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Landsbanki Sues Former Executives for Damages

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Landsbanki Sues Former Executives for Damages

The winding-up committee of Landsbanki has decided to file charges against seven of the bank’s former executives, demanding that they pay the bank’s estate over ISK 31 billion (USD 248 million, EUR 194 million) in damages because of almost ISK 34 billion paid out of the bank the day before it collapsed on October 6, 2008.

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The headquarters of Landsbanki. Photo by Páll Stefánsson.

These are former bank directors Sigurjón Þ. Árnason and Halldór J. Kristjánsson and four of the bank’s former board members, Kjartan Gunnarsson, Þorgeir Baldursson, Svafa Grönfeldt and Andri Sveinsson, along with Jón Þorsteinn Oddleifsson, former Landsbanki treasury director, ruv.is and Morgunblaðið report.

Charges were not filed against former chairman of the board Björgólfur Guðmundsson because he has been declared bankrupt.

Charges have also been filed for damages against 25 insurance companies which issued liability insurances for the bank’s former executives and board members.

“It is demanded that the defendants pay the plaintiff damages due to inadvertence which led to significant funds being paid out of Landsbanki Íslands on October 6, 2008, when it was clear that the bank was insolvent,” the subpoena reads.

The winding-up committee submitted subpoenas to some of the defendants yesterday and notified others that they could expect to be served.

On October 6, the bank’s last day of operations before it was taken over by the Financial Supervisory Authority, significant funds went from the bank to the mutual fund Landsvaki hf. and the investment banks Straumur-Burðarás fjárfestingarbanki hf. and MP fjárfestingarbanki.

One of the former board members sued, Kjartan Gunnarsson, released a statement in response to the subpoena saying that it is his and his lawyer’s evaluation that the lawsuit is ungrounded, adding that the payments in question were not discussed by the board. Also, Landsbanki was solvent at the beginning of October 6, 2008, Kjartan reasoned.

Click here to read about the winding-up committee of Glitnir suing former executives of the bank.

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