Former Landsbanki CEO to Pay ISK Billions in Damages

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Former Landsbanki CEO to Pay ISK Billions in Damages

The winding-up committee of Landsbanki is demanding a total of ISK 65 billion (USD 535 million, EUR 405 million) in damages from the bank’s former CEO Sigurjón Þ. Árnason in three cases that have been filed against him and other former executives of the banks.

landsbanki_ipa

Photo copyright Icelandic Photo Agency.

One of these cases has been dismissed by Reykjavík District Court but the Supreme Court of Iceland has yet to make a decision on it, Fréttablaðið reports.

“These men are being harassed but at the same time it is forgotten that the winding-up committees have to hire attorneys, who determine their own hourly salaries and in the end the legal costs exceed the collection,” stated Sigurjón’s lawyer Sigurður G. Guðjónsson.

Sigurður maintains that the proceedings are pointless because Sigurjón cannot afford to pay such high damages.

Information officer of Landsbanki winding-up committee Páll Benediktsson said the legal costs haven’t been compiled.

However, the winding-up committee believes that the bank’s executives have caused financial damage to it and therefore compensation is being requested.

In other news, the special prosecutor has issued an indictment against Erlendur Magnússon, a former managing director responsible for Glitnir Bank’s leveraged finance division, for insider fraud, Fréttablaðið reports.

Erlendur is accused of having taken advantage of insider information when he sold the shares his company Fjársjóður ehf. held in Glitnir for ISK 10 million (USD 83,000, EUR 63,000) in March 2008.

The court case will be filed on Monday.

Update: the case against Erlendur has been dropped.

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