September 19, 2011 / 11:51 AM / 8 years ago

UPDATE 1-Tchenguiz settles civil claims against Kaupthing

* Tycoon’s family trust agrees confidential terms with failed bank

* “Mutually acceptable” agreement ends months of legal wrangling (Adds background)

LONDON, Sept 19 (Reuters) - Property tycoon Vincent Tchenguiz has reached a confidential settlement in his pursuit of damages from failed Icelandic bank Kaupthing.

London-based Tchenguiz — one of Britain’s best known real estate investors — said trustees of his family trust and its Euro Group business vehicle had settled all civil claims filed against Kaupthing in July 2010 after the bank’s winding-up committee refused to recognise the trust as a priority creditor following its October 2008 demise.

Tchenguiz and brother Robert, who owned shares in Kaupthing and the bank’s largest investor Exista, argued that the decision jeopardised their relationships with other lenders and inflicted “massive losses” on their business interests.

The Tchenguiz Family Trust valued civil claims against the bank at around 1.5 billion pounds ($2.4 billion) but have agreed to keep details of the “mutually acceptable resolution” private, after suggesting it would “benefit both the Euro Group and the creditors of Kaupthing.”

“All the parties have had to take some very public steps in the wake of the collapse of Kaupthing in 2008, in order to protect their respective legal rights,” Vincent Tchenguiz said.

“However, in the meantime, the strength of our asset base and the commercial opportunities available to us have enabled us to work together with Kaupthing to achieve an outcome which benefits everyone.”

Iceland’s Special Investigation Committee said last April that Robert and parties related to the Iranian-born entrepreneur, owed more than 2 billion euros ($2.8 billion) to the bank and its subsidiaries at the time of its collapse.

The brothers were among nine people briefly detained in March by authorities investigating the failure of Kaupthing, which buckled a year after a debt-fuelled global property boom went sour.

The pair denied any wrongdoing and were released without charge on the same day after answering questions about their relationship with the bank, which has been the subject of an investigation by Britain’s Serious Fraud Office since 2009.

But the arrests prompted Bank of America Merrill Lynch to recall a 124.6 million pound loan to Vincent Tchenguiz’s Peverel Group, pushing the property management business into administration just a week later. ($1 = 0.633 pound = 0.725 euro) (Reporting by Sinead Cruise and Kirstin Ridley; Editing by Tommy Wilkes and Jon Loades-Carter)

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