Sigrún Davíðsdóttir's Icelog

Glitnir pays out its priority claims

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Today, the Winding-up Board of Glitnir is paying out the whole of its priority claims, in total about £500m. About half is being payed out at once, the rest are claims that are still disputed. The disputed sum now goes to an escrow account, which will collect interest rates as of today. The happy recipients of the pay-out are 55 UK local councils and universities.

After taking over the failed bank, the ResCom of Glitnir (contrary to Kaupthing) never brought its foreign currency to Iceland which means that the currency controls in Iceland don’t affect its currency holdings. The Glitnir currency holdings cover about 80% of the priority claims now paid out. The remaining 20% are paid out in Icelandic krona. Because of the currency control, this 20%, in Icelandic krona, is being held on an account with the Central Bank of Iceland. The owners of these krona can participate in the CBI’s auction – or if they are adventurous they could of course use their krona to invest in Iceland, buy goods there etc. The bids for the next CBI auction have to be in by March 28, see the CBI’s announcement here.

They payout has been widely covered in the UK press (I’ve been on three BBC interviews) and has obviously raised hopes for more money to return. Icesave depositors have been paid by the UK Government so there are no angry depositors camping outside the Icelandic Embassy – now it’s the UK Government waiting for the Icesave money from the Landsbanki WuB. Then there is of course this small matter of unpaid interest and the ESA case – yet another collapse saga.

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Written by Sigrún Davídsdóttir

March 16th, 2012 at 4:34 pm

Posted in Iceland

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