Further Glitnir moves against Johannesson and others
As reported earlier on Icelog the Glitnir Winding-up board brought charges against Glitnir’s major shareholders, Jon Asgeir Johannesson, Johannesson’s wife Ingibjorg Palmadottir, Palmi Haraldsson, Hannes Smarason, some of their close allies, Glitnir’s CEO Larus Welding and the bank’s auditors, PwC, in New York last year. The fact that the case was brought before a US court brought out a whole raft of information as to how the shareholders allegedly controlled the bank and used it as their piggy bank. The US jurisdiction was chosen on the base of Glitnirs $1bn bond offering in the US, meaning that the actions by shareholders, managers and auditors caused a real loss to the bond buyers.
Last December, the New York court ruled that the case shouldn’t be heard in the US. According to the judge, it would be indefensible to the US tax payer that he, as a US judge, should use his time on a case that belonged in Iceland, not in the US. However, he put some constraints on the defendants: i.a. they wouldn’t be off his hook unless they acknowledged the Icelandic courts jurisdiction in this case.
It seems that the defendants didn’t exactly jump to sign to the prerequisites to throw the case out of the New York court and there was a lot of toing and froing. In the end, the Glitnir WuB lost patience and announced last week it would appeal the ruling. That sped things up. According to Johannesson’s lawyer he couldn’t at all understand this move. There was no reason to appeal since the defendants all accepted what they needed to accecpt.
Today, it was announced that the defendants have, at last, signed what they needed to sign and they have now i.a. acknowledged the Icelandic courts jurisdiction in this case. Consequently, there won’t be any appeal before the New York Court. However, it probably means that the Glitnir WuB will soon be suing the New York defendants in Iceland. By now, the WuB will know a whole deal more than they would if they had taken the cases straight to an Icelandic court. And thanks to the New York charges the general public is now much more informed on how, according to the Glitnir WuB major shareholders, together with managers and with information from the auditor, robbed the bank from inside.
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Well now I see the sense of the New York case.
I must admit I was pretty baffled at first.
Thanks for this summary!
Rik Hardy
8 Feb 11 at 2:47 pm
Yes, there is a sense to it: although the case was thrown out Glitnir still got quite a bit for its expenses.
Sigrún Davíðsdóttir
10 Feb 11 at 4:48 pm