UK councils in Glitnir Bank court showdown

Five British local councils and Oxford University are fighting to get their money out of the estate of Iceland’s failed Glitnir Bank – but the bank’s resolution committee does not want them to be classed as priority claimants. At least ISK 100 billion (USD 850.4 million) is at stake.

A large number of British local governments, organisations, charities and businesses invested with Glitnir’s UK branch before the banking crisis – and now a group of them have brought their case to the Reykjavik District Court. Six cases were brought to the court yesterday on behalf of Oxford University, Kent County Council, Norfolk County Council and others.

All the cases have the same goal: to have their claims classified as priority deposits due for pay out immediately under the auspices of the emergency banking laws the previous Icelandic government introduced, RUV reports.

The laws classify depositors as priority claimants; and the Landsbanki resolution committee has recognised this distinction. But in this case with Glitnir, the amounts are very high and other claimants in the banks – notably other international banks and finance companies – are claiming the emergency laws do not count. That being the case, depositors would have only the same rights as every other claimant. So far claims on the old banks processed through the Reykjavik District Court have amounted to nearly 2,000 billion kronur.

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