The infamous father-son Icelandic businessmen Bjorgolfur Gudmundsson and Bjorgolfur Thor Bjorgolfsson have offered to pay New Kaupthing Bank 40 to 50 percent of their ISK six billion debt to the bank, Frettabladid reports. The pair wishes to pay ISK 500 million of the debt this year. The debt reportedly comes as a result of their company, Samson Holdings, buying a 45.8 percent stake from the State in the newly privatized Landsbanki in 2003.
Kaupthing’s loans to Samson are ISK 4.9 billion without interest, while the Samson’s bankruptcy specification report puts the company’s assets at ISK 5.9 billion, with interest and other costs included, according to Frettabladid sources.
The newspaper reported on 9th April (from sources within Kaupthing) that the bank had subpoenaed the Bjorgolfurs in March due to their debts. However, it is clear that the subpoena came to nothing in the end; but there is no explanation of why. Legally speaking, the father-son business duo are apparently personally responsible for the loans and if one cannot pay, the responsibility automatically falls on the other. The purchasing price of the State’s Landsbanki stake in 2002 was ISK 11.2 billion.
Finnur Sveinbjornsson, the Bank President of New Kaupthing, would not confirm to Frettabladid the status of the bank’s dealings with the pair. “The only thing I will confirm is that negotiations have been taking place on how they can close this debt.” The bank’s Chairman of the Board, Hulda Dora Styrmisdottir, would not say if she felt the Board would approve the Bjorgolfurs’ offer; but she made clear that such a decision would fall to the Board to make in the case of such a potentially big write off.
According to Frettabladid sources, the offer is seen as worthy within Kaupthing and it is thought managers will decide to send it to the Board or Directors.
Is this still old news for the Landsbanki Lux loan holders around Europe-
Now Oct 2013 in UK
Chris Farley UK v Heritable Bank directors for fraud in mortgages 2004
And again:
http://icelandweatherreport.com/2009/07/just-when-you-think-things-cant-get-any-more-corrupt-they-do.html
Although there’s no substantiation, presumably it came from the Icelandic media?
The High Court Judicial Review of Kaupthing UK’s seizure by UK Government took place today. It may be ongoing. I cannot find a word about it anywhere! Anyone know what happened?
As usual, there’s a good article on this over on IWR:
http://icelandweatherreport.com/2009/07/here-are-the-charred-ruins-of-landsbanki.html
Why should the ordinary Icelander be made to pay anything? If the Icelandic government had an insurance scheme in place like the US F.D.I.C., then the burden on each citizen would probably be almost zero. And, where does the Icelandic government get it’s money from anyway; taxes, taxes and yet more taxes (and even more taxes to pay the interest on the loans!).
@Jonathanc
The Icelandic people are being pursued for the first €20,887 of each retail deposit in Icesave. The remainder of each UK retail deposit (in many cases much more than €20,887) is being met by the British taxpayer and in many cases has already been paid – together with the first €20,887 which the Icelandic government has agreed to pay in the form of the loan.
So the Icelanders are not being asked to pay for all the Icesave deposits – just the first part, which Icesave told its depositers in the UK was covered by the Icelandic guarantee.
Whether or not the Icelandic public should have to pay is an entirely different question, about which I have said a few words elsewhere and I’m not going to say any more here.
I do find it funny in a not ha ha way that the shareholders who act responsible and put up personal guarantees for loans ( unlike others ) get these kinds of comments.
Do you see this kind of coverage and articles for others who also have shareholdings with the other banks and loans to pay back ?
Robert Tchenguiz re: Kaupthing ?
Jón Asgeir re: Glitnir and the various other banks took loans from ?
Can be sure that if Jón Asgeir was the one that had owned Landsbanki would get very much less coverage of this.
If the Icelandic people have to pay back 100% of the Icesave debt, then the least these crooks can do is to pay back 100% of their debt. John Paul Getty quote: “If you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the banks problem.”
It’s difficult to form an opinion without the full information, but this is one case when you might expect both the Icelandic people and the foreign creditors to be on the same side.
Why should the debt be written off before the personal liability is exhausted? Assuming that the Emergency Law holds, either the Icelandic people pick up the tab (as New Kaupthing has fewer assets than it should) or the foreign creditors pick up the tab (as the bond to Old Kaupthing is smaller).