Reykjavík District Court ruled yesterday that Icelandic entrepreneur Jón Ólafsson of Iceland Glacial is to pay Landsbanki GBP 2.3 million (ISK 453 million, USD 3.7 million, EUR 2.8 million) because of a personal guarantee on a loan granted to Jervistone Ltd. by the savings bank Sparisjóður Keflavíkur in 2006.
Sparisjóður Keflavíkur later went bankrupt and was taken over by Landsbanki. However, Jervistone did not repay the loan and so Landsbanki demanded payment from Jón, ruv.is reports.
Jón refused to pay the loan, reasoning that he had been hired as a consultant to Jervistone Ltd. and that Sparisjóður Keflavíkur had demanded that he agree to a surety.
However, after the banking collapse in 2008, the savings bank was unable to service Jervistone Ltd. as agreed and also prevented Jervistone Ltd. from selling its shares and repaying the loan, he stated.
Furthermore, Jón reasoned that Landsbanki was not party to the case. The loan had been granted by Sparisjóður Keflavíkur and it had not been proven that Landsbanki had taken over the loan after the savings bank collapsed.
In addition, the claim had become void, he added.
The judge did not find any of Jón’s arguments strong enough to reject Landsbanki’s claim and ruled that he should pay the bank GBP 2.3 million because of surety on the loan.
Click here to read more about the savings bank’s collapse.
Click here to learn about our custom made photo book Iceland 2012 with the best pictures of the year.