Jon Asgeir Johannesson is seeking a release from Glitnir’s freezing order. In May the Glitnir winding-up committee got an international freezing order at court in London. According to sources close to the case Johannesson in now trying to have the order thrown out. It’s not known yet when the case will come up.
Freezing orders are what lawyers call a ‘nuclear option’ and are, consequently, hard to get. The freezing order was made around the time when the GWC brought out charges against Johannesson, his wife, Palmi Haraldsson and other business partners and ex-Glitnir bankers in New York, demanding back some $2bn. It was also around that time that the GWC passed on material to the Office of the Special Prosecutor in Iceland relating to alleged fraud committed by Johannesson and others before the collapse of Glitnir in October 2008.
A freezing order is only effective if it’s passed without the knowledge of the person hit by it. With a freezing order assets can neither be sold nor made use of in another way. The defendant only gets access to a limit amount of his money to meet everyday expenses.
If a defendant is able to get a release from a freezing order the claimant can be liable for damages done. That means that should Johannesson be successful in getting a release the GWC might be liable to paying damages to Johannesson. This is however part of the equation before demanding a freezing order. No doubt, Glitnir’s legal team has taken this risk into account.
An international freezing order is often issued when the person in question has assets abroad and offshore – certainly the case with Johannesson whose web of companies is both intricate and complicated. In considering if the defendant should escape the freezing order the judge will i.a. consider earlier behaviour of the defendant, i.e. if he has shown the will to co-operate.
One of the companies no doubt hit by the freezing order is JMS Partners, registered in the UK. The owners are Baugur’s ex-CEO Gunnar Sigurdsson and House of Fraser chairman Don McCarthy, who has been close to Johannesson’s UK ventures. The third founder was Piano Holding, a company registered in the Cayman Islands, earlier the holding company for the yacht that Johannesson bought in 2007 with a loan from Kaupthing Luxembourg. Since earlier this year Johannesson figures as the third owner of this company. The freezing order will most likely hit this asset.
Following the freezing order Johannesson was obliged to hand over to the GWC a list of his assets. He’s done that but the list is a very closely guarded secret. The myriad of companies related to company groups in the Johannesson’s sphere indicates that searching for his assets might prove a time-consuming process. Luckily, the experts at Kroll, working for Glitnir, are involved in it – and tracing and recovering assets will be part of their expertise.
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