DEPOSITORS of Kaupthing Singer & Friedlander Isle of Man are claiming that they have won a legal appeal in Iceland to have a parental guarantee upheld which is binding on the bank.

KSFIOM Depositors Action Group said today that the Supreme Court of Iceland ruled yesterday (Friday) that the guarantee signed by the Icelandic CEO on behalf of Kaupthing hf was valid.

KSFIOM's claim was acknowledged pursuant to its claims before the Supreme Court, under Article 113 of the Bankruptcy Act.

The judgment was handed down on Friday and has been posted (in Icelandic) on the court’s website.

Depositors say the decision of the Supreme Court is final.

KA spokesman for the Action group said, “We naturally welcome this decision, but note that creditors have suffered years of uncertainty and doubt as a result of the dilatory performance of the very institutions and authorities tasked with their protection, and we call on the authorities to put an end to their waiting now by implementing the proposed loan trust.

“Eighteen months after KSFIOM's claim under the guarantee given by its Icelandic parent bank Kaupthing hf was first rejected by the Kaupthing Winding Up Committee, a decision upheld by the Reykjavik court of first instance earlier this year, justice has finally been handed down – by an Icelandic court.

“Despite the efforts of the IOM authorities to play down the potential value to creditors of the contested guarantee which, on their own admission, they did nothing to verify when it was put in place and widely advertised in promotional literature, we estimate that the now validated guarantee may eventually be worth 6 to 8 p/£ to creditors (assuming a pay-out of around 25% from Kaupthing).

“All the more reason for the Isle of Man and UK governments to step in now with a (fully recoverable) loan, thus allowing hard-pressed depositors to recover their funds sooner rather than later.”