Landsbanki Committees Seek Compensation From Former Executives

Landsbanki Islands hf’s winding-up and resolution committees are seeking compensation from the bank’s former executives for allegedly granting loans to related parties.

The committees want the executives who ran the bank in 2008 to pay it 30 billion kronur ($258 million) to 35 billion kronur in compensation for losses on the loans, they said in an e- mailed statement today following a creditors’ meeting. Landsbanki, which didn’t name the executives in the statement, said the demands followed an investigation by a forensic team from Deloitte engaged by the bank and law firm Morrison & Foerster.

The loans in question were granted to investment company Grettir and failed lender Straumur-Burdaras Investment Bank, Landsbanki said. Grettir was controlled by Landsbanki’s former owners Bjorgolfur Gudmundsson and his son Bjorgolfur Thor Bjorgolfsson, who was also Straumur’s largest owner before its collapse.

The bank has taken decisions on 9,152 claims filed against it, the committees said in the statement.

“By far the greatest number” of claims discussed at previous creditor meetings “were objected to,” according to the statement.

Before its failure in October 2008, Landsbanki was run by Chief Executive Officers Sigurjon Arnason and Halldor Kristjansson. Calls to the mobile phone of Sigurdur Gudjonsson, a lawyer representing Arnason, went unanswered.

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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