Bjorgolfur Gudmundsson, the former owner and chairman of English Premier League side West Ham United, has been declared bankrupt, an Icelandic court ruled on Friday.
Judges in Reykjavik agreed with Gudmundsson’s argument that he had no reasonable expectation of any future income and did not have sufficient assets to service his debts.
“Reykjavik District court has today accepted Bjorgolfur Gudmundsson?s request that his estate will be entered into insolvency proceedings,” his spokesman and former West Ham vice-chairman Asgeir Fridgeirsson said in a statement.
The 68-year-old, estimated last year to be worth 1.1 billion dollars by the 2008 Forbes Rich List, snapped up London side West Ham in 2006 for around 85 million pounds (99 million euros, 141 million dollars).
But court documents showed that the debt of his estate totalled just over 96 billion Icelandic kronur (529 million euros, 748 million dollars).
Gudmundsson lost much of his fortune during the recent global economic turmoil owing to his investments in two of Iceland’s major banks: Landsbanki and Straumur Burdaras Investment Bank.
Both were nationalised by the Icelandic government after they borrowed beyond their means, effectively wiping out the stakes of shareholders.
“I now face almost complete lack of income as I am no longer in the employment of the aforementioned companies and earn now just the minimum wage,” Gudmundsson wrote in a letter to judges.
Once the second-richest man in Iceland, his plight forced him to put West Ham up for sale and the club was acquired by asset management group CB Holding for a reported 100 million pounds in June.
Once that sale was completed, Gudmundsson and vice-chairman Asgeir Fridgeirsson both left the club.