Operating expenses of Glitnir’s Resolution Committee and Winding-up Board in 2009

In response to a media query in Iceland, Glitnir’s Resolution Committee and Winding-up Board provide the following summary of aggregate operating expenses for 2009.  It is important to bear in mind that the cost of managing the estate is paid by creditors, around 80% of whom are foreign parties. Creditors’ representatives monitor Glitnir’s activities closely and are informed regularly and in detail of the progress of events. In order to maximise the value of the assets of Glitnir’s estate, creditors’ representatives have placed major emphasis on obtaining the advice and assistance of the most capable experts in each area. Due to the scope of the estate and complexity of the tasks to be dealt with, it has naturally proven necessary to seek the assistance of international experts to a major extent.

The aggregate expenses of Glitnir's Resolution Committee and Winding-up Board in 2009 amounted to ISK 4.6 billion. The estate’s total assets, excluding write-offs and set-offs, amounted to ISK 1,898 billion as of the end of June 2009. Operating expenses were therefore equivalent to 0.25% of gross assets in 2009. Total assets, net of write-offs and set-offs, amounted to ISK 723 billion. Operating expenses therefore amounted to 0.65% of total net assets.  

Salaries and related expense of employees amounted to ISK 0.3 billion, and the average number of employees during the year was 22. Íslandsbanki was paid ISK 0.7 billion in 2009, for a variety of services under a service agreement, including systems rental, computer services, back office functions, financial and accounting services, as well as work on gathering data for public bodies such as the Parliamentary Investigation Commission, Special Prosecutor, Directorate of Tax Investigations in Iceland and Director of Internal Revenue.

Expert services purchased, including VAT as appropriate, amounted to ISK 3.4 billion. Of this amount, payments to foreign parties were ISK 2.6 billion and ISK 0.7 billion were payments to domestic parties. Figures for services purchased from domestic parties include payments to members of Glitnir’s Resolution Committee and Winding-up Board. Expenses due to expert services purchased can be expected to decrease in coming year as, due to their nature, such costs are highest during the first two to three years of the winding-up proceedings.

The leading foreign parties from whom services were purchased in 2009 were (in alphabetical order):

• •    Arntzen de Besche Advokatfirma AS, law office, Norway
• •    BCF, law office, Canada
• •    Cadwalader, law office. UK
• •    Deloitte, auditing and consultancy firm, UK
• •    Deutsche Bank, UK
• •    DLA Piper, London, law office, UK
• •    Forretningsadvokatene, law office, Norway
• •    Houlihan Lokey, consultants, UK
• •    KROLL, financial investigators, UK
• •    KEWS Clifford Change, law office, UK
• •    Morrison & Forrester, law office, USA and UK
• •    McGuireWoods, law office, UK
• •    McCann FitzGerald, law office, Ireland
• •    O´Melveny & Myers LLP, law office, USA
• •    Schneider;Schwegler, law office, Germany
• •    Slaughter & May, law office, UK
• •    Steptoe & Johnson LLP, law office, USA
• •    Sungard, financial consultants, UK
• •    UBS, Investment consultants, UK and USA

Those domestic parties from which Glitnir purchased services for ISK 5 million or more during 2009 were:

• •    AT ráðgjöf ehf.
• •    BBA Legal ehf.
• •    BT sf.
• •    Borgarlögmenn ehf.
• •    Deloitte hf.
• •    Ernst & Young hf.
• •    Gagnavarslan ehf.
• •    Jónatansson & Co. Legal ehf.
• •    Juris hf.
• •    KPMG hf.
• •    Krónos ehf.
• •    Lausnir lögmannsstofa sf.
• •    LM lögmenn sf.
• •    Lex ehf.
• •    Logos slf.
• •    Jónsson & Hall Law Firm hf.
• •    Lögfræðimiðstöðin ehf.
• •    Lögfræðiráðgjöf Páls E slf.
• •    Safn ehf.