Nov. 2 (Bloomberg) -- An Icelandic court ruled that a former manager at failed lender Kaupthing Bank hf must repay loans given to him by the bank to buy its shares.
Ingvar Vilhjalmsson, Kaupthing’s former managing director of capital markets in Iceland, is personally liable for a 2.6 billion-krona ($22.6 million) loan the bank gave him to purchase its shares, according to the ruling announced today by the Reykjavik District Court.
Less than two weeks before Kaupthing’s failure in October 2008, its board had sought to revoke personal liability on loans given to a number of executives in connection with purchasing stock in the bank. The decision followed a drop in the lender’s share price. Vilhjalmsson subsequently moved his shares and the loan into a limited-liability company, two days before Kaupthing collapsed. The court also revoked those transactions.
--Editors: Tasneem Brogger, Jonas Bergman.
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