New York Court to Go Over Glitnir Bank Damages

Lucas Gilmore, “Big 4″ observer
February 24, 2011 /

After the New York court handling the complaint filed by Glitnir Bank’s winding-up committee against seven individuals and PricewaterhouseCoopers had dismissed the case December 2010, the same court now changes mood, nodding to conduct another hearing of both sides.

PricewaterhouseCoopers has been implicated in the overstatements of Glitnir‘s financials during the lead up to its collapse, along with Landsbanki, hiding the ailing financial position of the banks from investors.

Glitnir’s winding-up committee was seeking US$2 billion in compensation for the losses of the bank’s shareholders, a call nipped in the bud by a court in New York due to the litigants’ origin and failure to satisfy two conditions.

First was for both the PwC and other seven defendants to concede to Iceland’s jurisdiction over the case. The other was for them to agree to the enforceability of the Iceland court’s decision in New York, which meant confiscation of their assets if they lose.

The two conditions were not met when two litigants, namely Hannes Smárason and Pálmi Haraldsson, failed to sign the agreement before it expired in January 2011, the New York court argued.

However Steinunn Gudbjartsdóttir, chairwoman of Glitnir’s winding-up committee who confirmed the New York court’s decision to reopen the case, said more than 90 percent of the plaintiffs are Americans and so the case belongs to the US.

On the other hand, Glitnir Bank is being challenged by Bracknell Forest Council which seeks £3 million from the failed bank over allegations that Glitnir had promised the councils it owed £200 million overall of a payback priority if it reaches the winding up stage.

Glitnir Bank and its creditors, however, questioned the alleged promise of payback priority.


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