Supreme Court verdicts on voiding cases
On January 16, the Supreme Court of Iceland reached verdicts in 5 cases related to voiding actions taken by LBI hf. against four counterparties in cases nrs. 191/2013, 356/2013, 359/2013, 412/2013 and 413/2013.
The Supreme Court ruled that conditions for voiding were not considered met following the Resolution Committee's appointment based on that LBI hf. was from that time in a position which can be equated with one where liquidation of its estate has commenced.
The Winding-up Board of LBI hf. undertook voiding actions against sixteen foreign financial institutions and three Icelandic financial institutions in total which had received payment of their ISK money market deposits during the period from October 7 to 27, 2008 on the agreed due dates. The voiding was based primarily on the contention that the payments had reduced LBI's ability to make payment substantially, in the sense of Art. 134 of the Bankruptcy Act, and alternately on Art. 141 of the same Act, according to which voiding may be claimed if a measure improperly benefits a creditor at the expense of other creditors if the debtor was at that time insolvent or became insolvent as a result of the measure, and provided that the party benefiting from the measure knew or should have known of the debtor's insolvency or the conditions that rendered the measure improper.
LBI’s unofficial English translation of the verdict from case nr. 359/2013 (LBI hf. vs. Goldman Sachs International) is available here. Note that the basis and substance of the verdicts from these five cases are the same.