens-of-millions more than that, then it is simply theft!”

Arnarsdottir says that the original loan was ISK 80 million, they have already paid ISK 24 million off in three years and hope to have ISK 56 million left to pay. Landsbanki, however, says the shop still has ISK 130 million more to pay at this time — 50 million more than the original loan amount.

She believes that such loans have already been declared illegal by courts and says that four lawyers have investigated the shop’s case and come to the same conclusion — but the bank disagrees. She has now taken her claim to the Akureyri district commissioner (sometimes translated into English as sheriff), accusing Landsbanki of theft.

She has not hired a lawyer to take the case to court herself, “Because we are just a little company and the bank has loads of lawyers and plenty of money. I just don’t have any money left over and can’t afford to hire a lawyer. I’m just trying to protect myself,” Arnarsdottir says.

The court ruled on eleven different cases relating to the emergency laws and came to the same decision in all eleven cases. In one of them it decided that both Icesave and so-called wholesale loans will be counted as priority claims in the estate of Old Landsbanki — reinforcing a previous decision by the Reykjavik District Court. The public gallery was full when the verdicts were made.

Herdis Hallmarsdottir, a member of the Landsbanki resolution committee, told a press conference after the court verdict that claimants will not be told when payments will be made from the bankruptcy estate before the 17th November, when a claimants’ meeting will be held.

Hallmarsdottir said that the resolution committee is currently sitting on a pot of ISK 500 billion (EUR 3.1 billion) in cash from recovered assets; although some of that money will probably be discounted due to several ongoing disputes. Nevertheless, she said, there should be at least ISK 400 billion (EUR 2.5 billion) ready for payment to wholesale loan claimants and the British and Dutch governments (to reimburse them for covering lost assets in Icesave) within weeks — with more to follow. Priority claims to the estate of Landsbanki amount to a total of ISK 1,320 billion (EUR 8.25 billion).

Meanwhile, the Icelandic government welcomed the court’s decision; saying that all uncertainty surrounding this most fundamental of issues has now been eliminated.

The report was distributed to Icelandic parliamentarians yesterday and claims that the total loss inflicted by the UK at the time is around ISK 2-9 billion (EUR 12.5-56 million) — but probably around five billion (EUR 31.1 million).

The UK government imposed restrictions on Landsbanki and Iceland itself at the height of the banking crisis in 2008 in an effort to stop money being sent “into a black hole” in Iceland. The British government has consistently claimed that the law used was entirely appropriate; but it was a law rooted in anti-terrorism legislation and was harshly criticised within Iceland. Such restrictions on capital flow are highly unusual and damaging between neighbouring allied nations; but London maintains that they were justified at the time the Icelandic banks were imploding.

The new report’s author asserts that the results are a guide only; largely because of how difficult it is to draw a line between the impacts of the terrorism laws and more general impacts related to the collapse. Despite the qualifications, it is still clear that the British actions did negatively impact the Icelandic economy at its most fragile moment.

40 company managers were interviewed for the report, Visir.is reports. In the interviews, they were asked about how the terrorism legislation affected their businesses. The emphasis was placed on Icelandic import and export companies, and banks and financial services companies were excluded. The researchers also took information from the Central Bank of Iceland and the FME national financial regulator and economics experts. The report also goes into the wider impacts of the restrictions and foreign media coverage of them.

Opposition Independence Party MPs first requested such a report a year ago and the report presented was compiled on the initiative of the Ministry of Finance. IFS Analysis conducted the research, expert analysis and production of the report.

Ex-shareholders in the bankrupt bank were called to arms by full-page advertisements in Icelandic newspapers.

According to lawyer Olafur Kristinsson, people started streaming to him on Monday afternoon, and registration lasts all week. He has also had a steady stream of interest by telephone and email from overseas, RUV reports.

Proceeds of asset liquidation in the old bank so far have far exceeded expectations, RUV reported. It is now believed returns will amount to ISK 1,332 billion (nearly EUR 8.2 billion) — which is ISK 13 billion more than needed to meet priority claimants’ demands.

New estimates of the value of the bankrupt bank’s assets at the end of June were presented to creditors yesterday. The figures point to a successful second quarter for the resolution committee — with predicted returns going up by ISK 45 billion between quarters. Counted in foreign currencies, the actual increase is more like ISK 32 billion — the difference being cause by exchange rate fluctuations.

Landsbanki asset recovery and repayment uses a set exchange rate from 22nd September 2009. Using that rate, the predicted asset recovery is ISK 1,332 billion; which is ISK 13 billion more than the amount due to priority claimants. That amount added up to ISK 1,319 billion as of 30th June.

In other words, it is predicted that, at the end of the first two quarters of 2011, the recovery of Landsbanki assets will exceed priority claimants’ claims by ISK 13 billion. The lion’s share of the priority claims come from the British and Dutch governments, who reimbursed Icesave online savers following the demise of Landsbanki.

Haraldsson’s lawyer said the decision of the Reykjavik District Court came as a surprise.

Haukur Thor Haraldsson worked as managing director for Landsbanki and was charged with having transferred ISK 118 million (EUR 708,750 at today’s rate) from NBI Holdings’ account to his own on the 8th October 2008. The transfer happened just two days after the Icelandic banking crash became evident.

The company NBI Holdings was registered to a private investment firm in Guernsey under Haraldsson’s supervision.  Haraldsson claimed he had made the transfer to prevent the money from being swallowed up in the bankruptcy. He claims to have not made the transfer in secret and that personal profit was never his intention.

This was the second time the Reykjavik District Court had ruled on the same case against Haraldsson. The first time he was declared not guilty; but the Supreme Court of Iceland nullified the decision and sent it back to the district court for a re-trial.

Gestur Jonsson, Haukur Haraldsson’s defence, told Visir.is that the decision took him by surprise — especially as one of the judges in the case had judged the defendant innocent last time around. He added that the decision will of course be appealed; but Haraldsson already has an ISK 4 million legal bill to pay — and at present a jail sentence as well.

The country’s biggest retailer, Tesco is also said to be interested in buying up Iceland — as are third and fourth place retailers, Sainsbury’s and Morrisons. There is considerable pressure on Old Landsbanki to get a good price for its stake in Iceland, as the money is needed to help pay off the Icesave debt. A bidding war between Britain’s biggest supermarkets could drive up the price.

The resolution committee of Old Landsbanki holds 67 percent in Iceland, which is a nationwide supermarket chain best-known for its town and city centre locations and its emphasis on low prices, especially on frozen goods. Iceland may not compete with the Big Four (who have over 75 percent market share); but it is by far the biggest company in its particular niche and the business is performing well. The Landsbanki stake was taken from BG Holding when its parent company, Baugur Group went bankrupt.

The Financial Times and Bloomberg claim that a bidding war is in the offing; saying that Asda has appointed Lazard, one of the world’s biggest financial advice agencies to help. Asda is owned by Wal Mart and recently bought its smaller rival Netto.

An information booklet about Iceland is due to be sent to interested parties at the end of the month.

Malcolm Walker, the founder and chairman of Iceland, is also interested in owning more of his company by buying the Landsbanki stake. He offered a billion pounds (ISK 130 billion) last year and that offer is still on the table. He also has the option of equalling the highest bid when the sales process formally gets going.

Economists questioned by RUV believe it is not unlikely that the Landsbanki share in Iceland will go for GBP 1.5 billion – 1.8 billion — which is up to ISK 337 billion.