The financial crisis had a major impact on society, financial enterprises and, not least, the customers of the financial enterprises subject to resolution. The comprehensive financial problems experienced by certain institutions, which led to Finansiel Stabilitet having to assume control and wind up several institutions, were caused by general market developments, but also by decisions made by the managements of the individual banks wound up.

After the financial crisis, Finansiel Stabilitet assumed control of two more institutions: Andelskassen J.A.K. Slagelse and Københavns Andelskasse.

Out of consideration for the conception of justice, and to assess and decide whether the former managements could be held liable for the losses incurred on exposures etc., Finansiel Stabilitet instituted liability lawsuits in nine out of the total of fourteen institutions taken over. The assessment of whether a liability lawsuit was to be instituted was made on the basis of an external legal enquiry. It was assessed whether the institutions had acted in such a way as to give rise to liability.  The results of the legal enquiries led to the institution of liability lawsuits against the former managements of Roskilde Bank, ebh bank, Løkken Sparekasse, Capinordic Bank, Amagerbanken, Eik Bank Danmark, Eik Bank Færøerne, Andelskassen J.A.K. Slagelse and Københavns Andelskasse. In the case of Sparekassen Østjylland, Max Bank, Fjordbank Mors, Fionia Bank and Gudme Raaschou Bank, which had also been taken over by Finansiel Stabilitet, Finansiel Stabilitet did not institute any liability lawsuits.

Decisions have now been delivered in the liability lawsuits instituted in the wake of the financial crisis, and these decisions will be accounted for below. As the legal aftermath of the financial crisis is therefore considered finalised, the coming annual reports will not include such a review.

The lawsuit against the former management of Capinordic Bank was the first liability lawsuit to be tried in court. In October 2015, the High Court of Eastern Denmark delivered a decision against the three defendant management members, who were ordered to pay damages in a total amount of DKK 90.5 million. The decision was appealed by the defendants and subsequently by Finansiel Stabilitet. The Danish Supreme Court in January 2019 delivered its decision, which was in reality an affirmation of the High Court’s decision. Final damages were established at DKK 89 million, plus statutory interest accrued from December 2010. At the time of the Supreme Court decision, the total amount of damages including statutory interest was calculated at DKK 141 million.

In the case, Finansiel Stabilitet had served notice on additional management members, and in June 2019 an action was brought against four of these executives with respect to their liability for participating in the granting of facilities. The Supreme Court established liability in damages in this case.

The court delivered a judgment by default against one of the defendants, who was ordered to pay Finansiel Stabilitet DKK 19 million plus statutory interest. Furthermore, agreements were entered into with two of the defendants to withdraw the action against them while they acknowledged their liability and paid an amount of damages. At the trial hearing in August 2021, a decision was delivered against the fourth defendant in Finansiel Stabilitet’s favour.

In June 2017, a decision was delivered in the liability lawsuit against the former management of Amagerbanken. The court found in favour of the defendants. Finansiel Stabilitet subsequently appealed part of the district court’s decision. In June 2019, the High Court of Eastern Denmark delivered its decision in the case.

The High Court of Eastern Denmark reversed the district court’s decision to the extent that eight of the former members of management were to pay damages of DKK 225.5 million plus statutory interest. Finansiel Stabilitet was ordered to pay legal costs for the district and high court in the total amount of DKK 40 million.

The executives found liable applied to the Danish Appeals Permission Board for permission to appeal the case to the Supreme Court, and further thereto Finansiel Stabilitet also sent an application to the Appeals Permission Board. In October 2019, Finansiel Stabilitet and the eight executives found liable entered into an agreement to settle the liability lawsuit. As part of the agreement, the eight management members found liable were to pay DKK 255.5 million, and both parties were to withdraw their application to the Appeals Permission Board. The agreement was made in full and final settlement of any claims, and the executives found liable distributed the amount to be paid among themselves.

In October 2018, the High Court of Eastern Denmark delivered a decision in the lawsuit against the former management and auditors of Eik Bank Danmark, by which the four management members were ordered to pay damages in the amount of DKK 28.6 million plus statutory interest, for a total amount of DKK 42.6 million. The court found in favour of the two other members of management and the auditors. Finansiel Stabilitet was ordered to pay legal costs in the amount of DKK 39 million. The four management members, and subsequently Finansiel Stabilitet, appealed the decision. The scope of the appeal was limited to two exposures. The Supreme Court delivered its decision on 22 June 2020, finding in favour of the members of management previously found liable, and Finansiel Stabilitet was ordered to repay the damages received and to pay DKK 17.7 million in legal costs.

The external auditors had been granted permission to appeal the High Court’s decision on legal costs separately. The Danish Supreme Court in October 2020 delivered its decision in this case, upholding the High Court’s judgment on legal costs.

In the lawsuit against the former management of Andelskassen J.A.K. Slagelse, the Court of Glostrup delivered its decision on 15 November 2019, by which the former CEO was ordered to pay DKK 1 million, DKK 200,000 of which was to be paid jointly and severally with the former Chairman of the Board of Directors. The CEO appealed the decision to the High Court of Eastern Denmark. The High Court of Eastern Denmark delivered its decision in the case on 6 July 2021, upholding the district court’s decision.

On 31 January 2020, a decision was delivered by the High Court of Western Denmark in the case against the former management and auditors of ebh bank. One former management member – the CEO – was ordered to pay a little more than DKK 2 million plus statutory interest. The court found in favour of the other management members and the auditors, and Finansiel Stabilitet was ordered to pay legal costs of DKK 121 million.

On 26 February 2020, Finansiel Stabilitet appealed parts of the decision against the management member found liable with a claim for DKK 100 million. The Danish Supreme Court on 8 April 2022 delivered its decision in the appeal, upholding the High Court’s judgment. Finansiel Stabilitet was ordered to pay DKK 3 million in legal costs.

On 28 February 2020, a decision was delivered by the High Court of Western Denmark in the case against the former management and external auditors of Løkken Sparekasse. The decision was given in favour of the defendants, and Finansiel Stabilitet was ordered to pay legal costs of DKK 34 million. Finansiel Stabilitet appealed parts of the decision with respect to the former CEO to the Supreme Court, the claim being limited to DKK 50 million. The Danish Supreme Court on 2 June 2022 delivered its decision in the case, upholding the High Court’s judgment. Finansiel Stabilitet was ordered to pay DKK 1.75 million in legal costs.

In the lawsuit against the former management and auditors of Roskilde Bank, the High Court of Eastern Denmark delivered its decision in November 2017. The decision was given in favour of all the defendants, and Finansiel Stabilitet was ordered to pay legal costs of DKK 72.5 million. Finansiel Stabilitet appealed the decision with respect to the CEO and the Board of Directors.  The Danish Supreme Court on 1 December 2022 delivered its decision in the case, by which the CEO was ordered to pay DKK 232 million. The claim against the Board of Directors was dismissed. Finansiel Stabilitet was awarded an amount of DKK 2 million in legal costs from the management member found liable and was ordered to pay legal costs of DKK 23 million to the board members against whom the claim was dismissed.

The external auditors had been granted permission to appeal the High Court’s decision on legal costs separately. This appeal was processed by way of written proceedings. In April 2019, the Supreme Court delivered a decision in the appeal regarding legal costs. The external auditors were awarded an additional amount of DKK 11 million in legal costs.

In November 2019, a decision was delivered by the district court of the Faroe Islands in the lawsuit against the former management of Eik Banki Færøerne, by which three management members were ordered to pay damages in the total amount of DKK 150 million plus statutory interest. The court found in favour of one management member, and Finansiel Stabilitet was ordered to pay DKK 8.9 million in legal costs. The management members found liable appealed the decision.  On 10 January 2023, a decision was delivered by the High Court of Eastern Denmark in the appeal, by which a former management member – the CEO – was ordered to pay DKK 86 million. Finansiel Stabilitet was ordered to pay DKK 17 million in legal costs to the board members against whom the claim was dismissed.

In the trial hearing before the district court of the Faroe Islands, Finansiel Stabilitet had withdrawn the case in respect of the external auditors. In connection with the decision, the district court also decided on the issue of legal costs in relation to the withdrawn lawsuit. Finansiel Stabilitet was ordered to pay DKK 12 million in legal costs. Finansiel Stabilitet appealed the issue of legal costs, it being noted that Finansiel Stabilitet paid DKK 3.6 million, which was the amount Finansiel Stabilitet believed would have to be paid with certainty.

In a decision delivered on 17 January 2022, the High Court of Eastern Denmark decided on the issue of legal costs, quashing the decision by the district court of the Faroe Islands and ordering legal costs of DKK 3.6 million to be paid, which was the amount already paid by Finansiel Stabilitet.

In May 2019, Finansiel Stabilitet filed two liability lawsuits against the former management of Københavns Andelskasse.

In the case concerning Københavns Andelskasse’s acquisition of the company OTC-listen, the District Court of Copenhagen on 25 May 2022 delivered a decision, by which the claims against all management members were dismissed. Finansiel Stabilitet was ordered to pay legal costs in the amount of DKK 5.7 million. Finansiel Stabilitet has appealed the decision to the High Court of Eastern Denmark.

In the other case, which concerned management’s liability in connection with losses on two loan exposures, the District Court of Copenhagen on 16 August 2022 delivered a decision, by which two management members were ordered to pay damages of DKK 2.5 million in respect of one of the loan exposures. Finansiel Stabilitet was ordered to pay legal costs of DKK 700,000 to the management members against whom the claim was dismissed. The two management members found liable were ordered to pay legal costs of approximately DKK 400,000 to Finansiel Stabilitet. The two management members found liable have appealed the decision to the High Court of Eastern Denmark. Finansiel Stabilitet has subsequently appealed the decision, claiming that the decision of the District Court be upheld, and appealed the dismissal of the claim related to the other loan exposure, but only for one of the management members.

Expenses related to liability lawsuits brought against the former managements of banks taken over amounted to DKK 52 million in 2022.  Accumulated expenses related to liability lawsuits brought against former bank managements have run into DKK 589 million to date, including costs of preparing legal enquiries. To this amount should be added legal costs that Finansiel Stabilitet has been ordered to pay amounting to DKK 389 million, of which DKK 304 million represents legal costs to the public funds. Accumulated legal costs thus amount to DKK 978 million.

In the liability lawsuits, Finansiel Stabilitet has so far been awarded damages, which with the addition of statutory interest as of mid-February 2023 amount to a total of approximately DKK 847 million. In eight of the lawsuits now settled, Finansiel Stabilitet has been able to book approximately DKK 385 million.

In November 2019, the Danish government set up a committee on assessment of stricter liability for management members, etc. in financial enterprises. Finansiel Stabilitet had a seat on the committee, allowing it to draw attention to matters based on experience from the liability lawsuits.

In February 2023, a bill was tabled to implement the proposals submitted by the liability committee in its report.