Two Icelandic companies go bankrupt in unusual fashion

reykjavik3Debts in the bankrupt estates of two companies owned by the lawyer Bjorn Thorri Viktorsson in Reykjavik amount to ISK 140 million (over USD 1 million). The companies changed name shortly before going bankrupt.

Viktorsson established the Midborg estate agency and the Logmenn Laugardal law firm 14 years ago but the companies changed their names to M182B and L182A last autumn shortly before being declared bankrupt. At the same time, two new companies were established with new social security numbers under the old names Midborg and Logmenn Laugardal, RUV reports.

The bankrupt law firm now called L182A owes ISK 15 million, 13 million of which is owed to the State. The estate agent now called M182B owes ISK 125 million, including 62 million to Byr Savings Bank and 30 million to New Landsbanki.

The head of the companies’ bankruptcy proceedings told RUV that it is already clear assets will not cover the debts.

The news of a company filing for bankruptcy in Iceland is common enough and the amounts owed in this case are not extraordinary; it is the manoeuvres carried out in the lead up to their collapse which are raising eyebrows in Reykjavik.

The ‘new’ companies Midborg and Logmenn Laugardal are still in operation.

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