New Kaupthing’s Lawyers Say Debt Write-Offs Stand Skip to content

New Kaupthing’s Lawyers Say Debt Write-Offs Stand

By Iceland Review

The lawyers of New Kaupthing have concluded that the old bank’s decision to write off the debt of a group of its employees in September 2008—days before the bank collapsed—was legal and cannot be revoked.

The headquarters of Kaupthing in Reykjavík. Copyright: Icelandic Photo Agency.

Minister of Business Affairs Gylfi Magnússon called for an investigation into the matter at parliament yesterday, Fréttabladid reports.

“Unfortunately it seems to be a correct legal conclusion that this act cannot be revoked,” Magnússon said when asked about the matter at parliament.

“But that doesn’t change the fact that it was unnatural and undesirable in all aspects, and it must be investigated whether those who authorized it can be held responsible, either morally or legally,” the minister added.

When asked whether such actions had taken place at other financial institutions as well, Magnússon replied, “This dubious method was not restricted to Kaupthing alone,” although he did not name any other institutions.

The minister concluded that regulations had to be established to prevent such write-offs from ever taking place within the restored banks.

According to Fréttabladid’s sources, the office of the special prosecutor is about to launch an investigation into the write-offs.

Special prosecutor Ólafur Thór Hauksson pointed out that a former Kaupthing shareholder Breki Karlsson had filed a lawsuit because of the write-offs but would not confirm that an investigation of this case was about to begin.

Click here to read more about the write-offs.

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