Through elaborate twists and turns Catharine Zeta-Jones had to risk her life in a break in to get her hands on the jewels she coveted in Entrapment.
But if you happen to own or control a business which has been bankrupted in Iceland in the last couple of years, the way back to 2007 is made easy by the country’s banks, accountants and business laws. Through those channels, twisting and turning is made strikingly less hazardous.
DV reports that the owner of Leonard, one of Iceland’s most prestigious stores handling jewellery and fine watches transferred the operations onto a new social security number and signed an agreement with his wife that she would assume control of the new company. Last week he was declared bankrupt himself. But through this manoeuvre the couple has managed to get rid of the old debts but still keep the store.
This is not an exceptional case, but a blueprint for why so many of the most reckless business people of the last decade are still heading the companies they’ve run into the ground.
This is why Geir Haarde and David Oddson used to say their aim was for Iceland to become a “business friendly” country.
I for one don’t understand why business schools bother with explaining basic rules in finance and economics to their students anymore. Why are they still teaching that “those who assume the greatest risks also should reap the greatest rewards because they can also incur the greatest losses”?
Why don’t they just teach students how to create two business entities and shove debts into one and assets into the other? You keep your assets and the debts fly off to “money heaven”.
Wasn’t that also how IceSave was supposed to work for Landsbankinn’s owners and management team?
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Vilhjalm A.
1 year ago
In a normal country this sort of arrangement would clearly not be allowed. It would be called a “sham transaction” and a bankruptcy court would undo it and give the assets to the creditors. Or else the creditors could sue for “self-dealing”, fraud, and so on.
But apparently that’s not how the Icelandic legal system works, in fact the laws here are incredibly primitive. Icelandic corporate law is like playing football or hockey without any referees — anything goes.
nn
1 year ago
These transactions are why all transactions up to 2 years before declaring bankruptcy can be undone (not sure if it is done by the bankruptcy court or creditors).
Many bankers did a similar thing around the time of the crash (giving all their stuff to wives), and if they won’t be made bankrupt for 7 more months all their stuff is safe from the evil bankruptcy court.
Gotta love this system…
A Business Friendly Country | iceland today
1 year ago
[...] More here: A Business Friendly Country [...]
XPS
1 year ago
You will be wondering, but even now you can see that “old” banks has transfered asset to different managamement fonds.
By this creating hidden takeover.
At least creditors cannot anymore aproach for these assets.
snowball
1 year ago
which foreign bank/investor/capital provider wants to pour money in such a mafia system…then better burn your bucks in a more sunny place like sicily.
few days ago, Finnur Sveinbjörnsson -the chief of arion banki- was interviewed by handelsblatt and requested that the german banks change the icelandic debt they hold (~20 bn euro, partly bonds, partly claims from clients) into equity. one german banker said exactly what it was…the best april joke he ever heard. putting money into iceland is a one way ticket…see icesave. the art is now to get the money somehow out again.
again, who wants to be a partner of guys from whom you wouldnt even buy a used bicycle (after all the information available)?!
XPS
1 year ago
Check Icebank.
Might be also some funny cases.
what is left from what they had as assets!!
JP
1 year ago
As I said before – Iceland is the most exciting place to be nowadays from economical point of view
I am also wondering – how the Icelandic income tax system works?
Is there anyone who pays any income tax which does not return to him as all those returns, benefits, allowances and booking abracadabra?
Who contributes to tax base ? Drunkards, smokers and people paying taxes for items bought on eBay ?
Lino
1 year ago
JP,
I beg to differ: Greece is, in my opinion, and not just for economics.
Iceland is yesterday’s news and in a way, nothing really exciting will happen since, again, in my opinion, the possible scenarios have been already been anticipated, just a matter of seeing the application of laws of economics/politics and sociology mechanics. Dull.
Now Greece, there is where new meaningful and interesting developments will take place, a much bigger and relevant lab study. And unlike Iceland, something that cannot easily canned,insulated and discounted
Blubber
1 year ago
If only those wives would divorce them. The divorce proceedings would be hilarious.
JP
1 year ago
Lino, are you sure that nowadays economics sticks to any principles which can be assumed as basic and true?
(Eccept for the Law of The Jungle – that the rich are always in better position than the poor, the stronger are supposed to beat the less powerful if they are not smart enough to escape, and that to be rich one must be producing, earning, exporting more than one spends – that’s only true and working in nature principles of economics, I think)
That is most exciting – the old knowledge and principles and laws proved to be highly innefective and new order is being built.
And I didn’t mean Greek mess – Ireland, Spain, Portugal, Italy and France is wainting in a queue to unrevael his dirty spending secrets in a matter of short time.
So – all EU is shining outside but rotten inside.
And one stupid example of EU actions.
Some years ago EU implemented a law to allow car dealers to sell different brands of cars under one roof – now it is withdrown.
The other is forbiding of using non original aftermarket car parts – both rules are examples of excellent free market ideology LOL
I think it is a start only.
And if this disaster happen to Iceland that Iceland will be in EU imagine that you have to put signs everywhere :
BEWARE OF ICE – IT IS SLIPPERY AND WALKING ON ICE WITHOUT A HELMET COULD LEAD TO INJURY!
IN WINTER IS POSSIBLE SNOWFALL AT ANY TIME.
BEWARE OF RAIN, IT IS WET!
Dadi
1 year ago
JP: Is this what you are talking about?
Telegraph – EU to push UK car prices down
http://www.telegraph.co.uk/motoring/news/2716291/EU-to-push-UK-car-prices-down.html
Can you share a link with us on where this has been withdrawn?
JP
1 year ago
Yes, this law is supposed to be withdrawn from June 2010.
Dadi
1 year ago
JP, do you have any links on why this law is being withdrawn?
I cannot find anything about it.
JP
1 year ago
Information was published in Polish media today straight from Brussels. We have some highly positioned guys there. Probably no official links available yet.
Lino
1 year ago
>Lino, are you sure that nowadays economics sticks to any principles which can be assumed as basic and true?
I never said they were true, neither in the moral sense or scientific adherence to physical law beyond that of natural greed (greed is not necessarily bad).
Economics is not an exact science, it’s a human science and as such has lots to do, perhaps more, with behavioural psichology than applied math.
To push to the extremes, even math is a construction, not necessarily true, since based on axioms that are big “blocks of faith” to put it ironically.
However under a certain set of conditions, there are regularities that appear and repeat that could be approximated reasonably to “laws”.
More paradigm of thought and state of mind than natural law like gravity (and even there you could say that even Newtonian laws of physics are not true if you go to quantic level…).
>That is most exciting – the old knowledge and principles and laws proved to be highly innefective and new order is being built
completely agree
>And I didn’t mean Greek mess – Ireland, Spain, Portugal, Italy and France is wainting in a queue to unrevael his dirty spending secrets in a matter of short time
Greece could be just the first… could you imagine the scenario of multiple and compound sovereign defaults inside Eurozone? Lots and lots more exciting thant one single minor after all, implosion in Greece…
and Greece could be exciting on other planes of thought: think about possible coup (political or military) and developments (even positive ones as well as warlike) in greek/turkish (war)game that has been going on for centuries…
Even looking at the high stake poker games of brinkmanship inside the Eurozone is just funny where the players are not just “Greece vs the rest of Eurozone”.
>So – all EU is shining outside but rotten inside
I agree in that there’s lot of propaganda in “EU is good” though I do not agree that everything is rotten. As in many things there are pro/cons, price to sacrifice in order to achieve something else and many many compromises, some necessary, some unholy.
>The other is forbiding of using non original aftermarket car parts – both rules are examples of excellent free market ideology LOL
in many ways EC/UE has a free market ideology but a peculiar one, not free market in the liberal sense LOL: the funny thing is part of EU states feel the EU is too free market, other EU state feel it’s not enough LOL damned if you do, damned if you don’t
>And if this disaster happen to Iceland that Iceland will be in EU imagine that you have to put signs everywhere :
BEWARE OF ICE – IT IS SLIPPERY AND WALKING ON ICE WITHOUT A HELMET COULD LEAD TO INJURY!
IN WINTER IS POSSIBLE SNOWFALL AT ANY TIME.
BEWARE OF RAIN, IT IS WET!
forgive me but that sort of patronizing is EXACTLY the sort of “guidance” that Icelanders would have badly needed before they started to play irresponsibly with fire and IMHO they need even more right now: for the same reasons as before.
Dadi
1 year ago
JP, could you please provide us with the facts once you have them. I would assume that something like this would be easy to find on EU websites or in the media in Europe somewhere but for some reason I cannot find anything about it.
Inger Le Gué
1 year ago
Dadi, I think that what JP refers to is article 12.3 of the so-called
Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector.
In that article it says:
Article 12
Entry into force and expiry
1. This Regulation shall enter into force on 1 October 2002.
2. Article 5(2)(b) shall apply from 1 October 2005.
3. This Regulation shall expire on 31 May 2010.
So it is not that the regulation is/ will be withdrawn. The regulation just expires by the end of May.
Inger Le Gué
1 year ago
Forgot to mention that as far as I know there is no new regulation in place yet. A draft was published in December 2009 (see http://ec.europa.eu/competition/consultations/2010_motor_vehicles/draft_ber_en.pdf ) and the end date of the public consultation was 10 February 2010.