Trials Could Wipe Out Iceland’s Icesave Debt Skip to content

Trials Could Wipe Out Iceland’s Icesave Debt

icesave-logoCourt cases currently being tried by the winding-up committees of the defunct Icelandic banks Glitnir and Landsbanki could have significant importance for the Icelandic nation regarding the debt accumulated because of the repayment of Landsbanki’s Icesave deposits in the UK and the Netherlands.

According to Fréttatíminn, if so-called wholesale loans and money market loans will be defined as general claims, the priority claims to the banks’ estates will decrease, which would, for example, enable Landsbanki to easily honor its obligations because of Icesave according to the current plans on the reclaiming of the bank’s assets.

The Icelandic government could therefore stop trying to make an agreement with the UK and the Netherlands regarding the arrangement of repayment for Icesave and the Icelandic state would avoid hundreds of billions ISK in interest payments.

The winding-up committee of Glitnir believes the loans do not fall under the definition of deposits and that they’re therefore not priority claims while Landsbanki defines them as priority claims.

Glitnir has referred disputes with a few claimants to the courts to determine whether the winding-up committee’s interpretation is right but in the case of Landsbanki, the owners of general claims have referred their dispute with the winding-up committee to court.

Kristinn Bjarnason at the winding-up committee of Landsbanki told Fréttatíminn that the consequences of the claims to be defined as general would decrease priority claims by approximately ISK 200 billion (USD 1.8 billion, EUR 1.3 billion).

The newspaper was unable to reach Minister of Finance Steingrímur J. Sigfússon for comment on this story.

Click here to read more about Icesave.

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