Karl Wernersson remains bankrupt despite acquittal

Karl Wernersson, a former major investor, says he remains bankrupt despite an acquittal in the criminal case that led to his imprisonment. He discussed the nearly 20-year legal battle at a meeting in Smárabíó, mbl.is reported.

Wernersson said he held the meeting because 17 years have passed since a special prosecutor began investigating him over alleged breach of trust involving his company Milestone ehf.

In 2016, Iceland’s Supreme Court sentenced him to three and a half years in prison, which he served. He later took the case to the European Court of Human Rights, which agreed to examine it. Wernersson then reached a settlement with the Icelandic state and had the case reopened. The Supreme Court subsequently dismissed the case, leaving in place his acquittal by a lower court.

A separate ruling, based on the Supreme Court conviction, ordered Wernersson to pay substantial damages to Milestone’s bankruptcy estate. He was then declared bankrupt and remains so.

“My acquittal stands, but while the conviction was in force I was ordered to pay high damages to Milestone’s bankruptcy estate. When that terrible criminal case was corrected, I could not get the damages ruling corrected,” he told mbl.is. He said he had been convicted of no crime and had a clean criminal record, yet still owed a large sum under a damages ruling tied to criminal conduct.

Wernersson said the deadline for bringing the damages case had passed, and that the only way he could be held liable was if he were found guilty of criminal conduct. He said he had consulted many lawyers and had not found one who saw justice in the outcome.

His brother Steingrímur Wernersson, a former major owner of Milestone, and the company’s former chief executive, Guðmundur Ólason, also received prison sentences in the case. They did not reach settlements with the state or have their cases reopened. As a result, the conditions have not been met to correct Karl Wernersson’s liability for damages, the article said.

Wernersson has not received compensation for the time he spent in prison, although the state has acknowledged its liability. He said his bankruptcy trustee had demanded that any compensation for his personal suffering be paid into the bankruptcy estate, leaving the state unable to decide where to make the payment.