mary hinge
what you forget is:
1. The loan was from Landisbanki garenteed by emskip (then avion), both companies owned by Magnus T, XL was also owened by Avion, think about it, its avion saying I will sell you back the company for more than it worth so our books look good and my sister company will lend you the money..
2, Barclays were not owed money - they provided the hedge possitions on both fuel and FX, when the market moved against the hedge ie oil fell they demanded XL cover their exposure.
3, Emskip is the new name for avion - they are not sister companies