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Iceland's Glitnir seeks protection from US creditors

Icelandic bank Glitnir banki hf sought bankruptcy protection from creditors in the United States.

The Reykjavik-based bank filed a Chapter 15 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York. The bank was taken over by Iceland's Financial Supervisory Authority last month as the global financial crisis took its toll on the country.

The International Monetary Fund approved a $2.1 billion loan for Iceland on November 19.

According to court documents, Glitnir's court-appointed overseer wants to have the company's court proceedings in Iceland recognized in the United States.

The company said in the filing that it had more than $1 billion in assets, and liabilities of more than $1 billion.

Iceland's three biggest banks, Kaupthing, Landsbanki and Glitnir, collapsed in October under the weight of billions of dollars of debt accumulated in an aggressive overseas expansion. The government moved to takeover the banks, but the financial collapse shattered the country's currency and forced Iceland to seek aid from the IMF. (Reuters)