THE SUPREME COURT OF ICELAND HAS REJECTED LBI’S REQUEST FOR AN APPEAL ON THE APPELLATE COURT LANDSRÉTTUR´S DECISION IN THE GRETTIR CASE
On 15 September 2021, the Supreme Court of Iceland announced that it had rejected LBI's request for an appeal on the appellate court Landsréttur’s decision in the Grettir case. At the same time, the Supreme Court also announced that it had rejected a request for appeal from one of the defendants, Sigurjón Árnason (SÞÁ) former CEO of Landsbanki Íslands hf.
The Supreme Court’s reasoning for its decision is short. It simply states that the requirements for an appeal have not been met. The Supreme Court states that a judgement in the case would not be of value as a precedent in addition to existing court decisions. It further states that it cannot be seen that the decision of Landsréttur is obviously wrong on merits or in form.
This decision has the consequences that the Landsréttur´s decision is final and LBI will need to pay legal fees to the D&O Insurers, the former CEO, Halldor J. Kristjansson, and the former Head of Corporate Finance aggregating ISK 66m (+ default interest).
The Straumur case, now before the Reykjavik District Court, will be discontinued. The decision on costs payable by LBI to the defendants in that case will be determined by that court.
SÞÁ, (former CEO) has been required by the Landsréttur Appeal Court to pay ISK 50m (+ default interest) to LBI. If any ISK amount is received from SÞÁ, then according to the stability contribution framework implemented and executed in 2015/2016, LBI will need to transfer such payments as additional stability contribution.
LBI’s reported financial statements have not included any recovery from the Grettir or Straumur cases (other than those already collected in settlements from certain insurers in November 2018). Accordingly, other than with respect to the prospective cost obligations above, the Supreme Court decision will not impact the reported values in LBI’s future accounts.